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Historical Auction Fraud on eBay Shock

Posted February. 26, 2002 10:16,   


Wall Street Journal reported on the 22nd that U.S. FBI began investigation on a craftwork merchant who had disappeared after receiving 400,000 dollars (around 520 million won) from 100 customers, which is the largest sum in the history of auction on the eBay, which is world largest auction company on the web.

Stuart Richardson (Oakland County, Michigan), a merchant of craftworks, noticed tenderers on the Internet that `those who want to buy craftworks should pay early enough, as this site will be closed from January 4th, 2002` and disappeared on the 17th last month after receiving 400,000 dollars in less than a month.

Tricks of fake auction on the Internet are △ increasing contract price through fake bidders, △ selling cheap goods at a high price after making people trust with reasonable and proper price in the auction, and △ making many successful bidders for one item.

Richardson made use of the second and the third ones.

Richardson, who has been an auction dealer on the eBay since 1997, conducted as an honest and reliable Internet merchant. eBay trusted his site so much as to advertise him a power seller. Hence, people were deceived so easily, thinks FBI.

An official of eBay said, ¡°0.01 percent out of millions of trades in a year turn out to be a fraud. It was hard to disclose this case even with 20 tracking personnel.¡° eBay plans to compensate up to 175 dollars for one case according to the company’s insurance regulations.