eBay = eFraud

Group members

Harleen Dhah - h_dhah@hotmail.com

Julia Fisher - jfisher@ucalgary.ca

Yuanshan Xu - hazexys@gmail.com

Jessica Voskoboiniknov - jessica_vosk@hotmail.com

Project statement

The topic we chose to do is eBay, an online auction. We will be focusing on the safety aspect of online shopping, and the level of security available for people. eBay allows individual people or businesses to sell any type of products, old or new, which can result in a lot of fraud, false advertising and other type of illegal action. We will be focusing on the following areas: History and overview,fraud and safety, taking action to prevent fraud, and Case studies.

History and Overview

eBay auction - Bid or Buy online!

In 1995, a man named Pierre Omidyar decided to try selling his broken laser pointer online. To his surprise he found a buyer, which was specifically looking for a broken laser pointer, to add to his collection. After this situation, it clicked that he could open up a website which would involve people buying and selling various items, like an auction online. Pierre previously worked with the developing software company for Apple. With his previous knowledge, he developed a code to create what we now know as eBay. EBay is short for echo bay, originating from his personal consulting business. Rapidly the company started to expand, when eventually he joined with Meg Whitman, a Harvard graduate, and expanded the company into various branches. The company became popular around the world, where items were being shipped everyday. When eBay became public in 1998, it was the most used auction website. Now eBay sells, "$10 million worth of equipment and it now lists between 20 and 150 items per day (eBay)," and "there are about 276 million registered eBay users worldwide"(How eBay Started, April 2008).

Advantages and Disadvantages

Advantages

Convenient, can shop 24 hrs a day from your home

No need for vendors, therefore there is no pressure to buy

Goods are often cheaper

You are able to compare product price and features

You can buy products from all over the world and not just from your local area

Disadvantages

You have to pay shipping expenses

You cannot purchase an item you need to use immediately, have to wait til it is shipped.

Loss of retail shopping experience

Privacy and security issues, identity theft  is at risk

Access to the Internet and computer is necessary

Product category risk,  i.e) Perfumes and electronic functions cannot be fully experienced online.

Fraud and Safety

World wide, credit card fraud has been on the rise. Internet usage for shopping online has had a strong correlated relation with that. Internet usage has grown substantially in Canada from 18% in 1994 to 64% in 2003, and still continues to increase. In 2003 Canadians spent over CAD 3.0 billion shopping on the internet the largest concern to the consumers was security of their financial transactions (Stats Canada, 2006). Fraud is the most common identity theft that is present online. Identity theft is a criminal act, where ones personal information-name, birth date, address, credit card number etc.- is stolen and their identity is used to purchase items online, with that individual receiving the credit card bills of the items he/she did not purchase. EBay has less than one percent confirmed fraud cases. How identity theft happens on eBay is that individuals create an auction and then act as a bidder on their own item raising their own bid forcing other bidders to also raise their bid, once the bidder has “won” the individuals takes their money and disappears. Sometimes the individual sends emails to the bidder asking for their password or other personal items-drivers license credit card number etc- to complete the transaction of the payment and once they have that they hack their account and take their identify.

Helpful tips

A Few tips you should follow to avoid Fraud

1.Analyze a seller’s feedback

2.Learn as much as possible about the product and seller.

3. Don’t Buy Expensive Items from New Sellers

4.Understand the retailers' refund and return policies.

5. Read the Auction Description Carefully

6. Make Sure You Are Buying Authentic Products

7. Look for buy SAFE-Bonded Sellers

8. Use a secure checkout and payment process.

9. Never Send Cash, a Money Order, or a Certified Check for an Expensive Item

10. Always Ask Sellers for a Tracking Number or Delivery Confirmation

11. Make Sure You Pay the Correct Seller

12. Safeguard Your Registration Information and Password

Paypal

Secure payments can be made through Pay-pal which is an e-commerce business founded in 1998 and acquired by e-Bay in 2002. Pay-pal allows for a safer way to pay and receive payments both effectively and efficiently online through credit cards and online banking without disclosing financial information. Pay-pal provides a safety network to ensure individual confidentiality.

Taking Action

Since there are so many case of fraud for internet shopping on eBay. Both eBay and us should have some action to help prevent those lost for both consumer and seller.

eBay

According to the news on October 8, 2007, Yahoo!,eBay and PayPal join forces to fight email fraud and phishing scams. This union of Yahoo! eBay and Paypal helps the customer to prevent email based crimes. It is huge steps in phishing scams in internet.

Customers

There are so many way for the cutomer to get away from fraud on eBay.

1)Use vistual Credit Card to purchase online

Visutal Credit Card is a online serive for some bank to help cutomers to shop safe online. This service allows customer to create a temporary credit card number everytime when they are doing online shopping. Customers can specify how long the visual credit card should remind valid and the spending limit for it.This visual credit card number links directly to your actual credit card account; however it keeps the customer's actual credit card number completely private. Now, more and more bank started to have this kind of service to help their customer for protecting their online shopping.

2)Pay by E-Pay

There's another new option that offered by some online merchant and bank which is an elctronic payment system that many people used to deal with their monthly payment. Customers just pay as they are paying for their monthly bill online without telling the online merchants about any information about their account

3)Pay by PayPal

Ebay also offers PayPal to help protecting cutomer's privacy and personal information. PayPal also protect cutomers from fraud on internet shopping

Case studies

There have been many cases over the years of identity fraud and other illegal activities that have happened through purchasing items on eBay. The following are a few case studies outlining some of these cases:

1. A man bought an item on eBay and when he received it, the package said "Amazon" on it. He thought it was odd but didn't think much of it since he paid a very good price, in fact, he went back and bought 12 more packages from the same seller. He was very satisfied with the deal he got, until a U.S. Postal Inspector showed up at his door. It turns out that the seller had been ordering items off Amazon.com with stolen credit cards and then selling these items on eBay in order to turn the items into cash. This case allowed an innocent buyer to be involved in a triangulation scam like this, which can be very unpleasant.

2. In Lancashire, England, a man names John Townsend was arrested and put in jail for 18 months for selling stolen vehicles on eBay. The Vehicles were all stolen by burglars and within days later they were sold on eBay with false documentation. Cars included two mini coopers, an Audi A3, Toyota Landcruiser, and a Nissan Navarro. This is an extreme case of fraud which resulted in harsh consequences for the seller.

3. A woman from Calgary bought a season 2 boxset of Desperate Housewives on eBay for $25, which is half the price of what they are sold for in stores. It seemed like an awesome deal, until she received the dvds and found out that they were all copied and had a warning on the bottom of the screen for the entire time. This is not as extreme as cases 1 and 2, but it is a case of false advertising which can be very frustrating considering she paid $25 and will probably end up paying the full price for an original copy.

Conclusion

Ultimately, ebay has many issues that are nearly impossible to get rid of due to the fact that there are just too many individuals operating it to be able to keep track of. We think that even though this issue is very recognized and has been reduced due to companies like PayPal, it will never fully disappear. Although there are many cases of individuals getting caught for attempting credit card fraud or other types of theft, we think that there are many left that have gotten away with it.