EcommerceBytes-NewsFlash, Number 500 - March 12, 2003     1 of 1

eBay Fiddles While Users Get Burned by Fraud

By Ina & David Steiner

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A case of suspicious activity on eBay has taken a turn for the worse, with 56 documented reports of alleged fraud against one seller, totaling over $26,000. The most disturbing characteristic of this case is the amount time it took for eBay to suspend the seller. eBay members told AuctionBytes that they had notified eBay about the highly suspicious activity 2 weeks prior to the seller's suspension.

eBay seller "mylittle1s" was suspended on March 5, almost 2 weeks after a member of AuctionWatch posted a warning on its discussion board outlining his suspicions about the seller. He reported that he talked to an eBay employee on February 21 to make them aware of the situation. Another eBay member named Bill wrote to AuctionBytes, "About 2 days after the first post on AuctionWatch, I submitted to [eBay's] Safe Harbor a complete run down of what was wrong with this seller, listing point by point, all the warning signs." Bill said he got back a form letter and never heard anything more about it.

"When I reported [the seller to eBay], he had just listed the expensive stuff," Bill said.

The Coconino County Sheriff's Department in Arizona has been kept busy documenting the cases against the seller. One person stung by the alleged fraud has contacted fellow victims and has compiled a spreadsheet containing details of all the cases. This is a common strategy adopted by victims to help law enforcement officials, a trend reported in AuctionBytes on October 12, 2002 (

At last year's annual eBay stockholder meeting, CEO Meg Whitman announced that new software was being implemented, allowing the online auction site to make "major strides" in reducing fraud. FADE, or the Fraud Automated Detection Engine, is an internally developed application designed to detect early signs of fraud. Rob Chestnut, eBay's Vice President of eBay's Trust & Safety Department, reported last summer, "we're very excited about the results we're getting [with FADE]."

To add insult to financial injury, eBay fraud victims often face damaged reputations after such cases. In this case, negative feedback began rolling in March 3 against the seller. The seller was able to post negative feedback in retaliation against his alleged victims before he was suspended. eBay members have frequently complained about its Feedback system, which allows fraudulent and deadbeat users to leave negative feedback against their victims.

eBay spokesperson Kevin Pursglove confirmed that eBay had been contacted by law enforcement officials about the seller. eBay does not release detailed information about users, citing privacy concerns.

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Ina and David Steiner are publishers of and have been writing about ecommerce since 1999.

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