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EcommerceBytes-NewsFlash, Number 472 - January 29, 2003 - ISSN 1539-5065    1 of 3

eBay/PayPal Fraud with a Twist: International Money Laundering

By Ina Steiner
January 29, 2003

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A new scam is targeting PayPal users that may have international money-laundering implications. The scam works like this: A company located in Estonia sends an email asking the recipient if they would become the company's U.S. representative. They have "discovered" eBay, but need the recipient to help them process eBay auction payments through the recipient's PayPal account.

The email explains that since PayPal does not accept users registering from Estonia, and since checks take too long to arrive with a "very high interest rates in local banks," they need to make use of the recipient's PayPal account. They promise to give 10% of sales to the PayPal user simply for forwarding on the money.

"We mean about $2,000 turnover per week, yours will be about $200.00," the email reads. "All you will have to do is forwarding the payments arriving to your account and the merchandise is shipped separately, you will not have to take care of it."

A retired police captain who received one of the emails said, "I can most times smell a scam, and I really feel sorry for the person who might fall for this scam. I can see the report now, "I sent the money overseas and they were supposed to send you the item." The problem here is that the buyer sent YOU the Money for the item and you are in the USA holding the bag."

A warning on the "Security Tips" page on PayPal's Web site reads, "Do not use your PayPal account to collect and transfer money for someone else. This type of activity is often conducted as a form of money laundering. Money laundering is a state and federal crime which often results in significant criminal penalties."

eBay acquired the online payment service PayPal in October 2002. A spokesperson did not get back to AuctionBytes by press time.

Visit the AuctionBytes Fraud Resource Page for more information: http://www.auctionbytes.com/cab/pages/fraud.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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