STE WILLIAMS

A campaigner has gone public with his concerns over an alleged scam on eBay.

The person claimed a group of fraudsters have seemingly found a way around PayPal/eBay’s anti-fraud system through a complex multi-stage scam. eBay says it has the problem in hand, a contention strongly disputed by the campaigner, who said he’d been tracking and reporting the fraud to the firm for months – without a proper clampdown by the online auction house.

The campaigner alleged the “ongoing scam” – which ultimately leaves eBay rather than its users out of pocket – would have “conservatively” cost the auction house tens of thousands of pounds over recent months.

Four stages

The informant went on to describe the scheme he alleges is at play. He claimed “phase one” begins with creating fake eBay and PayPal business accounts using throwaway webmail accounts.

These accounts are then used to sell iPhone cases and leads for three to four months, he claimed. He explains that after months of benign activity, PayPal thinks the trickster is a legit seller and releases the 21-day payment hold, allowing the account-holders instant access to any money they get through sales. eBay also clears the accounts from the shackles of a system (focused on new accounts) that checks for suspicious inventory changes, he claimed.

It’s at this point that the scam kicks in, alleged the campaigner. The fraudsters begin listing items such as electric toothbrushes, power drills and Lego sets. They sell these in batches of 20+, usually around four to five batches per account.

As soon as the funds from the first batch are in, they spend the money in their accounts on iPhones and/or laptops from other legit eBay stores. The fraudsters also buy large quantities of stamps.

They also use techniques to avoid giving away their real location when picking up the goods.

By the time the first buyers who bought the first batch start asking for refunds due to the scammers not responding and the items not being delivered, most, if not all, of the money has already been spent. Scam accounts are abandoned. eBay/Paypal, left unable to retrieve the funds, must dip into its own pocket to refund scores of buyers who have been ripped off.

Dispute resolution

The average scam account makes £1,440 and rips off 99 people, according to the source, who said he’d been following the scam for months.

“Over the past 5 months I’ve not only told eBay about this scam several times but reported the accounts months before they scammed via @askebay on twitter and also reported every listing via the report item link.

“eBay have completely ignored me every time and by doing this from November to Now they have lost over £100,000 and over 7,000 customers have had their time wasted.”

Our informant claimed that after he failed to get eBay to act, he went public with a series of blog posts documenting the alleged scam.

He first approached us over the issue last month, since which we’ve been talking to eBay and passing over a list provided to us of suspect accounts, which the auction house (on investigation) claimed had already raised red flags.

eBay told us it had detected the rogue accounts itself rather than as a result of our reader’s alerts. “Our filters had detected behaviours associated with them that merited account reviews and necessary steps were taken to limit these accounts immediately,” an eBay spokesman told El Reg. The online auction house also offered a generic comment about how it monitors suspected fraudulent abuse on its marketplace.

We have dedicated in-house detection teams and alert systems in place to identify suspicious behaviour.

Our teams share information with law enforcement agencies around the world to keep our marketplace safe for customers.

The campaigner dismissed eBay’s response. “Not counting the ones you [The Register] reported, I’ve never in [six] months seen an account in the active scamming phase get shut down till long after it was abandoned.

“The scammers are still going, albeit in a limited capacity, for the time being,” he claimed. “I’m guessing they are holding off making new accounts for a while but they’ll be back. I can’t see them walking away from at least £20,000 a month,” he added.

He claimed the scammers were also abusing PayPal, incidentally, in furtherance of the scam. El Reg invited PayPal to comment on this and we’ll update this story as and when we hear more.

A third-party infosec expert, who offered an opinion but made it clear they’d rather not be quoted, said that they could see how such a scam would work but commented that it appears the victim in this is eBay as the account-holders who are targeted end up getting their money back. “The main victim is eBay [which] may have estimated the costs of dealing with this level and type of fraud outweigh the costs due to the losses,” our source offered.

The campaigner accepted this point. ®

Article source: http://go.theregister.com/feed/www.theregister.co.uk/2017/04/24/ebay_fraud/