Online auction fraud hits close to home

Local and state authorities join the fight against fraud at eBay and other such sites.
By MATT BIXENSTINE
VINDICATOR STAFF WRITER
YOUNGSTOWN -- Detective Sgt. Anita Davis had just sat down for an interview when she remembered her first Internet-auction fraud case.
"Wait here; I'm going to pull up my favorite one," she said.
The case involved a Youngstown-area man in his 20s who had made at least $100,000 by fraudulently selling products on eBay ranging from computers to fishing lures. Most of the items never reached the buyers.
"This is just another crime," Davis said. "The methodology is a little different because it's over the Internet, and the getaway is easier, faster. Crime is crime -- only the tools change."
The Federal Trade Commission received 51,002 auction-fraud complaints in 2002, accounting for roughly half its Internet complaints.
Although eBay, controller of more than 90 percent of the online auction market, originated on the West Coast, Internet auction fraud has become a national problem. Most fraud cases involve a seller taking advantage of a buyer, though the seller can also be the victim.
Such cases are reported to the Youngstown Police Department on a regular basis, "probably about two to three a week," Davis said.
Twenty-nine state attorneys general, including Ohio's, recently participated in the FTC's Operation Bidder Beware, a yearlong campaign to crack down on online-auction fraud. The sweep resulted in 57 criminal and civil law-enforcement actions. It culminated in the creation of the Internet Auction Fraud Task Force to continue working with states and other organizations.
Slipping through cracks
The suspect in Davis' favorite case was convicted of theft by deception in 2002. But not all online-auction criminals are brought to justice.
"Are they clever? No," Davis said. "They just know there are more of them than us, and they're going to fall through the cracks."
Part of what makes Internet auctions vulnerable to fraud is their virtual nature, said Beth Roman, director of marketing and public relations for the Better Business Bureau of Mahoning, Trumbull and Columbiana Counties.
"The hard thing is that people selling are often individuals, not a company with an exact location," she said. "They can use post office boxes rather than a personal address."
It's a matter of finding violators to enforce the laws.
Delores Thompson, an FTC attorney specializing in Internet-auction fraud, said consumer education is key to reducing cases of fraud.
"In these economic times, there's only so much law enforcement can do with limited resources," she said. "Consumers can help by protecting themselves."
Bureau rating
The Better Business Bureau, a nonprofit organization that promotes ethical business practices, has given eBay a satisfactory rating. For a company to be rated satisfactory, it must be free from an unusual volume or pattern of complaints and law-enforcement action involving its marketplace conduct.
Dianne Seitl-Vasko, the local bureau's director of mediation and arbitration, said her brother -- a frequent eBay user -- has never had a problem with online fraud. But he experienced eBay's security measures firsthand when he sold an antique pigeon crate from World War II.
"My brother put the item for sale and my nephews started bidding on it, thinking they were doing him a favor," Seitl-Vasko said. "EBay tracked [the bids] and banned them from participating at all for what I think was three months."
Of the 843 eBay complaints the BBB has addressed nationally in the past 36 months, 743 were resolved and 108 were closed as unpursuable.
Davis said consumers should practice caution when spending large amounts of money to buy products offered on Internet auctions.
"It's Russian roulette with your money," she said. "Be prepared to take a loss."
mbixenstine@vindy.com