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eBay Sued by Its Own Collection Agency

eBay Sued by Its Own Collection Agency

eBay was sued by its own collection agency on Friday. eBay hired IC System, Inc. to go after delinquent accounts, but it claims eBay provided inaccurate customer data that got it into legal trouble.

According to IC System’s legal complaint, it pursued an account based on information provided by eBay who was found not to be an eBay customer at all who then turned around and sued it:

“On December 14, 2012, a putative class action was filed in the United States District Court for Arizona captioned Michael Reid v. I.C. System, Inc., Court File No. 12-cv-02661-ROS (hereinafter “Reid Matter.”).

“The named plaintiff, Michael Reid, was called by ICS in its efforts to collect on a past due eBay seller account using a cell phone number supplied as Customer Information provided to ICS by eBay.

“Unfortunately, Mr. Reid did not have any account with eBay and had not provided his cell phone number to ICS, eBay, or otherwise consented to be called on his cell phone.”

The collection agency’s complaint for breach of contract further alleged:

“The lack of accuracy in the Customer Information provided by eBay to ICS was a breach of a material term of the Collection Contract and triggered a duty on behalf of Defendant to defend and indemnify Plaintiff.

“ICS made renewed requests for defense and indemnification during the course of the Reid Matter litigation, but eBay refused to defend or indemnify ICS in the Reid Matter.”

The case is “IC System, Inc. v. eBay, Inc.” filed in the Northern California District Court on April 17, 2020, Case # 5:20-cv-02667.

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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/.

13 thoughts on “eBay Sued by Its Own Collection Agency”

  1. Oops! They accidentally gave them the list of bogus debt they bought to make extra funds by hounding innocent people for money they don’t owe. LOL

    I just read an article about that racket two days ago and I wouldn’t be at all surprised if that wasn’t one of eBay’s secret side projects.

    1. I should clarify that the article was NOT about eBay…just the bogus debt collection racket.

  2. Nothing like a funny story before bed.

    I didn’t know that you can sue for using a cell phone number without permission to call it. Year’s ago my son got a call on his cellphone from a collection agency looking for his ex step-dad to collect on funds that he hadn’t paid. Wish we could have sued the collection agency so they could go after the real ‘criminal’. Still remember getting three phone calls in row at dinner from the same collection agency about a car loan that I had never seen the car! I suspect my ex had used some of my ID to get it.

    But eBay being sued, couldn’t happen to a nicer company. Maybe if eBay billed reasonably and didn’t pad the bill at every opportunity, those bills might have been paid without sending to a collection agency.

    1. I believe it is federal law, but is at least in effect in many states, that they cannot call you on a phone number you have not provided them. My mother was always getting calls at work and on her cell phone and she kept telling them not to call her on those numbers.

      Well, as it turns out, I checked her account info online and those were the numbers she gave them. So, I went through all of her accounts and changed the contact number to just the landline and the problem was solved.

      I keep telling her NOT to give out her work and cell phone numbers, but she still does it because she can’t remember the landline number. She doesn’t want to bother with looking it up on her cell phone, I guess. LOL

      1. I should add that it pays to have a landline. We rarely answer it, but that’s the number they’re given to call and leave a message. I also use it as a fax number because my machine can automatically detect incoming faxes.

  3. This was in 2012???? “On December 14, 2012, a putative class action was filed in the United States District Court for Arizona captioned Michael Reid v. I.C. System, Inc.,” Why should this matter if it’s a 10 year old case?

    1. The lawsuit against *eBay* was filed last week.

      The collection agency was sued in 2012. It sued eBay last week, claiming its contract required eBay to indemnify it from such suits as the one filed in 2012.

      1. You also have to consider that while a case was filed in 2012, it could be in litigation for years.

  4. Is it possible that Mr. Reid’s personal information could have been compromised and used to set up a fraudulent account on eBay, leading them to later provide that information to the collection agency when fees were not paid?

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