Posted on 03/23/2003 8:11:51 PM PST by Dubya
SAN JOSE, CALIF. - Robert Beck suspended his distrust of online auctions last month and went for a top-of-the-line speaker system. He cast a winning bid of $1,900, paid by credit card and waited for his first eBay purchase.
The speakers never arrived.
Last week, detectives confirmed to the 25-year-old engineer that the sellers, an Arizona couple, had cashed out their bank account and fled town. The couple allegedly stole more than $100,000 from more than 500 bidders.
The case has cast suspicion on eBay Inc.’s anti-fraud software, which the San Jose-based company installed nearly a year ago to counter complaints about fly-by-night sellers.
Mr. Beck and other victims say the software – which ostensibly gets better the longer it’s in use – should have alerted eBay to cancel the auction long before hundreds of people parted with their money in a classic swindle.
"The red flags in this case were all over the place," said Mr. Beck, a St. Louis resident who says he may sue eBay for negligence. "For eBay to say that the software works – the principle of it makes me sick."
EBay spokesman Kevin Pursglove said the company’s Fraud Automated Detection Engine, or FADE, was never meant as a panacea.
"The reality is that no single tool is going to be able to eliminate fraud in the offline world or the online world," said Mr. Pursglove, who would not discuss specifics of the Arizona case. "We’ve been very honest with our users on this one: FADE will go a long way in terms of combating fraud, but it’s not going to be the end-all be-all."
EBay maintains that less than one one-hundredth of 1 percent of all listings are fraudulent. But with 180 million items for sale in the fourth quarter of 2002, eBay could have hosted as many as 18,000 fraudulent auctions in the last three months of last year.
Chief Executive Meg Whitman introduced FADE at the annual shareholder meeting in June. She promised it would make "major strides" combatting fraud. The company has also forged closer ties to police officials, the U.S. Postal Service and international delivery services.
FADE collects data from defrauded customers, compiles it in a central database, then alerts eBay’s private fraud busters of new auctions that match patterns of known scams. Red flags include unexpected changes in a seller’s behavior; a new user with large quantities of very expensive merchandise, particularly computers or other electronics; or an address linked to a country – eastern Europe tends to be suspect – with a high incidence of eBay fraud, Ms. Whitman told shareholders.
EBay reserves the right to cancel any suspicious auction – ideally before users part with their cash.
Auction enthusiasts said they never expected FADE or any other tool to eliminate all fraud, but they question why the software couldn’t catch the Arizona suspects, whose actions caused alarm even among some novice users.
In early January, the couple from Munds Park, Ariz., began auctioning DVDs for $5 to $10 each under the name "mylittle1s." On a customer comment page, dozens of buyers praised the vendor for shipping products quickly.
About a month later, they switched from DVDs to more expensive electronics and invited more bids. But they also switched from a home address to a P.O. box and said items wouldn’t be shipped until weeks later.
Other warning signs began popping up even as the bidding continued and money flowed into their account – they stopped responding to email, complaints poured in and mylittle1s’ feedback rating plummeted.
It was an eBay user from Santa Clara who alerted authorities – calling Coconino County, Ariz., sheriff’s detective Bruce Cornish.
On March 4, Detective Cornish went to the couple’s address – a vacant, doublewide trailer a short drive south of Flagstaff. He identified them as Michael and Nancy Dreksler, who used online aliases Tony and Renee Boseli. He contacted eBay, which halted the couple’s auctions the next day.
Detective Cornish says he suspects the Drekslers, who are also wanted in Arizona for forgery, fled to Colorado. So far, he has found 510 victims who lost a total of $104,644.
Andrew Maus, a computer programmer who never received a $1,000 Onkyo stereo receiver from mylittle1s, blames FADE. He said the software should have caught the rapid increase in the price of goods sold as well as the quick deterioration in the feedback rating and high volume of customer complaints.
"I can’t do business again with eBay until I get my money back," said the 40-year-old from Charlotte. "This could have been easily prevented."
Computer scientists aren’t so sure.
Chris Welty, a researcher for IBM Watson Research Center in Hawthorne, N.Y., said anti-fraud software often lulls consumers into feeling secure, but the technology is notoriously fallible.
Every credit card I have ever used lets me reverse the charges as long as I complain within 30 or 45 days.
Does this joker not know how to contact his credit card company and fill out a one-page affidavit?
The problem, is that the hucksters string along the duped for longer than the allowable "get your cash back" period. E-Bay is great and all, but i'd never risk/bid&pay more than $50 on any item.
The pro scammers go for big $$$ items so that they can run a couple "50 items at $2000 a pop" auctions and then take off.
LOL! I sent several complaints to them for the plethora of off-eBay solicitations I was receiving via email. Months later, tried to bid an item, and received a message that I was cut off from e-Bay for "behavior unbecoming a member."
Attempted three times to find out what they thought I had done...never a reply after wasting my good time through their circuitous maze. Good riddance!
He tried filing for bankruptcy, but the judge threw his case out because he couldn't show what happened to all of the money those last 4 months. All of his financial "records" were handwritten post-it notes and a single school binder! At least the Attorney General in his home state can finally go after this guy, now that the bankruptcy has been thrown out...
Thank goodness I used a credit card, & was protected with fraud insurance. Unfortunately, he also ripped off a crippled retiree, a couple of students, & a non-profit charity though, & yup - they all used money orders.
On the other hand, I occasionally sell my company's products on Ebay (it's not a good venue for commercial products) and have had several winners demand that I send the goods (typically around $500 to $1K) before they will pay. I make a second attempt to get paid first and if this fails, issue neg. feedback and contact Ebay and repost the item.
There are many risks in all forms of online commerce - Ebay seems to be a safe place for weasels to try their tricks.
If you think perfect feedback is a good indicator you're badly mistaken.
The two jokers I've dealt with on eBay both had good feedback with over 100 comments.
Both disregarded eBay's selling/buying rules that you're supposed to make contact after 3 days of auction close. I gave up on both of them after repeated emails. 2 weeks later payment showed up from one clown. "Patience", he said. Some people think you should be paid when THEY are good and ready.
The other bozo sent the item without any notice or reply to my repeated emails. I went ahead and bought another item since I'm not a mind reader and had no idea the seller had already sent the item.
I have had about 40 other deals that worked out very well.
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