A recent survey shows that approximately 10 percent of all stamps and covers listed
on eBay are described inaccurately. The worst example occurred in 1999 when a Canadian carpet cleaner offered what he claimed
was a rare United States 24c Inverted Jenny error airmail stamp of 1918. It sold for $35 000. He was not selling the stamp
but an electronic image of it that he lifted from an auction house web site. Other users made the buyer aware of the scam
before money changed hands. The Royal Canadian Mounted Police were asked to investigate, and fraud charges were later filed
against the suspect.
On 12 August, images of two stamps taken from the Stanley Gibbons illustrated
price list on its web site were used to sell other items on eBay. Both stamps are unused examples of early British stamps
that Stanley Gibbons offered on its web site. A 1840 Penny Black from plate 1 was listed by Gibbons as ... example lettered
EA good clear margins and lovely fresh appearance with a certificate of authenticity from the Royal Philatelic Society.
Price: $5070. Using the Gibbons image, the eBay seller described his item as Great Britain 1840 - 1d black - mint VF -
low start - no reservations. Posted 7 August with a minimum bid of $9.99, the item closed five days later at $811, having
attracted 15 bids from 12 bidders. Two of them withdrew their bids, one noting the Gibbons image and the other saying, there
seems to be a serious problem with this item. The second stamp was the 1880 2/- brown described by Gibbons in its price list
as very fine unused ... lettered RF, centred slightly high, nevertheless, an extremely fresh and presentable example of
this rare Victorian issue, Brandon and Diena certificates. Price: $10 140. The eBay seller described the image as 1865
2s brown mint, adding 15 years to the age of the stamp. Like the Penny Black, it started at $9.99 and drew a top bid of
$1526 in 24 bids from nine bidders, only one of whom retracted. Linns queried the seller, asking why the Stanley Gibbons
images were used and whether the seller owned the actual stamps. No reply was received. Richard Purkis, a director of Gibbons,
told Linns that the seller had appropriated at least six images from www.stanleygibbons.com
The survey of eBay descriptions of stamps and covers was conducted 3 August by
postal history dealer Richard Frajola, a high-profile presence on eBays stamp chat board who goes by the username of 1covers.
He is spearheading a petition to get eBay managers to recognize the problem of misleading and fraudulent descriptions and
to do something about it. I believe eBay would be well served to hire category-specific advisors, he said. A set of qualified
advisors, empowered to review complaints and act in a timely fashion, could substantially reduce the percentage of fraudulent
auctions on eBay in the collectible categories.
Ebays rules against interfering with auctions make it difficult for users to alert
other users about practices that appear to be fraudulent. Users who violate those rules face suspension. Most recently, eBay
prohibited the discussion on chat boards of supposed fraudulent listings, shutting down the method used most frequently to
warn users of deception. Ebay frauds and hoaxes have been in the news regularly, leading the Internet auction house to respond
to its stockholders and to the public. According to a CNET report 5 June, eBay chief Executive Meg Whitman told shareholders
at the companys annual meeting that new software was helping the popular auction site make major strides in reducing fraud.
Whitman told shareholders that technology has already helped eBay reduce its fraudulent
sales rate, which she said is at less than one-tenth of 1 percent. Whitman said the softwares ability to spot criminals will
get better as the database of fraudulent sales grows.
Frajola said he believes the actual fraud rate, using a more standard definition
of fraud, is probably significantly higher. Fraud is rampant in the collectible categories on eBay. Some of the frauds being
committed, such as the sale of fakes and forgeries as genuine, cannot be determined using only high-tech solutions. Although
it is sometimes not possible to determine if a listing is accurate, it is often easy to be certain that a listing is fraudulent.
In the stamp category on eBay, which is the area I am most familiar with, I estimate the fraud rate at roughly 10 percent
of all lots listed in the category.
Frajola said eBay listed 121 000 lots 3 August in the stamp category. He sampled
100 lots in each of 10 main subcategories, and he estimates that 12 000 probably involved one of the following forms of fraud:
- Forged stamps being offered as genuine stamps. He said these could - in many instances - be
determined by examination of the electronic images, or scans.
- Faked covers being offered as genuine. This involves covers with stamps substituted or missing,
as well as postmarks faked. This is often evident by examining the scans.
- Manipulated or repaired stamps and covers being offered without description of the manipulation.
And major faults or repairs not mentioned in the description. This is often evident by examining the scans.
- Material being offered as is that is, or should be, known to be something other than as described.
This includes material that has been manipulated by the seller or sellers agent directly, as well as misidentified stamps
and rarities that should be accompanied by a certificate of authenticity before being offered. An example would be an obvious
forgery, or a misidentified stamp or cover, offered as is in an attempt to deceive, Frajola says.
- The sale of postage stamps that are commonly referred to as illegal issues. These are simply
labels that have the appearance of real postage stamps. They were never valid postage in any country that is a member of the
Universal Postal Union. These so-called stamps often bear the names of fictional countries, including supposed Russian republics
or sub republics using various spellings. They are produced to deceive collectors and many appeal to topical collectors because
they depict musicians, actors or other notable celebrities. Frajola feels they should not be placed in the postage stamp category
except as cinderellas or they should be clearly identified as being fantasy labels rather than postage stamps.
Ebays feedback system, in which buyers and sellers leave public ratings expressing
satisfaction or dissatisfaction with transactions, is ineffective in combating deliberate deception according to Frajola.
Victims rarely know that they have been deceived until well after the sale, if ever. As a result, they do not post negative
feedback. Even though most of these types of fraud occur in the normal stamp-collecting marketplace, they are hidden from
public view and can be adequately policed when the perpetrators are exposed. The high visibility of this type of fraud on
eBay, and the fact that eBay has turned a deaf ear to collector complaints, is very frustrating to those who strive for an
honest, viable and open Internet marketplace. In addition, and perhaps more important for long term health of eBay, sellers
of correctly described goods cannot achieve full value because their goods are in direct competition with fraudulently described
According to the CNET report, eBay has 9 million items for sale on any given day
and will likely process $13 billion in gross merchandise sales in 2002. Small percentages could add up to thousands of dollars
wasted on hundreds of fraudulent transactions each day. The company has been working hard to clean up fraud, forging closer
ties with police officials, the US Postal Service, international delivery services and authorities abroad.
Anecdotal evidence suggests that a disproportionate percentage of fraud happens
from sales from sellers in Eastern Europe. Ebay spokesman Kevin Pursglove said that higher-priced items, such as computers
and other electronics goods, have a higher rate of fraud than collectibles such as Pez dispensers and Beanie Babies.
Technology products, ranging from Sun Microsystems servers to Dell Computer laptops
and a variety of smaller electronic gadgets, constitute the largest category of goods sold on eBay.