Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat Aug 22 2015 05:42:31

What RICO Lawsuit Could Mean for eBay Sellers

By: Ina Steiner

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Wimo Labs is suing eBay over the way it handles reports of counterfeits. Many sellers are familiar with the VeRO process in which brands report listings to eBay for real or supposed trademark or copyright infringement. But if eBay makes certain changes in response to criticism over its VeRO program, might it have a negative impact on legitimate sellers?

Wimo Labs, which sells the Lunatik product line, sued eBay and some of its sellers, accusing them of racketeering. (eBay said counterfeits were not welcome on its site and said it has a number of sophisticated tools, policies and other measures in place to keep them off.) More information with eBay's full statement is available in Friday's Newsflash.

One point of interest is its description of how eBay handles claims - basically it says eBay should not instruct buyers to return disputed items to sellers:

"Though eBay's policy is not to return counterfeit products, upon information and belief, this is exactly what eBay requires for a consumer to receive a refund. Fake Products are evidence of a crime. See 18 U.S.C.A. 2320. Contrary to law, upon reporting a purchased item as counterfeit, the eBay customer is refunded and instructed to return the product. Instead of taking any action against the Unauthorized Seller, eBay facilitates the Seller's receipt back of the Fake Products, which are likely then resold to another unsuspecting eBay customer."

But eBay is in a difficult position - how does it ensure buyers who say they received a counterfeit don't destroy an authentic item in error? And how does eBay protect sellers from buyers who intentionally say they received a counterfeit item when they've actually received an authentic item? 

Back in 2009, eBay struggled with this issue. It instituted a policy instructing buyers to destroy counterfeits rather than returning them to the seller - but that left sellers completely unprotected from bad buyers.

Here's an excerpt from the original 2009 provision: "When buyers file a claim alleging that the item is not authentic, we require the buyer to destroy the item. Once a buyer confirms destruction of the item, we will reimburse the buyer or provide an eBay coupon."

And one year prior, PayPal had also been called out by sellers for its policy in which it requested buyers return counterfeit items to its partner for destruction - from our July 2008 news article:

"Why does PayPal ask buyers to send counterfeit merchandise purchased on eBay to a warehouse in Texas belonging to a liquidator? That's the question some eBay members are asking, and some are questioning whether PayPal is directing the liquidator to resell counterfeit items rather than destroying them."

eBay quickly backed away from its 2009 policy change in recognition that it had to protect sellers from buyers who reported authentic items as counterfeit whether by mistake or intentionally. 

The real issue with the current lawsuit over the Lunatik counterfeits seems to be the fact that eBay won't work with the maker - it's taking a hands-off approach. Lunatik's maker says that's in contrast to Amazon, which is working with it to try and prevent counterfeits from displaying in search results.

Let us know what your experience has been as a seller, buyer, and brand (if applicable), and if you have any advice for eBay on how to handle the problem of counterfeits and counterfeit claims.

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by: comet This user has validated their user name.

Mon Aug 24 01:38:42 2015

Thank you Jack Sparrow and others who have mentioned the WENIG story on how HE was having those Pan Am flight bags MADE in CHINA and then was going to SELL them on ebay--wonder if they were ever manufactured and if so--who is actually selling them and--most important--HOW they are labeled.  IF ebay is selling them AS new-vintage "tributes"--and there is no more Pan AM to protest--it is kinda a moot point.  BUT if they are trying to sell them AS actual real VINTAGE--that is another thing entirely.  

Considering what WE are asked to fill in when we list anything that IS actual real vintage---they should be smacked upside the head.  They act like me listing some no-brand vintage coat or purse from 1950 is a MAJOR CRIME--and I have had items taken DOWN for--supossed brand infringement--when it is an UNBRANDED ITEM!  

Ebay should have been looked into "Back when"  and it is even more important that they be looked into NOW--yet--so one seems interested.  

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by: comet This user has validated their user name.

Mon Aug 24 01:53:57 2015

Around 3500 total Pan Am items listed from old tickets to plane models etc---365 of these bags looks like the ACTUAL   http://contact.ebay.com/ws/eBayISAPI.dll?FindAnswers&redirect=0&iid=17
1837320348&requested=caribbeancpt
vintage ones are listed for around $9.99--Wening is not gonna get rich quick on THIS one--and this one for $159.

I am not sure you could claim that THIS seller is a "mega seller"  with 8800 FB;  they have a LOT listed mostly what looks like over stock and odd "brand"  names.  

IS this Wenig?  I don't think so--but it COULD be an outlet for a Wenig import.  

AS for this item itself--why would you WANT a new one that is not even as cool and nostalgic as the ORIGINAL--which you can get for LESS than a burger meal?  

Somethings not kosher here---

(Aside--if Pan AM is belly UP--who is making these under what license?  And--are these 707 bags copies?)

I did ask the seller what the Country of Origin was on these--we shall see what I get back.  

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by: RickyCash This user has validated their user name.

Mon Aug 24 02:45:45 2015

there is more on ebay, go to ebay and search shoes, you will find lot of listing has brand name on the pictures but doesn't no list that brand name in the title. is that news that ebay allow sell to do that with Chinese seller? those seller from HK and China can list whatever fake stuff that want at Ebay, that is so funny that ebay limit usa sell do lot of things, but they allow seller from HK and China to sell everthing

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by: RickyCash This user has validated their user name.

Mon Aug 24 02:47:27 2015

Ebay allow those seller from HK and China sell anything they want, lot of those seller from HK and China put brand name product in their picture, but they won't list that brand name in the title, you will found lot of those listing at Ebay, that is no the news, Ebay Sux

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by: Tiffee Jasso This user has validated their user name.

Mon Aug 24 03:10:06 2015

You can no longer report Chinese sellers.Ebay tells you the item number is not in their system.

As for counterfeit items sold by US buyers, probably half is seller fault and half is buyer theft or borrowing the item to impress someone and it is no longer needed. I recall someone supposedly smashing a gold Rolex watch with a hammer and Ebay gave them their money back. Seller had paperwork showing watch was genuine and was gold. He received an apology from Ebay, but was still out watch. Who knows what watch the buyer smashed as that part was not clear or what happened to the gold which as we all know still has value.
I also recall someone complaining the $5 Disney pin they bought was counterfeit as it didn't have the word Productions on it. Disney dropped the word Productions from their items circa 1985, but still seller was skunked by buyer's complaint and ignorance.
Above are some of the problems Ebay has trying to deal with counterfeit items. Buyers line up to take advantage of getting stuff free where and how they can. Some seller list fake clothing, handbags (big-time counterfeiting here), fake diamonds, gold and silver jewelry all day long. How do you police such a diverse amount of items, let alone keep and eye on the buyers who game the system?
My opinion is both sellers and buyers who game the system show a habit of problems in this area. Ebay knows exactly who they are and should ban them off the site.
Any seller with hundreds and even thousands of negatives is a problem. Yet, this type of seller is rampant on Ebay and from what I can see at the top of the search and untouchable. This is one of the reasons so many buyers have left Ebay. People do not like getting ripped off.  

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by: Massachusets Howler This user has validated their user name.

Mon Aug 24 06:48:19 2015

Gee.
Ebay after the spilt was left with 1 billion cash and 5 billion debt.

If you thinkabout it JD is now a billionaire personally- he HIMSELF has more cash than ebay!!

So. Ebay has a net of negative 4 billion and JD has over 1 billion CASH so JD leaves ebay 5X richer than ebay itself.

This is considered a "success".

What a FLEECING, I just thought about this and it made me physically sick.

The THIEF has escaped out the back door. NOW Rico comes in??

You'al missed the robbery.
MH

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by: Massachusets Howler This user has validated their user name.

Mon Aug 24 06:53:10 2015

Ebay has been successfully DIVESTED by BAIN and it is way too late for ebay sellers to ever be compensated ANYTHING- we are screwed. JD left when there wasn't anything else to take- he really wasn't forced out of anywhere.
Mass Howler

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by: Volvo351 This user has validated their user name.

Mon Aug 24 08:38:06 2015

The VERO program clearly violates any sense of Due Process. The seller is Guilty. Not even Guilty Until Proven Innocent, but just plain Guilty. Seller loses money, and item. Scammers can have a field day by fraudulently claiming a counterfeit. Add to that the fact that many consumers will GLADLY buy fakes if the price is right. And, the VERO program definitely makes the price "right" - at ZERO.  

Now, if a brand owner wants to protect its brand it's up to them to purchase directly from the seller and examine the merchandise themselves. Relying on bogus Third Party reports when those 3rd parties have an incentive to claim a counterfeit is a bad policy.

Bottom line is that selling any kind of designer or branded product on this crappy "ecommerce platform" is risky. More so with the "180 day return policy" enforced by that bank-that's-not-a-bank, PayPig.

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This user has validated their user name. by: Shop and Ship

Mon Aug 24 09:50:13 2015

Lots of good valid points already made in prior comments in this thread, but my own personal experience is that eBay does not mesaure up to making a reasonable response when the copyright/ trademark holder gives notice that its property rights are being violated. Screwing around for a week before replying while the bogus seller ships off 2 dozen more counterfeit items is not compliance with the Act. eBay doesn't even enforce its own policies on copying listings, photos, and text. Substandard performance is not a "safe harbor"

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by: pace306 This user has validated their user name.

Mon Aug 24 10:07:45 2015

@shop :)

You are %100 correct.

As a seller of Casio G-Shock watches on eBay, I am forced to compete with people who simply rip off Casio's picture (all the digital watches say 10:58 - thats Casio's pic) when they post.

When I call eBay they tell me STFU - we cant and wont do anything about it PERIOD.

eBay knows quite well whats going on, but turns a blind eye towards it - the FVFs are just too much for eBay to ignore.

With eBay divesting itself of Paypal, GIS and other parts of its former self - wheres eBay to turn to for revenue? It can ONLY be marketplace sales...... but when it continually slides %2-3 month after month, you get GREEDY and turn a blind eye towards fraud.

Thats also the reason eBay lets sellers get screwed on returns. They force the return then claim they know nothing about the item so therefore its ok what a buyer does to the seller!

Lastly, of course VERO is ALWAYS for sale. VERO only gets going when either theres a lawsuit or money (monster - lawsuit, skullcandy - money).

verowatch.com will GLADLY take your money all while telling you they have nothing to do with eBay or VERO (yet they use their name and IP). Pay them enough and BAM! your listings are taken care of.

Funny though, if you go to verowatch.com - they are now NRG International. The funniest part of this all is THEIR complaints about eBay! (all while making money off them!)

"John Donahoe, CEO of eBay continues to allow illegal prescription drugs on the EU and USA eBay platforms. We're working with the Police & Trading Standards!"

EBAY DESERVES EVERY BIT OF TROUBLE THEY GET. WITH 32,000 EMPLOYEES THEY COULD DO A BETTER JOB AT THIS BUT THEY DONT!

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This user has validated their user name. by: Bidonmine

Mon Aug 24 11:21:46 2015

What makes Ebay stand out in all this is what Amazon did under the same situation.
This is why I am able to sell 10 to 1 on Amazon vs Ebay... Amazon is seen as a proactive, trustworthy site as opposed to the den of thieves that Ebay allows.

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by: OmiGosh This user has validated their user name.

Mon Aug 24 11:27:49 2015

Problem is - it's not just people removing what they think are knock offs, they let their robots remove listings too.  I was selling once a necklace that used the ''Gucci link.''  That's a very common link. That is the name of the link.  That is the name jewelers use all the time.  Ebay said I couldn't say Gucci Link even though that is what it is called. But I could use a hyphen and call it a Gucci-Link chain. ...Another time eBay took down a listing of mine for a comb in a silver case. I made the mistake of saying it was a tortoise shell comb, rather than tortoise shell color.  They wrote.  Can't sell the shell of endangered species. I told them ''People sell tortoise shell sunglasses all the time.''  They didn't want to discuss it, just had to change it and add color ..

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by: pace306 This user has validated their user name.

Mon Aug 24 13:00:45 2015

At the end of all this, eBay will come to some out of court agreement and settle for a few million - probably less then the amount they gave JD to go.

They may also be "forced" to make some small change to their policies on specific brands/items or maybe even gate a few like Amazon does.

eBay cant afford a long trial (publicity wise) - money they have though, so its easier to switch then fight.

eBay will make all kinds of excuses about how they dont know anything (except how to steal), and then trot out a fall seller update that steals more from sellers to make up for the loss in court.

Im glad eBay is getting its comeuppance but in the long run, I doubt there will be many changes for sellers. VERO always runs amok, as they are backed by eBays Mistrust & Unsafe Dept - aka the lawyers.

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This user has validated their user name. by: FEEbay

Mon Aug 24 15:14:53 2015

@Volvo351
You hit the nail on the head!
We are authorized dealers for everything that we well, and STILL have had VERO takedowns in the past.Some companies use VERO just to take down listings that do not conform to MAP ''Minimum Advertised Price...'' and the dopes at Ebay VERO let them do it!
''Bottom line is that selling any kind of designer or branded product on this crappy ''ecommerce platform'' is risky. More so with the ''180 day return policy'' enforced by that bank-that's-not-a-bank, PayPig.''
I agree 100%... You simply cannot win with these clowns any more. Between phony VERO takedowns, and this insane ''defect policy,'' ''180 day Paypal returns,'' and the rest of the nonsense (There is soooo much nonsense now on Ebay that it has become untenable..), we are moving inventory away from Ebay, and QUICKLY.
Rest assured, this is a sentiment that is not limited to the posters on this blog either, as sellers are leaving in droves, and BUYERS are as well!!

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by: Massachusets Howler This user has validated their user name.

Mon Aug 24 17:16:49 2015

Jack Sheng was the 1st seller to pass the million threshold- selling COUNTERFIETS on ebay.

There is a conference room at ebay hq named "The Jack Sheng Conference Room" and all csr's had a sign in their cube for YEARS that read "No Touchy Jack Sheng" meaning support Jack Sheng no matter what.

This is a FACT.
MH
They are actually celebrating HIM at the 20th birthday bash- that is how fakes are "combatted" by ebay.
Devin- PACK UP your Pan Am bag and LEAVE THE BUILDING.

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by: ebay refugee camp This user has validated their user name.

Mon Aug 24 22:39:05 2015

JD in all the way enabling Chinese fakes helping with warehouse in U.S. He knew about all of it

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by: ebay refugee camp This user has validated their user name.

Mon Aug 24 22:39:06 2015

JD in all the way enabling Chinese fakes helping with warehouse in U.S. He knew about all of it

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by: Massachusets Howler This user has validated their user name.

Wed Aug 26 15:21:33 2015

JD and ebay enable and facilitate FRAUD- THIS IS ONGOING.

They worked in COLLUSION to perpetuate FRAUD.

THEY SHIPPED from their OUN warehouses, conterfiet items and this is ILLEGAL.

It is not LEGAL to ship conterfiet items- ALL ITEMS IN EBAYS WAREHOUSES MUST BE DESTROYED- IT IS THE LAW.

They DECIEVED sellers with Best Match to show conterfiet items over real items, and LIED that BM was not doing this= FRAUD.

They are LIABEL.

(Period)

Mass Howler

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by: mcposty This user has validated their user name.

Tue Sep 15 02:04:32 2015

Its simple, letigation should be the method. If you think I sold a fake item, sue me and letvme present my case.

Its idiotic to allow a corporation to decide who is right or wrong when said corporation doesnt even give you a venue to present your case.

I hate the world and every one in it

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