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Fighting Online Auction Fraud
by Reid Goldsborough
Link-Up Digital
September 15, 2003


Online auctions have been called the world’s largest marketplace, with eBay in particular evolving from a hobbyists’ enclave into a venue in which companies transact millions of dollars in business.

But the online auction world has also been called the digital Wild West, with rampant fraud taking place. Online auction fraud tripled last year compared with 2001, according to the FBI, and now accounts for 46 percent of all Internet fraud.
The largest online auction site by far is eBay, with an estimated 85 percent of the market. One interesting response to this fraud is the emergence of eBay vigilantes, people who break eBay’s rules in trying to thwart scams in the works when eBay doesn’t act.

Others oppose such tactics, feeling that innocents can be hurt by the actions of untrained, self-proclaimed cops, as can happen in the larger offline world. There’s also the risk that vigilantes themselves can be hurt.

Vigilantes have their reasons. Some may have once been victims. Others may simply be frustrated at seeing wrongdoing go unpunished.

“I really, really dislike scammers, thieves, cheats, and con artists, whether they work on a street corner or on the Internet,” said one eBay vigilante from northern Florida who asked that her name not be used. “I loathe those who prey on the less educated and more naive, and I’m enough of a bleeding-heart liberal to want to do what I can to stop such behavior,” she said in an e-mail interview.

The most common tactics used by vigilantes are sending warning messages to bidders in what they believe is a scam auction, placing and then retracting a bid so they can warn others with a message that becomes part of the auction about why they retracted their bid, and creating a throw-away account so they can place winning bids and leave negative feedback without getting hurt by receiving negative feedback in return.

The selling of pirated and counterfeit items is a big problem on eBay, particularly computer products, collectibles, and designer watches, jewelry, purses, and clothing. Another vigilante, a dealer of Filson wool coats, says that a competitor of his routinely tries to “fob” other wool coats as Filsons, and, in response, he routinely warns people bidding on the competitor’s auctions.

Though he says he gets plenty of thank-yous for his efforts, the potential of harming an honest competitor this way is obvious. This is one reason that such actions are against eBay’s rules. Engaging in these tactics can also risk your account. eBay can track multiple accounts created on one computer.

Beyond this are ethical issues. “Breaking the rules makes you no better than the scammers themselves,” said Janet Reyes of Reynoldsburg, Ohio, who buys and sells on eBay.

If you do spot a scam, Reyes recommends that you report it to eBay. Problem is, eBay typically doesn’t act in response, merely replying with a form e-mail, which is the core reason that eBay vigilantism exists. When eBay does act, it typically warns the person, suspends the person’s account for 30 days, or cancels the person’s account.
What eBay doesn’t do is report crimes committed on its site to law enforcement. It’s all too easy for scammers to create one new eBay account after another.

eBay isn’t the only venue for online vigilantes. In response to spammers sending millions of e-mails touting porn sites, quack health remedies, and illegal pyramid schemes, vigilantes have launched computer-aided phone attacks, causing the spammer’s phones to ring constantly.

The most notorious e-mail scams originate from Nigeria. Named for the section of the Nigerian criminal code that deals with them, “419 scams” begin with a heartfelt appeal for help in overcoming bureaucratic obstacles to get money out of Nigeria. All you need to do is put up a little money first. Some of the gullible have cost themselves or their companies big bucks.

In response, vigilantes have tried to scam the scammers. Reports indicate that in arranging meetings with scammers abroad, hard-core vigilantes have put themselves in harm’s way. More commonly, vigilantes receive threats of physical violence. Be careful out there.

If you’ve become a victim of online auction fraud, there are other ways to seek redress, and to vent. Along with filing a complaint with eBay, your local police department, and the U.S. Postal Inspector, you can put up a Web page to warn others. eBayersThatSuck.com is an existing site created for this purpose.

But there’s risk here as well. AuctionBlackList.com, which let people add auction scammers to a its database, was recently taken down because of liability issues.


Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway. He can be reached at reidgold@comcast.net or http://www.reidgoldsborough.com.

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