CNBC Story on eBay Fraud
storm888
Posts: 11,701 ✭✭✭
At 4:00 PM EST, 7-18-06, CNBC's "Closing Bell," is scheduled
to air a story about fraudulent sales on eBay, and what the
current circumstance may mean to the future of the company.
Story reports that 20% of eBay revenues come from fraudulent
sales.
Tiffany says 70% of their items on eBay are counterfeit.
Tiffnay files lawsuit: claims "eBay doing nothing to solve
the problems."
89,000,000 auctions per day; eBay says control of the problem
is "not possible." eBay refuses to appear on CNBC.
eBay 1/4 earnings to be announced tomorrow. Share price down
$22 in past 6-months. Currently @ $26.05.
Counterfeit sports jerseys may be #1 eBay fraud problem, according
to story.
All this 48-hours after largest coin fraud in eBay history revealed.
A bad thing.
storm
to air a story about fraudulent sales on eBay, and what the
current circumstance may mean to the future of the company.
Story reports that 20% of eBay revenues come from fraudulent
sales.
Tiffany says 70% of their items on eBay are counterfeit.
Tiffnay files lawsuit: claims "eBay doing nothing to solve
the problems."
89,000,000 auctions per day; eBay says control of the problem
is "not possible." eBay refuses to appear on CNBC.
eBay 1/4 earnings to be announced tomorrow. Share price down
$22 in past 6-months. Currently @ $26.05.
Counterfeit sports jerseys may be #1 eBay fraud problem, according
to story.
All this 48-hours after largest coin fraud in eBay history revealed.
A bad thing.
storm
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
0
Comments
CNBC website, soon.
May not teach this board much, but it is good that
the story is getting into the mainstream media.
Probably not good for sellers in the short-term, but if
the problems are not fixed soon, there will NOT BE
a long-term.
storm
<< <i>
All this 48-hours after largest coin fraud in eBay history revealed.
storm >>
Storm, do you have any links regarding the coin fraud?
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The story is on YAHOO FINANCE site. Being discussed on
eBay stock message board at YAHOO, now.
storm
edited to add: Sorry, still clueless on making link thingys.
They are now wide open to direct competition - people are just looking & waiting for somewhere else to go. Fortunately for eBay, no one else currently exists that is any more secure and has the infrastructure to handle everything like eBay does, but inevitably, someone else is going to come along and break up this little monopoly. It is a monopoly - almost a perfect monopoly - the level of incompetence required to screw up a cash cow like this is beyond comprehension.
I think the 20% of income from scam auctions is a ridiculous figure, I believe that there is no chance scams account for a significant portion of revenues.
What if all sellers had to provide ebay with SS#, state sellers permit and a valid credit card in the sellers name. Do you think that would minimize the problems?
Mark
"If I ever decided to do a book, I've already got the title-The Bases Were Loaded and So Was I"-Jim Fregosi
I believe that there is no chance scams account for a significant portion of revenues."
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I agree the 20% sounds high. But the real number is likely significant. The one sports-dealer
on the CNBC story said that he had worked with eBay to close down more than
100,000 auctions that were selling fake jerseys in the past 12-months. That is JUST ONE guy's story.
Tiffany would not waste time with a lawsuit unless they were being hurt.
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(This CW story was updated at Bloomberg yesterday and linked on YAHOO
yesterday, but I cannot find it at YAHOO. I doubt they took it down, but they
are now fast friends with the alleged culprit-enablers.)
"Former Coin Dealer Pleads Guilty to Defrauding $400,000 on EBay, Coin World, July 3, 2006."
A former Florida attorney and coin dealer has pleaded guilty to defrauding more than
$400,000 through Internet auction of coins and other collectibles on eBay.com the US
Attorney for Southern District of Florida announced June 13,Martin Eugene Haber faces up to 20 years
for each of 6 counts of wire fraud and mail fraud and fines of up to $250,000. He may be
ordered to pay restitution.
The Internet Fraud Complaint Center received more than 50 complaints that Haber did not send merchandise buyers paid for.
The Consumer Sentinal, an online enforcement tool, and local area police received another 50 complaints.
The total of 188 complaints of fraud were received between May 2001 and January 2005.
Even after local police arrested Haber for fraud he continued selling items on EBay using a variety of names including those of
family and business associates according to the US Attorney press release.
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and a valid credit card in the sellers name. Do you think that would
minimize the problems?"
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My friend opened another account last week. They did not ask her for a state
sales/excise tax license, but they did get into some details that seemed new.
She had to give them a credit card. She then opted to link to PayPal as
an alternative payment method. To open a new store, even if you
have other stores, and a PayPal account, you have to meet the FB
minimums (20 or 30), OR you can become "ID Verified." She went the ID route.
They took her social, her credit card number, her drivers license number,
AND made her call VeriSign to answer more questions about information
in her credit file. They wanted to know about current and past employers.
The whole thing ONLY took two-minutes and she was good to go. (A
crook with just a few easy to find answers, could probably have easily
pretended to be her.)
Also, you can easily BUY FB on ebay. It is not "against the policy," but
should be. A crook buys his FB, and in a few hours he has a
store opened without going through the VeriSign process.
(In less that 24-hours, you can buy more than 50 positive FBs on any
given day. The cost is way under 50-cents per FB. The purchased FB
shows-up almost instantly.)
So. The point is, whatever they are doing, even though it "sounds tough,"
it seems NOT to be WORKING.
I am very "PRO eBay," but they are on the wrong track and have been for a
VERY long time. I will be surprised if their share price does not flirt with the
mid-teens b4 the needed reforms are made. (Earnings to be announced at
4:05 ET, tomorrow. It is expected that if the #s are REALLY bad, they will
delay the announcment by an hour or more to avoid getting creamed in
after-hours trading. I expect the numbers to be OK, but the future is
VERY uncertain, IMO.)
storm
have "certified stores" or a new auction site needs to be created that has
"certified stores/sellers""
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That would solve the problem. But, eBay would no longer
be a $37-billion company.
storm
When I subscribed to SCD for many years during the 90's, I don't remember all these problems about fraud, excessive shipping charges, stolen scans/descriptions and overall hassles. Where were the patoutdoorsmen of the world selling tens of thousands of dollars of wax?
There were always very questionable items/auctions going on (Lou Gehrig baseballs selling for $500 from Coaches Corner for example). But did fraud ever hit such a high percentage of total revenue? It's amazing that any business got done (i.e. in the classified section with no feedback forum to check for reputation).
Certified stores would kill their critical mass and kill their stock.
A revamped feedback system would solve some of this problem. The system now is about 10 years out of date.
The system now is about 10 years out of date."
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That is correct. The FB system is the REAL culprit. Almost
every fraud victim says, "But, their FB was perfect and they
are power-sellers."
Since eBay policies allow the selling of FB, it becomes more
obvious that when the company says, "Check the FB before
you do business with anybody," they are simply promoting
a myth. If you can buy FB on eBay, how in the heck can it
have any real meaning?
There are MANY totally honest sellers who buy FB when they
are starting out. eBay has promoted the myth so effectively
that it is MUCH harder to build a zero-fb business than it
was even a year ago.
storm
They have the money, the capacity and they are generally pretty good at whatever they do ....we will see
Groucho Marx
How many times is there a thread about excessive shipping costs on here? Don't bid on the darn item if you don't like the shipping terms! You always have a choice, and nobody holds a gun to your head.
How many times do we hear people complaining about condition? All the time, but that is because they are trying to find something for nothing, and guess what? The old addage always holds true..."You get what you pay for." Unless the card is advertised as an 8 and in reality it is a 2, then shut the heck up. We all know how subjective condition is anyway, and how it is all a big game(which will end sometime, so I wouldn't want to be the guy sitting on 50 grand worth of 9's). But again, you have a choice! If the guy doesn't have a return policy, then simply don't bid on the item! Nobody is holding a gun to your head and telling you to buy it with the hopes of getting a bargain.
Buying counterfits. Again, it is people trying to get something for nothing. If you can't afford a guaranteed authentic Ruth card, then don't get one. But don't try and think you can pull a fast one by finding a 'sucker' who is selling something that 'they don't know' what it is...and when you get burned, don't go crying to mama. If you have any loved ones who you think may fall prey, then educate them, plain and simple.
The only thing you can't control is a good guy who suddenly decides to go bad, and he simply keeps your money and you are out. Ebay needs to hike what their insurance covers.
A good consumer should always look at every purchase with a skeptical eye, as it will save you in the long term. It may cost you a bargain, but it will save a lot of headaches. Know who you are buying from too. Teach your kids that.
As for guys committing fraud? Educate yourself and your loved ones, and don't worry about it. As for the people who fall for the frauds? I bet most don't even know, and they are happy as pigs in sh!t...ignorance is bliss. Those that do learn, learn the hard way. Those that sell take a gamble on getting in trouble with the law. Eventually they get in trouble. If they stop soon enough, then hey, at least they have money to put back into the economy. They aren't eating the money.
I dont' condone fraud, but you can really protect yourself if you do it right, and not just on Ebay. There is fraud everywhere all the time, and it often comes from rich guys who are ramming you in the a@@ right now and you probably don't even realize it. If it continues at least ask for a reach around.
"They have the money, the capacity and they are generally pretty good at whatever they do ....we will see"
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I predict that google will not jump in. "Safety" is the only real weak spot
in eBay's biz-model. There is no reason to think that google can build a
safer venue, AND still generate the kind of revenues demanded by the
required investment.
I wish I had the answer, but in the past couple of years I feel that I
have fewer solutions in mind than I did when I first started thinking
about ways to make eBay a better/safer place. 200,000,000 folks
may be just too many to police; even for the google boys.
(It is funny to me that eBay now takes some of the steps that I
encouraged and thought would work two-years ago, and the
mess has gotten more messy, not less.)
storm
You mean kit young?
steve
<< <i>It is strange ripping Ebay knowing how much money they made us, or how easy it became to build a collection. >>
Yep, and they made a sh*tload of money off us too. That's the way the Free Market works, and given the alternatives I'm happy with it.
That said, what has frustrated me is its monopolistic practices. Ebay is the only game in town, and acts like it. This was the attitude of Microsoft, and look where it got them: Rich but despised.
If you like the free market, you have to not like companies like the Bay and Microsoft that have dominated the market and skewed it to themselves with little competition. Companies need competition the same way that we need exercise: it keeps them innovative.
Ebay is an example of market failure because the barriers to entry are so big that only the deepest of pockets (Google! Please!) could compete against it. It has not innovated, nor improved itself very much since its inception.
Worse, during that time it has allowed itself to become party to scams and fencing of stolen goods. Ebay might have gotten away with it when it was a few thousand users but not when it's as big as it is today.
When markets fail, governments usually step in. As a neo-con/libertarian I would prefer that the market handle things before that happened.
In short, I understand your frustration with the whiners who slam the Bay. However, there is more to the whining than high shipping fees.
From Seller Central message boards..........
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FB(2) "Jul-02-06 12:26 PDT 1698 of 1726
"IM INTERSTED IN SELLING ON EBAY, WHICH I'VE NEVER DONE BEFORE. SO WHEN I WANT TO SHIP MY ITEM HOW DO I GO ABOUT THAT??? DO I JUST TAKE IT TO THE POST OFFICE AND THEY PACKAGE IT AND SEND IT?? HOW DO I KNOW WHAT ADDRESS TO SEND IT TO?? DOES THE BUYER TELL ME? DO YOU END UP PAYING MORE TO SHIP THE ITME THAN WHAT YOU GET FOR YOUR PRODUCT IN RETURN?? I WOULD REALLY APPRECIATE SOME ADVICE, BECAUSE I HAVE NO IDEA HOW TO GO ABOUT THIS. THANKS SO MUCH. "
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Maybe too much opportunity is not a good thing.
storm
What are the ways e-bay could improve feedback and prevent sellers from "buying feedback"?
loth
prevent sellers from "buying feedback"?"
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FB has been for sale on eBay for as long as I can recall.
If eBay wanted to stop the practice, they would stop
it and lose the money they make on it.
Sadly, eBay's propaganda about the value of FB has
made it almost impossible for honest sellers to "get
started" QUICKLY without "a little boost" from the FB
merchants.
So, eBay profits on the sale of the FB and they profit
when new sellers can get going fast.
If FB was abandoned and replaced with an independent
"oversight group" that awarded somekind of a universally
accepted "seal of approval," we might be better off.
Will not happen though.
Problem is, you cannot do good business with bad folks,
and eBay has no way to keep the bad folks out of the
game. (No economically acceptable way, that is.)
storm
Ebay has to be careful though with what it does or they will kill their venue only status. I do not see why everyone tries to say Ebay is a monopoly it is not a monopoloy or even close to it. You have a choice on using Ebay or not. Microsoft got in trouble because they were selling programs that forced users to go out and buy other products in order to use the original program correctly. Since around 90% of the computers in the country use Windows the users did not have much choice if they wanted to use their computer.
Their fees are cheap when you think about it like this.. What other marketplace in the world provides the exposure your items can get for less money?? THere are none.
What is funny everyone complains about Ebay, but they keep on using them. Yes the feedback system is flawed, but it is alot better than it used to be.
I remmebr stories of the Savannah Scammer on Ebay.. This woman sold counterfeit coins for like 4 years on Ebay befre she was finally NARU'ed. It was estimated she got away with 500,000 dollars and was never prosecuted for her crimes. MUch of this is as much the buyers and law enforcement fault as it is Ebay's.
People commmit crimes!
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Correct. And, eBay profits from many such crimes.
Thus, eBay has little incentive to stop those crimes.
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FB sales - in the manner they have being accomplished for years -
are not a violation of eBay rules. Hundreds of sellers engage in
the practice, and eBay wants them to do so. The faster a new
seller is made viable by "excellent FB," the sooner eBay starts
taking their cut.
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eBay is not a "monopoly." They provide a great service and they
do it better than any other company. Their refusal to make their
venue safe for buyers/sellers is my ONLY "complaint," and that
refusal may one day cost them their lead in the marketplace.
storm