Internet Fraud Up Sharply, eBay Attracts Vigilantes

[Colin]

http://www.nytimes.com/2004/03/20/technology/20EBAY.html

By KATIE HAFNER

Published: March 20, 2004

AN FRANCISCO, March 19 Five months ago, Klaus Priebe, a soft-spoken building contractor who said he was sick and tired of fraud on eBay, decided it was time to catch the cheaters at their game.

In one recent auction, he bid as much as $2.5 million on a telescope worth no more than $2,000. He knew he would not have to pay for the telescope because he was sure that it did not exist.

The listing was a fake, he decided, because the seller offered free shipping and was registered in Andorra, a small country in the Pyrenees that is often listed by swindlers. Mr. Priebe said his wild bid was an attempt to protect innocent bidders from falling into the trap he had spotted.

Mr. Priebe, 42, is an eBay vigilante, one of a number of eBay members who are stepping in to fight online auction fraud a problem they say is getting worse by the week because they believe that the company does not do enough policing of its own.

But in eBay's view Mr. Priebe and his vigilante brethren are pariahs. Rather than embrace these virtual posses, eBay discourages them, occasionally going so far as to suspend the vigilantes' accounts.

"We love it that people want to help, but there's a right way to do it and a way that isn't constructive or in the interest of a good community marketplace," said Rob Chesnut, eBay's vice president for rules, trust and safety, who added that eBay was doing everything it could to make it safe to buy and sell on its Web site.

EBay, based in San Jose, Calif., has 800 people deployed around the world to fight fraud, he said, and does not need amateur help. "Just like in the offline world," he said, "you can't have people running around taking the law into their hands."

Critics, however, say the company is not only slow to stop fraud, but is loath to reveal how much of it goes on.

"EBay's denial of the extent of the problem is out of control," said Mark Seiden, a computer security consultant in Manhattan who stumbled upon a fake deal for a high-end espresso maker on eBay several months ago and has since uncovered hundreds of fraudulent listings. "They probably think their brand will be stronger if they hide the fraud."

Mr. Priebe, who lives in Pueblo, Colo., is not waiting for someone else to solve the problem. Like other eBay vigilantes, he routinely alerts eBay to listings he believes are fraudulent and sends e-mail messages to people who have bid on a fake item to alert them to the fraud.

"That's a part of safe trading," Mr. Priebe said. "I believe that wholeheartedly. Watch my back and I'll watch yours."

Deception is no stranger to eBay, which has 93 million registered users. Within its warm and fuzzy culture, based on trust and honesty, there have always lurked renegades.

There was the spectacular case in 2000 when a fake Richard Diebenkorn painting was nearly sold for $135,000 on eBay. Travel voucher fraud on eBay became such a problem that the company now requires frequent sellers to register with an independent verification company. The sale of fake rare stamps has spawned watchdog groups both on and off the auction site.

Yet far more rampant than art forgeries and fake collectibles these days are fraudulent listings for expensive consumer goods. Plasma televisions and laptop computers, mountain bikes, fancy espresso machines, treadmills, telescopes, even vehicles are prime candidates to be phantom objects on eBay, sometimes promoted with photos and descriptions lifted straight off the manufacturer's Web site. Often, the seller uses auction software to post dozens of items at once, flooding a category with fake listings.

Last year, some $200 million lost to online fraud was reported to the Federal Trade Commission. And nearly half the 166,000 complaints the agency received last year were about online auctions, a 130 percent increase from 2001. While the F.T.C. does not break out figures by companies, the vast majority of online auctions are conducted on eBay.

"It's gone nuts just since November of last year," said Greg Schiller, a computer and network technician in Aztec, N.M., who says he reports hundreds of fraudulent listings every day to eBay.

[kenratboy]

This is why I am scared to buy stuff on eBay - people that do a business thru them (like 100's of products, like 10, $1000 Sigma lenses with a Buy-it-Now) or the sort of items that are not usually scam stuff (rare CD's and the like), but other than that, I am scared of eBay - I don't feel they stand behind their clients. I hope people really start to get burned (no offence to those people) so eBay will do something!!!

[nathangen]

What can 800 people do with 93, million?

[whadyasay]

This has been going on for some time now with fakers trying to sell collectable vintage guitars. They steal the photos from reputable vintage guitar dealers and put up an auction with titles like "1954 Stratocaster All Original", with a very sparse and non-specific description...not even close to convinicing for people who know guitars.

So you get some of these vigilantes bidding millions of dollars multiple times, with some funny user id's like I_POOP_ON_YOUR_SCAM or FAKE_AUCTION_CRUSHER.

[wheelman]

I had a guy sell me a guitar with a floyd rose whammy bar on it. And i really didn't need it but the price was right and it was an older ltd/esp. They were built better the older ones. So i get and it wont tune in the bridge keeps going forward. defenitly missing the springs or something. I didn't want to spend another dime on except put some new strings on and have it intonated. Those whammys can be about as much as i paid for the guitar. The guy never emails me back. I file a complaint with ebay and then with paypal. Ebay is helpful in the matter telling me what to do. This and Marc at sounscape very nice guy helped me out while i was in the process of an order he told me not to hesitate at all. He told me to file complaints immeditately so i did. But this jerk never emails then he finally emails me and says send it back. So i do i am waiting and waiting for a refund. And this whole time i am really a newbie to ebay. Finally ebay tells me to file a complaint with the federal bereau of investigations even gives me a link to it. Ebay was about to ban him i think and he finally gave me the money. Talk about nerve racking. The waiting is the hardest part. I was like the guys gonna have to pay me back he runs a pawn shop and does probally 90 percent of his business with ebay. But he would ignore me and i don't think he would of payed me back unless i did all of that with the help from ebay and Marc from Soundscape. The moral of the story do not buy a guitar from a pawn shop unless you walk through the actual door. Plus don't let people rip you off go through the process and make sure they pay up if you were wronged. It could take awhile but it is worth it. I know now their is other scum to worry about on ebay.

[Colin]

One of the things that I find effective against corporations is to threaten to file a complaint with the state attorney generals office. Every state has an Attorney General office that handles complaints against corporations in their state. Nothing much may come of the complaint, but it causes problems for the corporations and the state will investigate. This is usually my first step before suing the firm in their local small claims court.