Gift Card Fraud Scheme on eBay
sc999
Posts: 47 ✭✭
How it works:
- Criminal obtains dozens of "stealth" accounts; these can be purchased easily from online brokerages
- Lists hundreds of bogus coin auctions from multiple accounts
- Uses another stealth account to bid on one of these fake auctions
- Pays with a stolen eBay gift card
- Fake seller cashes out
Notes:
- Always single digit feedback seller accounts
- Auctions always depict pocket change but sell for insanely inflated prices, ie. $2500 for a 1979 SBA Dollar
- Prices are always very even numbers: 1000, 1200, 1300, 2000, 2500
- Titles are often nonsensical, overly generic or copied from another seller's title
- The criminal floods eBay with hundreds of these auction at a time, but only bids on a few per day
To illustrate the point - here's a cluster of these auctions that ended today:
Any time I use the report feature on these listings, I always get the standard response, "We looked into your report and didn’t find the content to be in violation of our policy." This has been an ongoing issue for years and eBay doesn't do anything about it; why would they curtail criminal activity if it decreases company revenue?
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Comments
could this also be generating fake sales to make their other listings seem legit?
or, how do you know it is credit card fraud?
In addition to CC scams, it sounds allot like money laundering.
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I've always felt these were money laundering schemes.
It could be. But what is the evidence for it? There's other things that could be going on, including the aforementioned money laundering.
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forgot about that angle
if there are no chargebacks from upset credit card holders, then i'd go with money laundering
the fbi might be interested. if they are i'm sure the irs would be next
I had originally posted this on the forum back in July, but my account was locked and it was never published. Account was unlocked today, so the above automatically posted and is a truncated version of my full write up. Since writing this, I've come to believe it is not credit card or money laundering but gift card scams. Quoting a reply I made on an earlier post today:
_
I initially believed stolen credit credit cards to be the source of funds, but now believe gift cards, which are cleaner, less traceable and take longer to be reported than credit cards, are the vehicle. Gift card scams are one of the most common forms of consumer fraud in the United States, particularly involving imposters posing as government agencies, tech support, or family members. In 2024, the reported losses to gift card scams in the US was around $250 million. Certainly, some amount of this business is being run through eBay._
A scammer will call up someone's grandma, tell them grandson is in trouble and to go to the store and buy eBay gift cards. The scammer gets the gift card number, purchases a $2000 coin on eBay and cashes out. Money laundering could be involved if illicit cash is used to buy eBay gift cards, but given the popularity and prevalence of the gift card scam today, this makes the most sense.
Can't imagine how eBay corporate hasn't figured this out yet. After all, eBay still takes 15% of the purchase price.
last i heard, ebay gift cards can't be used on coins
Evidence:
https://consumer.ftc.gov/node/77253
https://pages.ebay.com/giftcardscams/https://pages.ebay.com/giftcardscams/
I've followed this situation for years and thought classic money laundering was the explanation for the longest time. But it wouldn't make sense since the purchasing account would have to have a bank account connected to it make the purchase and the purpose of money laundering isn't depositing illicit cash into a bank. Now, cash could be converted to eBay gift cards then laundered, but given how widespread the aforementioned gift card scam is right now, this seems to make more sense.
This operation is clearly being carried out by bots the scammers employ. I find it implausible that sellers phishing for gullible buyers would deploy hundreds of bogus accounts to make other listings seem legit. Again, all of these listings have the same characteristics:
• Extremely common circulating coins listed at outrageous prices
• New seller accounts with zero feedback
• Listings receive one bid—from a zero-feedback buyer
• Usernames often random combinations of letters and numbers
• Round-number starting bids: $1000, $2500, etc.
• Vague, poorly written titles—often in all caps or lowercase
• Keyword stuffing: “Coins,” “US,” “Lot,” “Error,” “Rare”
• Low-quality or irrelevant photos
• Titles unrelated to the coin pictured
• Identical keyword patterns across many accounts
• Auctions ending in tight time clusters from supposedly unrelated sellers
• Rural, obscure item locations
_eBay gift cards can be used for most purchases on eBay.com, including coins, bullion, paper money, and collectibles, as long as:
The seller accepts eBay-managed payments (which nearly all do now).
The transaction is fully processed through eBay checkout (not an off-site or “contact me directly” sale)._
Not sure how accurate this is or not. But if the gift card option is out, what's going on here? Maybe prepaid VISA gift cards?
Correct. There are also limitations that would get in the way of redeeming many of the values in the OP’s screenshot. Plenty of opportunities for money laundering, but not sure gift cards would work.
https://pages.ebay.com/giftcard/terms_conditions.html
A combo of all of these ideas being executed from the havens for those studies sounds reasonable.
Not true. See the screen shot above.
Respectfully, four brief points:
These questionable transactions have existed for decades. There has been speculation for nearly as long. Something or multiple things are going on. It is impossible that a casual observer would have figured out something that law enforcement hasn't.
All comments reflect the opinion of the author, even when irrefutably accurate.
But have you considered that I listened to a true crime podcast on my drive home from work and am now an expert?
I stand corrected.
All comments reflect the opinion of the author, even when irrefutably accurate.
lighten up on the new , relatively, guy
In business school they taught us that if you understand how somebody is compensated you can predict their behavior with several 9s of accuracy.
fleaBay collects their fee.
IF the gift cards are eventually charged back as fraudulent MC or V takes the loss (and it's a rounding error to them).
Worse, most are not charged back, because the fraud is the inducement to buy the cards, not that they were bought illegitimately - in fact, cashiers trying to dissuade granny from buying them is taken as volition!
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and why has the law not done anything????
is the law scared of FeeBay?(like: we do not have enough agents to go after feebay..)
it is smelly and toooooo eassy to ignore?
not suggesting anything here, but this is too big to ignore.
if you owe Uncle Sam 50 bucks... they move haeven and earth to get it...
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Sticky
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Why do you feel this thread should be a “sticky”?
The listings don’t look likely to fool anyone and if this is about money laundering or gift card scams, it doesn’t necessarily apply to coins more than other types of items.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I am sure that every sort of scam mentioned in this thread has been used somewhere, including ebay. However, the OP seems to have simply made assumptions and conclusions about what is going on with the auctions in question.
Problematic aspects are simply dismissed or glossed over.
Example, in regard to money laundering:
Depositing illicit money into the bank - or more likely, using that money to buy MC/Visa/Amex gift cards - can be one of the steps in money laundering. The key is that the "seller" on ebay gets paid for his "rare coin", declares it as income, pays income taxes on it, and the money then becomes "legitimate", i.e. laundered.
In the original post It was stated matter-of-factly:
Maybe this does happen, but in the modern era I'm not sure how. I needed to provide my SSN to ebay and link it to a verified bank account. I suppose if someone hacks an existing ebay account then that account can be used/bought/sold anonymously, but it does not seem quite as easy as suggested, and in any case, hacked accounts are usually used differently than what is being discussed here.
Once again, I have no doubt that every type of fraud imaginable is occurring sinewhere on ebay, but I am not confident that it can be largely or mostly attributed to credit card scams.
I still suspect that money laundering is the basis for many if not most of the listings mentioned in this thread. It is simple and mostly flies under the radar. Except for bank deposits exceeding several thousand dollars, no one is tracking the source of an eBay buyer's funds. It's the income of the seller that is important. The seller takes the money in and reports the income and the money is laundered. The "rare" coins were found in circulation so no need to explain where the "valuable" inventory came from. Rinse, repeat, rinse, repeat, etc.
no sticky
we need actionable or numismatics educational stickies
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