Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat June 5 2021 09:50:51

eBay Hit with RICO Lawsuit

By: Ina Steiner

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A Massachusetts man filed a lawsuit against eBay alleging fraudulent acts against him in violation of the RICO Act, which stands for Racketeer Influenced and Corrupt Organizations. The complaint revolves around what appears to be a growing problem for online shoppers: fake tracking numbers used to provide proof of delivery.

The plaintiff alleged eBay is fraudulently presenting a money back guarantee in cases where the buyer does not receive the item purchased, as he explained in this excerpt of the complaint:

"However, ebay does not give a person their money back if the Seller/shipper provides any tracking number for a package that shows delivery in your zip code. eBay ignores the issue that the package was not addressed to the Buyer/receiver. The refusal of ebay to consider the actually addressee or even the size of the package has created a situation that not only allows sellers to steal from buyers but prevents the buyer from being able to get a refund from the shipping company."

In mid-May, we wrote about the problem on the EcommerceBytes Blog after being contacted by several readers, although as we noted, the scam itself has been employed by fraudsters for years.

In his complaint filed against eBay in Federal court on Thursday, the plaintiff also express frustration with the FBI and US Attorney, characterizing them as "strictly political organizations that care nothing about their obligations to protect the average person."

The plaintiff, Danny M. Kelly, is representing himself.

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Readers Comments

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by: RL15 This user has validated their user name.

Sat Jun 5 11:35:17 2021

Good luck. Hope he wins!!

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by: ShortSeller This user has validated their user name.

Sat Jun 5 15:11:40 2021

This lawsuit will be last about as long as the average ebay seller promotion.

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by: pace306 This user has validated their user name.

Sat Jun 5 22:09:40 2021

It’s good to see eBay get sued - made my day !

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by: Snapped This user has validated their user name.

Sun Jun 6 07:03:33 2021

There are an array of reasons to consider almost everything eBay to be in violation of RICO, but this particular case may not stand the test of corruption as much as it does an indifferent ineptness. Also, the buyer’s remedy rests with the entity to which they made payment. Which is not the shipping company. They shipped per their client’s order.

OP doesn’t say if they were contacted, but if postal shipping is involved, the Postal Inspectors would be interested in investigating any fraud aspects. And the ICC for private carriers.

To really combat this fraud however, especially if MP is involved, requires eBay (or any similar ‘oversight’ venue) to simply coordinate with shippers to confirm label addresses for tracking numbers. This data s retrievable and technically available to share electronically. Anomalies can then be resolved via the seller. They’re relatively experienced in that.

However, there may be some aspect of ‘privacy concerns’ related to access of that data that may require legislative mandate, and possibly under a complicating constraint of situational needs elements considered case by case. If so, the OP’s point regarding lack of good faith and petulant stonewalling by federal authority is well taken. And with eBay too, who would need to spend way more money on it than simply settling with this plaintiff, or outspending him.

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This user has validated their user name. by: Rexford

Sun Jun 6 08:42:13 2021

Abraham Lincoln: A man who represents himself, has a fool for a client.

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by: Eagle This user has validated their user name.

Mon Jun 7 00:56:59 2021

Guess the fake tracking number is a fairly common thing happening throughout the online ecommerce? I made two purchases around end of Oct, first of Nov for Xmas presents. I thought I was buying from a company in USA and paid through PayPal. My PayPal receipt showed a different company name than the company I thought I ordered from and once I received shipment conf. with tracking number it again from a different company than the other two. On top of that the tracking link took me to China (one of the orders was even in Chinese text). Not happy by this time I did follow the tracking number and could even pull the package on USPS once they hit the USA. Anyway, the packages ended up showing as delivered. One wasn't even delivered to the correct zip code! I filed complaints with PayPal and they wouldn't give my money back even though it showed delivered to wrong zip code. Our post office basically has a line out the door and down the street during Xmas rush and considering my business was full time crazy with sales/shipping at that time also. So by the time I was able to kill 30-45 minutes standing in line and get a detailed printout at USPS my time limit had expired to respond back to PayPal. Needless to say, they (including PayPal( had scammed me for $150. I now search the sites for a USA address. If I cannot find the businesses address or it ends up showing International addy or especially China addy I leave the site ASAP!

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This user has validated their user name. by: Marie

Mon Jun 7 02:14:54 2021

I hope this lawsuit has some teeth.  This scam is happening more and more.  It happened to me once on Ebay.  I was able to get my money back, but there are many that do not.  Which is why it is typically financially fruitful for sellers willing to do business this way.

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by: Paul W This user has validated their user name.

Mon Jun 7 03:59:41 2021

This scam would be much more difficult to pull off if tracking were by 9-digit zip code.

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by: Gumball This user has validated their user name.

Mon Jun 7 04:05:20 2021

If a seller uses a fraudulent tracking number for any reason, they should be held responsible for the item they sold. Legitimate shipping labels should have a record of shipment and tracking. I would think sellers are smart enough to keep records of what they ship. I imagine the court will sort it out. I buy on Ebay because of their buyer protection guarantee. I can understand why the OP got angry, and feels betrayed if Ebay reneged on their protection guarantee. Of course, the seller may have records, but if they do you would think that would have come to light by now.  

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by: Chicago48 This user has validated their user name.

Mon Jun 7 05:38:13 2021

Seems that the claimant can also file a police report.  Did he file a civil lawsuit against the buyer?  

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This user has validated their user name. by: The End

Mon Jun 7 06:39:11 2021

" the plaintiff also express frustration with the FBI and US Attorney, characterizing them as "strictly political organizations that care nothing about their obligations to protect the average person."
Ebay, Etsy and all the GIANT venues know this.
They've been thumbing their noses at us.
Our justice system is a rotten stinkin' mess.
Must be euthanized and rebuilt from the ground up.
START BLOWING THE WHISTLES ! ! ! !

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by: 1st Armored Div. 1971-1973 This user has validated their user name.

Mon Jun 7 07:28:25 2021

I have had this happen during the Christmas rush where the package was delivered to the correct zip code but the customer never got the package. Was it miss delivered to wrong address, yep this does happen, or was it stolen out of the mail box.

Ebay refunded the customer out of their own pocket. It wasn't a ton of money but it was nice of them to do it. They just wanted me to notify the customer so I would get a nice review...

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by: cvsharkey This user has validated their user name.

Mon Jun 7 08:19:46 2021

Sounds like a class action lawsuit would be more appropriate. Perhaps it will becoe one. There is strength in numbers.

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by: careerseller This user has validated their user name.

Mon Jun 7 09:32:39 2021

Go after them, eBay deserves it for NOT addressing this scam. The issue of scam sellers uploading tracking numbers that aren't going to the recipient to circumvent item not received cases is running rampant on eBay.  Ebay doesn't seem to care if they don’t have to eat anything. These scam sellers somehow get a real tracking number of something shipped to someone else in your zip code and upload it to ebay as their own to defeat item not received cases. They never ship anything just pocket the money using a stolen tracking number. I have had this happen twice.  I had to fight eBay tooth and nail over one of these scammers. They refused to cover it insisting the tracking was proof. I only got a refund after dozens of calls because I made the Ebay rep call UPS and ask if my name and address was on the label.  UPS confirmed my name and address was NOT on the label. My advice if this happens to you. Call the carrier. They can not disclose the name and address on the label due to privacy and security issues but if you give them your name and address they can confirm or deny if that is what appears on the shipping label. Then tell eBay what you did and MAKE ebay call and do the same. Ebay can’t refuse to cover it if the carrier confirms your name and address does not appear on the label.  

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by: Bparty This user has validated their user name.

Mon Jun 7 10:48:55 2021

Be careful what you wish for. I am sure ebay can easily figure out how to screw the seller the same as walmart and amazon do currently.  Meaning all they have to do is say they didn't get it and you lose all your money.

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by: Daniel D.Teoli Jr. This user has validated their user name.

Mon Jun 7 11:25:03 2021

I've been scammed many, many times on eBay. One time was for a Zeiss lens costing near $3K. Another time was for a used Leica body costing $5K. Both were scams. eBay has always fixed the problem.

I had an issue with a VCR. A mix-up with delivery. Seller complained and I was out the shipping. But generally speaking, am happy with their protection program.

The $5K Leica seller camera scammed a PayPal go between. She lost lots of $$. The seller would hire a person to use their PayPal account and tell them to keep half of the money for a fee and give them the other half. The seller shipped the box with some weight in it to a vacant lot. By the time it was returned to them from the Post Office as undeliverable and the claim was put in the PayPal gal had already paid off the seller. People are scum nowadays.

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by: pace306 This user has validated their user name.

Mon Jun 7 12:17:34 2021

I dont feel bad for eBay here (well ok I never do) since this is of eBays OWN DOING.

In the mad rush to become a bank/money lender/transmitter to please Wall Street - they never took these kinds of things into account - so "now what" ??

eBay needs to take responsibility - its not like they cant/dont have access to USPS computers.

They can find out in 2 seconds where the item went.

Dont be fooled - its all about who *MAY* end up eating a chargeback/bank reversal.

eBay just shows the bank the retail side (the side we see at usps.com) and says HA! DELIVERED - so as not to eat the loss. BUt as we know - thats NOT the end of it.

This isnt the ONLY eBay scam - but its currently the biggest.

If "you want to play in the big leagues" and be a payment processor then you are going to have to have the staff to do the due diligence to deal with these issues.

Where are those 2 ex Walmart goofs ???? they do nothing all day - let them get involved.

Buyers deserve to be treated with honesty and dignity when its all legit - AS DO SELLERS - but if either party is a scammer - you deserve to be prosecuted to the fullest extent. That goes for eBay too.

eBay created this mess - the lawsuit hopefully wakes them up!

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by: shut1968 This user has validated their user name.

Mon Jun 7 13:24:14 2021

There needs to be equal protection for both buyers and sellers, we get ripped off at least a dozen times a week if not more by customers claiming they didn't get it when it shows as delivered and USPS does not offer any service that shows the actual address it was shipped to on their website or that you can call in and confirm.

THAT is what needs to change, if USPS showed the address it was shipped to these problems would end for all and USPS would have to take responsibility for packages delivered to the wrong address.

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by: rhw1 This user has validated their user name.

Mon Jun 7 13:44:20 2021

FWIW....I have 3 ebay accounts, 2 for selling, and one I use EXCLUSIVELY for buying. I would NEVER ever use my paypal funds (old days) or my managed payment funds for a purchase. Nor would I EVER use a debit card. Why? One has FAR more protection with their credit card than with pending funds, paypal, or a debit card. So what I do is Pay for my item via paypal, funded by my credit card. This way if ebay throws me under the bus, I can go to Paypal. If they choose to do nothing then I call my credit card company. They look at your history, (20+ years) payment history, (never late) and how many times have you asked for their assistance (twice). Boom! Done. If the OP had done this, I would be willing to bet that the issue would never have gotten this far. My .02c!

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by: AddyUp This user has validated their user name.

Mon Jun 7 16:53:06 2021

I remember a few heated forum threads on this side of the pond about tracked junk sent to a nearby addresses, A buyer knew they were being scammed and the general consensus agreed with that.

The final advice was basically if you can't beat them...........

As there was no point in opening a INR case they were advised to open an INAD case. If that doesn't force the scammer to refund then they will have to issue a return label. The skies the limit on what they ought to return.

Maybe not strictly good legal advice but probably the only advice with a chance of working.

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