- The Washington Times - Monday, October 21, 2002

Federal and local law-enforcement agencies have mounted numerous investigations into online-auction fraud after thousands of visitors to auction Web sites, including EBay, have complained that they have paid for expensive items that have not been delivered.
Online-auction customers lodged more than 20,000 complaints last year with the Federal Trade Commission. Such complaints are the second-most common filed with the agency. The Internet Fraud Complaint Center said auction scams account for 43 percent of all reported online fraud.
The investigations by the Federal Trade Commission, FBI and various local agencies do not accuse EBay, which controls 90 percent of the online-auction market, of wrongdoing, but scam victims say the San Jose, Calif.-based company is not doing enough to protect them.
"There are some major loopholes," said Karen Christian, a computer technician who started a Web site called LaptopScam.com after falling victim to a scam when trying to purchase a laptop computer on EBay. "The perception of EBay is not the reality."
Miss Christian's experience helped spur an investigation by federal agencies and the New York Police Department into a seller who operated under the company names Electro Depot and New York Tech Surplus. The seller, Brian Silverman of Suffern, N.Y., gave Miss Christian a refund on the computer she never received, but others, including Mindy Bollinger, an advertising manager from Salt Lake City, are still waiting for refunds.
"I'm not out for revenge," said Miss Bollinger, who is still hoping for a refund of the $1,400 she says she paid Mr. Silverman. "I just want my money back."
Mr. Silverman's attorney, Darrell Paster, did not return calls made to his Manhattan office yesterday.
Similar stories abound.
In May, the FTC ordered several men selling computer equipment to pay $10,000 in redress after they reportedly accepted payment for items won in an online auction without delivering them.
The FBI has a warrant for the arrest of a man named Stewart Richardson in connection with thousands of dollars from EBay buyers who said they mailed payments for items they never received.
The case involving Miss Bollinger has garnered national attention because it involves hundreds of sellers from across the country.
The ability of sellers to receive payment without delivering items exposes imperfections in EBay's fraud-prevention system, Miss Bollinger and Miss Christian said.
EBay has long been praised for its self-policing system in which buyers and sellers share feedback based on their experiences. Greater amounts of feedback result in ratings designed to give users a sense of whether a seller is honest.
Miss Bollinger said Mr. Silverman's rating was largely positive, with about 400 favorable comments and 30 negative.
"He had a huge positive rating and was a preferred seller," Miss Bollinger said. "I never even suspected it."
But Miss Christian said positive ratings can be gained through legitimate sales and are no guarantee against occasional fraud. Some sellers choose a privacy option that prevents EBay users from viewing detailed feedback. Furthermore, comments cannot be submitted more than 90 days after a sale, a problem Miss Bollinger encountered after she was told numerous times that her laptop was on its way.

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