Friday, July 28, 2006

Communications Law Centre Cites 48 Percent of Auction Customers Report Having a Negative Experience

According to the Communications Law Centre (Australia) 48 percent of the people they surveyed reported having a problem with a auction transaction.

Nick Galvin in the Sydney Morning Herald reports:

"Forty-eight per cent of the auction users surveyed by the Communications Law Centre said they had experienced problems when buying an item. Most often they did not receive the goods they had paid for or, where the item was received, it was not the same as had been described on the site."

eBay Australia disputes this figure:

eBay's director of trust and safety, Alastair MacGibbon, said he had "severe questions" about the conclusions in the report.

"If there was even a remote chance the [centre's] figures were even marginally correct there is no way we would have survived a weekend let alone 10 years on the internet," he said.

Mr MacGibbon said the survey was inadequate and open to bias because it had been conducted online. However, he declined to reveal eBay's own figures on online fraud, other than to repeat that a "fraction of one per cent" of the transactions on the site resulted in confirmed fraud.

Link to Australia story, here.

Interestingly enough, there are stories throughout the world that support the Australian claim. In February, I did on a post - where the NCL (National Consumers League) released the top ten scams of 2005. In the report, which lists auction fraud as the "number-one" problem - they added a "telling" paragraph:

In the fall of 2003, online giant eBay removed the link from its Web site to As a result, the number of auction complaints reported to NCL's fraud center dropped to 1/6 its previous level. Based on statistics prior to eBay's action, NCL estimates that there would have been 30,720 auction complaints in 2005, representing 71 percent of complaints.

Link, here.

More recently, the State of California (where eBay is located) issued an alert on an "emerging" eBay fraud trend:

California Issues Alert on Emerging eBay Fraud Trend

And for a British perspective from the BBC on eBay fraud, link here.

eBay's take in this story was to blame their own "users." The reason eBay cited was (users) having their accounts taken over - because they responded to "phishing" e-mails and didn't have their computers protected properly.

Just this week, Sophos announced that 75 percent of the phishing attempts they saw target eBay and PayPal users. Normally, the intent is to "take over" an eBay, or PayPal account and use the account to commit fraud.

For the report by Sophos, link here.

eBay is immensely popular and loved by many. They are being targeted by criminals and this isn't their fault. Instead of down playing the amount of fraud - they need to take another approach - which is a "zero tolerance" attitude towards it.

After all -- should they fail to do so -- they will continue to be targeted and might lose the most important asset they have, which is their customer.

Until then, the main line of defense is to continue to educate the user and recommend that (all the users) support the fight against fraud on eBay by reporting what they see.

So far as the phishing attempts - a good place to report them is PIRT (Phishing Incident Reporting and Termination Squad) run by CastleCops and Sunbelt Software.

PIRT is run by a lot of dedicated volunteers - who like many of us - are sick and tired of seeing people get taken.

A great educational resource - to share with others and written by a eBay user - which is the subject of a previous post is:

25 Ways to Avoid Auction Fraud From a Seller's Perspective

And if you want to have a "safer" shopping experience on eBay, there is a service that bonds sellers and once they are bonded; guarantees the transaction. Here is a post, I did on buySAFE:

buySAFE Protects it's Customers from Fraud on eBay

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