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Borrowed eBay and PayPal Accounts at Center of Lawsuit

When he wasn’t lofting kites into stormy skies, Benjamin Franklin was requoting memorable lines from Hamlet like “neither a borrower nor a lender be.” It’s advice the parties embroiled in a legal kerfuffle over the usage of an eBay and a PayPal account probably wish they had heeded.

Maine Antique Digest published an account of a lawsuit filed by a business and eBay seller against a business partner. The lawsuit brought by Memphis-based Samuel Nathan Galleries against Todd Hutchins looks like it could be acrimonious. Along with their claims of fraud and breach of contract, the plaintiffs have invoked the federal RICO Act, a piece of legislation generally seen wielded against reputed organized crime figures since the 1970’s.

Though the two parties apparently had worked together in the past without issue, their latest endeavor reportedly proved otherwise. Hutchins used with permission the Galleries’ eBay and PayPal accounts to sell merchandise. However it is now alleged the items posted for sale and purchased by buyers never existed.

PayPal, facing demands for reimbursement, pulled money from the Galleries’ account, which the company in turn sought to recover from Hutchins. The lawsuit’s filing seems to indicate potential ideas for resolution have failed.

The sudden demise of a seemingly successful eBay presence, unfortunately, isn’t without precedent. In the annals of EcommerceBytes.com circa 2006 rests the account of Parrothead88, a high-profile PowerSeller on eBay who suddenly began receiving negative feedback ratings; some eBayers speculated he had sold his business to another seller but had not transferred his eBay account, something eBay makes extremely difficult to do – see this tidbit from 2010, Think Ahead before Selling Your eBay Business.

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.