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Sunday, November 26, 2006

The Anatomy of an eBay Scam

Well, it looks like I may have been had. After over 10 years of being an avid eBay and PayPal user -- including 400+ positive feedbacks on my current account – it appears that I have run into my first scam at eBay. Better yet, it is the first time I have fallen for an apparent scam from an eBay user.

Everything started off relatively innocently – I was looking to add the Canon PowerShot SD800 IS to our camera inventory. While Ashley likes the pictures that our PowerShot G7 takes, it is a little bulky for everyday, in-pocket use. A natural alternative was to look at the smaller Digital Elph SD line. Given that the newer SD800 IS has two the most important features that our G7 has, the Digic III processor as well as image stabilization, it made perfect sense to pursue. So, in order to reduce the cost – I decided to look on eBay for a “lightly” used version.

After searching eBay for the right item to bid on, I came across auction #110056819205, which is for a like-new SD800 IS camera. After some basic bidding, I end up losing the camera by not bidding high enough. Now the fun was going to being. When checking the status of the auction the next day, I noticed that the seller (nadia99a) had re-listed the auction. Curious as to the reason, I noticed that the person who won the auction was “no longer a registered user”, so I figured the auction was now moot and contacted the buyer. After the exchange of emails, the seller and I agreed on a second chance offer price and decided to move forward. I figured with a 100% positive feedback rating of “8” that the seller was somewhat respectable. The buyer sent me the invoice and I paid via PayPal – this was on November 20, 2006. An interesting note here is that the eBay seller never sent the second chance offer, rather only sent the PayPal invoice – I did not notice this initially, but effectively for this reason the transaction was outside of eBay.

Upon completing the payment, I requested a favor of the seller. Since the seller lives a relatively short distance from my home in Thousand Oaks (45 miles or so in West Covina, CA) – I request that buyer ship the same day so I could use the camera during our Thanksgiving trip to Disneyland. The seller obliged and confirmed that it shipped out via USPS delivery. All seemed to be on track, so I was anxiously anticipating the arrival of the SD800 IS on Tuesday, November 21st.

The 21st came and went, no delivery of the camera. No cause for concern, the US Mail can be slow sometimes – I emailed the seller again – they confirmed that it shipped. The 22nd came and went, no delivery of the camera – now I am starting to get suspicious. I noticed that the seller still did not cancel the auction for which they supposedly were to selling me the camera, so I inquired – the seller responds that they have multiples. Then nothing came on the 24th, because it was Thanksgiving – then nothing again on the 25th.

Now things are really looking bad, so I decide to check the specific feedback of seller – all 8 of them are from the last week and for small purchases of only $0.01 each. Then, I noticed that the items that are being listed by the seller are identical to ones that recently sold. They are all small enough in value (a few hundred dollars), where perhaps they are thinking people will not make to big of a stink about them. The seller is also no longer responding to emails. It seems like a pretty clear case of eBay / PayPal fraud.

So, what to do now……thus far, I have :

  • Filed a claim (not just a complaint) with PayPal and hope that PayPal has frozen the appropriate amount of money in the PayPal account. This is set to resolve on December 4th, 2006.

  • Filed an incident report with the FBI’s IC3. IC3 is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center. They review reports and refer information to the appropriate local, state, or federal agencies.

  • Filed a report with eBay for an outside of eBay transaction.

I am hopeful the amount of money I spent on the auction will be returned to me, approximately $300 or so. However, the most important thing from my perspective is to make sure that the person perpetrating these fraudulent transactions is caught and stopped. If anyone is aware of any other appropriate actions, please let me know!

I will update my blog as information comes my way. Minimally, I have learned that I do need to look at the specifics of someone's feedback before bidding or doing business with someone. Especially in these types of cases where a lot of feedback has been generated in a short amount of time.

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Anonymous said...

Hi Ken,

You may have been taken but give it a little time. The long thanksgiving holiday weekend may have delayed it in the mail. Or maybe the seller forgot to send it and got caught up in the holiday. I hope you get your camera soon.

Ken Hanscom said...

This is a definite possibility that I considered and I hope that is the case. Unfortunately, I have contacted a few other individuals that are in dealings with this person and they had equal concerns. Given the way PayPal operates, its best to make sure the funds are available should the case be truly fraud. Thanks for the comment!

Biddy said...

I really hope you get your money back. The other thing you can do, if you paid with a credit card via Paypal rather than with transferred funds, is to file a complaint with your credit card company if Paypal are unable to get the money back from the seller.

It's a little late to say this for you, but for anyone else: 100% feedback is great, but (8) is not a total that should inspire absolute confidence. As you sadly found out, it's easy to get eight feedbacks quickly. If you want to buy a higher ticket item, I'd really recommend looking for a professional seller with feedback in the hundreds or thousands.

(Disclosure: I'm an eBay seller myself and have been for seven years.).

Ken Hanscom said...

Biddy -- those are some great points you made. I must admit, I was less cautious with this particular purchase than I usually am. I think I was in a hurry to get the item for the holiday and threw some of my normal caution into the wind. I am glad that I caught on fairly quickly as that will definitely help my chances in recovering the funds.

One intersting thing about the point you made with disputing the credit card is that PayPal / eBay state that their policy is that they may cancel / revoke accounts that go outside of their process. At this point, 7 years of activity on my current account (hotcalsun) does not seem worth it. I am going to let PayPal & hopefully IC3 take action now and reserve that as a last resort. Thanks for the advice!

Biddy said...

Re. the cancelling accounts thing with Paypal. My understanding of this is that Paypal require you to go through their dispute process (as you are doing) FIRST - and only if they are unable to get you a result should you contact the card company.

I guess this is fair enough: Paypal should be given a chance to get the money back from the so-called seller before they themselves are made to be responsible for your loss.

I certainly know people who have done card chargebacks and kept their Paypal accounts, so I believe this is still an option for you.

(If I get a chance amongst all the parcels I have to pack today, I will go and re-read the Paypal user agreement and see if I can find the relevent bit for you.)

Ken Hanscom said...

Thanks for the comments and taking a look at the PayPal agreement. I still have a little time before things get more dire. I have updated the latest news in my blog post here: