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eBay Slammed for Banning Whistleblower – the Rest of the Story

Craig Crosby, publisher of the Counterfeit Report, issued a press release on Tuesday accusing eBay of retaliating against him when he tried to report counterfeit items for sale on the eBay marketplace as part of a 9-month investigation. He also accused eBay of removing comments that warned consumers of counterfeits on its site.

Business Insider described a compelling story of a “consumer watchdog organization” trying to warn consumers about fakes.

The Counterfeit Report fact is actually backed by manufacturers, Crosby acknowledged when EcommerceBytes inquired. “They are recognizing the importance of consumer education in the fight against counterfeits. The products are just too deceptive for the consumer to identify, and e-commerce transaction fees are very, very profitable on the fakes,” he said.

Sellers may understand this for the complicated issue it is. Looking at it from their and from eBay’s point of view, buyers who continue to purchase items and then express dissatisfaction looks an awful lot like “bad buyers” – which is also a reality on eBay.

Indeed, eBay spokesperson Ryan Moore provided EcommerceBytes with a statement that said based on Crosby’s pattern of buying and high percentage of returns, its system flagged his actions as being likely “buyer abuse.”

“After a closer look, we now understand that this was actually Mr. Crosby’s way of attempting to identify and remove counterfeit goods on the site,” eBay said. The company has also reached out to Crosby “to discuss how we can work together in a more formal manner to keep eBay a place where people can shop with trust and confidence.”

It’s not the first time manufacturers have created a “consumer advocacy” site to fight counterfeits for sale on online marketplaces. Last year, manufacturers created a website called the Consumer Fraud Center to get media attention about fake hair products allegedly sold on Amazon. As we reported in this story, the Consumer Fraud Center was backed by manufacturers, and its Executive Director James Lee was a PR pro who founded and headed the Lee Strategy Group.

Crosby told EcommerceBytes the term “Consumer Watchdog” was probably an accurate term for The Counterfeit Report. “Our primary goal is protecting and educating consumers, and we encourage brand owners to participate in that effort. The program is very effective. Our Counterfeit Product Alerts have been viewed 1.5 million times. Consumers are interested.”

eBay did not respond to our specific questions, but its statement said in part, “Counterfeits are illegal and not welcome on any of eBay’s sites and we applaud the efforts of people like Mr. Crosby to help keep our marketplace free of them. As a business with millions of buyers and sellers interacting every day, we rely on the good people in our community to help us spot and stop bad behavior.”

It also provided additional resources, including a link to a eBay Against Counterfeits page and the following information about its VeRO program, which allows brand owners to quickly and easily report counterfeits or copyright infringements. “eBay promptly investigates each notification and we take appropriate action on 100% of reported listings. More than 40,000 rights owners, ranging from Global 500 companies to industry trade associations to small businesses, participate in the VeRO program.”

There have been seller complaints about eBay’s VeRO program, however, with reports of brands filing reports against sellers who aren’t selling fakes. And as this current incident shows, brands are clearly frustrated with their inability to stop sellers from selling fakes on eBay.

We asked Crosby what advice he had for online merchants when sourcing branded products. “With the global proliferation of counterfeits that are very deceptive, vendors should understand that they are criminally and civilly responsible for the products they sell. They should always check with the manufacturer, especially for deals that “are too good to be true.””

And what about consumers who are reselling their own products or yard-sale finds? “Single item or used product sales are not a big focus,” he said, “but many consumers choose to sell the counterfeits that deceived them and they purchased. They try to get their money back. This is in fact, fraud, and they may find themselves refunding the money, losing the product and possibly sued for related damages or injury.”

We’ve got more information on the EcommerceBytes Blog – take a look, and let us know what you think of the battle against fakes on eBay!

Comment on the EcommerceBytes Blog.

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Ina Steiner
Ina Steiner
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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.