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Ebay Threatens Frauds with Warnings

By Art Micklewraith
Ebay is once again dealing with the ramifications of fraudulent auctions.

The Missouri Attorney General, Jay Nixon, sued one allegedly fraudulent Ebay merchant this week. Michael D. Pickens is accused of selling worthless clothing as new merchandise from Banana Republic and other leading retailers.

Michael Perkins duped consumers who thought they were buying resalable clothing, but got stuck with bales of trash instead," the attorney general said. According to the petition filed in Harrison County Circuit Court, consumers who ordered bulk quantities of top-quality, new or "gently used" clothing from Michael D. Pickens received a surprise when their shipments arrived. Instead of the Victoria's Secret or other big name brand clothing they had seen advertised in photographs on Ebay, they found foul, stained or torn clothing; ruined clothing of all kinds, shards of glass, broken appliances, and believe it or not feces.

Nixon's lawsuit asks the court to issue a permanent injunction against Pickens and award civil penalties of $1,000 per violation of the Missouri Merchandising Practices Act. The lawsuit also requests that the court order Pickens to pay restitution and 10 percent of the amount of restitution to the Missouri Merchandising Practices Revolving Fund.

A curious note on these accusations; if Pickens intended to steal his customer's money why did he send them anything at all? If the shipping time was supposed to provide him a traceable alibi for a few days why fill the boxes with junk and worse?

Ebay and it related companies tell us they are worried that their customers are having "bad buying experience(s)" in the words of PayPal spokeswoman Amanda Pires.

The suit against Mr. Perkins is about his wrongdoings not Ebay's of course, but certain endemic fraud problems at Ebay are things the auction giant can and should do something about. For example, buyers continue to complain about vendors who claim they would accept credit cards for payment when in fact they do not.

Merchants on eBay are sometimes reluctant to honor the cards since credit cards, like Mastercard and Visa, charge between 2 and 3 percent of each transaction. Dishonest ones still advertise that they accept credit cards to lure customers in and then try and pursued them to use another form of payment.

This week, eBay took strides towards ending the fraudulent practice of ‘shill' bidding. Some merchants on Ebay have always had friends, hirelings and henchmen deceptively bid up auction items. Steve Oglethorpe, a senior manager at Ebay has issued a warning to merchants ordering them to have their associates abandon the practice.

"Shill bidding is bidding that artificially increases an item's price or desirability," said Oglethorpe. "It includes bidding by individuals with a level of access to information about the seller's item not available to the general consumer. Shill bidding unfairly manipulates item prices and undermines trust in the marketplace, and is prohibited on eBay." According to Mr. Oglethorpe, merchants who engage in shill bidding will have their accounts suspended. What they are in fact promising is to not allow proven frauds to sell on their site. This is not presumably a big change from their policies before this week when it is hoped they did not allow thieves once caught to continue to operate on their site. Unfortunately while their reputation suffers and customer complaints continue all Ebay can come up with is a blanket disapproval of fraud.