The Very Highest Quality Advice...
Beware Coin Auctions Cheats||
Does eBay Profit from Fraud?
There are many fraudsters and conmen selling on eBay. does eBay care as long as it gets its fees? We suspect not!
So, yes, we believe eBay profits from fraud, and does so knowingly.
Fraudulent & Misleading Auctions
It's easy to find complaints about fraud on eBay.
A quick search on Google for "ebay fraud" returned 6,350,000 results!
Even if only half of these contain unique reports about fraud on eBay, that;s an awful lot of fraud!
Worryingly, the first item listed was about an estimated $1 million fraud.
Non Delivered or Non Existent Goods
It seems that the most frauds, and the biggest areas of concern relate to auctions where the buyer has paid, but no goods arrive.
"It's less than 0.01 percent, and we've seen that rate coming down recently," said eBay spokesman Kevin Pursglove. He attributed the declining rate to increased consumer awareness of the possible hazards of auctions. Neither Amazon nor Yahoo returned calls for comment.
eBay Spin & Under-Estimate of Fraud
The IFCC, too, said that less than 1 percent of auctions resulted in fraud.
Just looking at the statistics quoted above, the IFCC's (Internet Fraud Complaint Center, run by the US Government) estimate is approximately 100 time greater than the figure quoted by eBay spokesman.
Our own estimate is that possibly 10% of all goods offered for sale on eBay are fake, non-existent, or described inaccurately, and we also believe our own estimate is probably more accurate than eBay's own. If we are right, then this means that eBay make about $600 million profit from fraud.
From a quick look at the Google results, it seems that the worst categories for fraud are cars and computers, although other high value consumer, electrical, and fashion goods are also high on the list.
Our company happen to deal in coins, including gold coins, and jewellery, so most of the questionable auctions we notice are related to these categories.
Apparently "shill bidding" is another big problem. This is where the vendor gets friends, or uses multiple accounts, to bid the item up, and sucker genuine buyers into paying too much. Surely, if a buyer sticks to the maximum price he wants to pay, he should not be too unhappy if he ends up buying what the wanted at the price he decided. Shill bidding happens also in conventional "land-based" auctions, and probably always has and always will. Perhaps this should be a case of "caveat emptor".
We suspect that a lot of shill bidding is done to get around eBay's high reserve price fees, and increased listing fees for higher starting prices, in which case, perhaps it is eBay who report it, as it eats into their fee income, or are being being a little too sceptical?
Another big problem area is "phishing", done through phoney look-alike websites. In most cases, the victims have acted pretty stupidly. It seems that no matter how much publicity this gets in the international media, or now often people are warned by the genuine site operators, there are always some dumb enough to get caught. It must be very difficult to protect people against their own stupidity.
A growing problem. In most cases, people are not careful enough to protect themselves, but there are persistent report about security breaches at major companies, including banks.
A Google search for "paypal fraud" returned 2,390,000 results. PayPal is owned by eBay, and appears to be its preferred payment system to be used by its members.
One area of fraud that we see and hear little about is what we would call misdescription fraud, and yet we believe it is a major section of the fraud scene.
Let's give a few simple examples:
Barnum & Bailey
- Gold Coins
If you look at the "coins" category of eBay and search for "gold", you will easily find many auctions where items described in their titles as gold are anything but. A lot of them turn out to be gold-plated, although the vendors often use euphemistic descriptions, such as gold-layered, to avoid stating the truth clearly. In some cases, the description does state the item as gold plated or gold coloured, in which case the title is misleading, and one would think eBay would want to stop its potential buyers having their time wasted having to read the small print of every auction. In many cases, however, there is nothing in the description to warn the uninformed buyer that he may be about to pay a gold price for a brass imitation. In our opinion, such gross misdescription is indefensible, and is tantamount to fraud. Also, very worryingly, in our opinion and experience, is that when such auctions are reported to eBay as fraudulent, nothing happens. Again, perhaps we are being cynical, but eBay are making hundred, thousands, even millions of dollars or pounds in listing and sales commission fees from such auctions and their vendors, that we think they deliberately turn a blind eye to it.
- Pattern Coins
There are also many listings for "pattern coins". While official pattern coins exist, and in many cases are rare and valuable, there are many modern unofficial "patterns" which should really be described as fantasy, replica, or imitation coins. If we offer such pieces for sale, we try to ensure that our description would leave nobody in any doubt whatsoever about the exact legal status of the item being offered. This is not the case with most eBay vendors. Very few of them include a clear statement about the precise nature of the item. Some include words like "copy", presumably with a legal defence in mind, but the word copy is not sufficient in our opinion, after all you probably read a copy of the newspaper or a book, but the word copy in this context implies the genuine article, and does not imply an unofficially produced imitation.
Some eBay vendors use very questionable and inadequate descriptions to sell unofficial imitation and fantasy coins, and run dozens or hundreds of listing simultaneously, and have feedbacks into the thousands or more. We find it hard to believe that such a high number of suckers buy this crap, and seem to be happy with it. We presume that the vendors have very liberal return policies to keep the negatives at bay.
- Laboratory Created Diamonds
We are quite happy about the availability of man made diamonds, although most of the traditional jewellery industry is rather defensive about them.
What we object to are the hundreds of vendors offering as real diamonds, or as created diamonds, cheap imitations which are possibly CZ's (Cubic Zirconia) at best. Once again, we have nothing against CZ, as long as it is accurately described, and not fraudulently described as diamond.
Phineas T. Barnum was probably one of the greatest showmen ever. He was master of the art of subtle deception and subterfuge. He was one of the greatest publicists that ever lived. In the theatre or the circus, claims such as "The Greatest Show on Earth" can pass of fairly harmlessly as part of the entertainment. What we observe and deplore on eBay and elsewhere are many, many small dealers using "Barnum & Bailey" descriptions to part suckers with their money.
Antitrust Case Legal Case Against eBay & Coin Grading Firms
eBay, the ANA, the PNG, and & Barry Suppler are being sued
in federal court alleging anti-competitive conduct.
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