EcommerceBytes-NewsFlash, Number 960 - February 23, 2005     1 of 3

Wagglepop's Bubble Bursts Leaving Online Auction Sellers in the Lurch

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A "Service Unavailable" message greeted visitors to the Wagglepop auction site on Tuesday evening, and the founder posted a message on an industry discussion board saying he had closed the site. With over 2,300 registered users, almost 300 stores and a reported 10,000 plus listings, sellers who found the announcement were dumbfounded.

Wagglepop seller Karen Kast-McBride (aka Karenkm13) said of the site's owner Ray Romeo, "He did not give any of the sellers time to copy or download their listings, he did not give them time to get information on items they may have sold, or buyers a chance to see if they had won something."

The online auction site had launched just over a week ago - not without controversy. Skeptics had hounded Romeo on the boards for months, questioning his expertise and motivation. When the site launched, security issues were raised (http://www.auctionbytes.com/cab/abn/y05/m02/i15/s01). But it did not dim the enthusiasm of Wagglepop supporters, many of whom said they were leaving eBay after its recent fee increases.

The contrast between Romeo's post on February 22 announcing the site's closure and an email he sent to AuctionBytes a month ago were striking. In January, Romeo said, "I'm almost shocked to say it, but we are starting to look for corporate space and full-time salaried employees, should we have a successful launch....My only intention with the site, now Wagglepop, was to offer a small alternative to sellers fed up with eBay, of which I was one. It seems that sellers are intent on making Wagglepop much more than that!"

Yesterday, Romeo's post, which he titled "Rest in Peace," read in part, "What started out as an interesting challenge has instead become the most painful, personal few months of my life, and my confidence in what I believed about faith and humanity are shaken and shattered... perhaps forever." The post indicated he would shut down the servers, reformat the drives, "destroying any and all personal data."

Romeo replied via email to AuctionBytes inquiries on Wednesday morning. When asked to describe the site interference experienced and why it was necessary to close the site so suddenly, he said the site was the victim of a DDOS attack.

"I closed Wagglepop as quickly as I could once the decision was made, in the way I found proper." Romeo added, "The site closed as soon as I realized my family, and myself, could be at risk. I'd like not to speak of this further.....I'm shaken and I'm done with it."

In the meantime, sellers are left without access to their records and wondering about the security of their credit card and personal information. Without access to the site to review the User Agreement, it's uncertain what recourse they have.

New York Attorney General Press Officer Mari Arce said the office had received no complaints about Wagglepop as of Wednesday. When asked whether it was legal for an ecommerce site to destroy user records, Arce said she could not comment on this or any other specific case. She said in general, destruction of records would be inappropriate if it was done to hide something that was going to be used in a legal prosecution.

Michael Tankersley, a staff attorney at the Federal Trade Commission, said there are requirements in federal law for safeguarding and giving certain notices when financial information is collected. The Code of Federal Regulations Title 16 Part 313 covers giving notices concerning privacy, and Part 314 covers obligations about safeguarding information. (http://www.access.gpo.gov/cgi-bin/cfrassemble.cgi?title=200416)

Tankersley said if users were in the middle of a transaction and wanted to complete it, they would have to look at the terms of the service agreement and determine if there was a breach of the contractual agreement.

Romeo ignored AuctionBytes' requests to forward a copy of the User Agreement.

Regarding user information, in one email, Romeo answered, "The site software, data, and information have been wiped clean from the servers, and the servers themselves will be dismantled in the next few days." When asked what specific measures were taken to delete the information so they would be unrecoverable, he said, "The drives were reformatted, then wiped. Then rewritten, and wiped again..."

Romeo said he refunded the $57.32 Wagglepop had collected from 27 customers, and "no one owes a single penny."

But disappointed sellers report they had invested not only their hopes, but a great deal of time in preparing their listings on Wagglepop. A seller named Patti said, "I waited for a month with great anticipation for the opening of WP. I had created a new template, logo, graphics, etc. just for WP. I invested a great deal of my time on the site." She was said she was greatly disappointed at the whole project.

Arce said users who want to file a complaint against companies that operate in New York state can file a complaint on the New York Attorney General's Website at http://www.oag.state.ny.us or via phone at 800-771-7755.


About the author:

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). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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