Deceptive Doings Down Under

One of the reasons why I keep going back to this story is that my crystal ball tells me we will be seeing large eBay seller defaults in the USA after Christmas. Learn from history and if you must shop on eBay, always pay with your credit card.

When eBay's seventh largest Australian seller "ebusiness-supplies" (or EBS) went into receivership in July about 4,000 creditors (mostly eBay buyers) were owed about A$1.7 million. In the face of nationwide consumer outrage and considerable negative media publicity PayPal announced the funding of a special fund to compensate all victims who paid and lost using PayPal.

Three months on, it is now clear that PayPal misled the victims and misled the media - its statements and actions since then prove this beyond doubt. It appears the original announcements were little more than a publicity exercise to promote the purported buyer protection benefits of PayPal - at the expense of thousands of defrauded buyers.

Mid July eBay announced second-quarter profit jumped 22 per cent, with strong growth in its e-commerce sites and its PayPal payments service. PayPal, revenue rose 32 percent to $US602 million. CEO John Dohonoe was quoted

"This was a strong quarter and we are very pleased with the performance of the portfolio, particularly with the growth generated by PayPal"

eBay and PayPal have done incalculable harm to the credibility of their business in Australia. Public perception is not that they are simply incompetent, or micro-managed from the USA but that they are dishonest or "twisted." Mid August, less than a month after revealing PayPal revenue rose 32% in the second quarter eBay announced (bolding is mine)

"PayPal has been working through the process of identifying its customers that have recently been affected by the collapse of EBS International (in liquidation), operating on eBay.com.au as eBusiness Supplies and running the website at www.bestbargains.com.au," it said.

"Customers who have been directly impacted by eBusiness collapse have now all been credited by PayPal to either their PayPal account or credit card."

This statement was more than misleading, it was not true.

Australian investigative TV program ABC's 7.30 Report aired October 2nd. eBay's Daniel Feiler was interviewed and filmed. If you have not seen the video go here, Mr Feiler's wide eyed boyish charm rang false. Arrangements had been made to interview and film a spokesperson from PayPal, however PayPal withdrew from this at the last minute. Miraculously several buyers who had been previously denied refunds, received refunds just days before the program aired. The heavy hand of the PR department can clearly be seen at work on the two stories below.

Debbie Robbins of Queensland had filed a claim for $2025 on three items and completed PayPal's statutory declaration. She was fully reimbursed for two items totaling about $700 but PayPal denied her claim for a spa from EBS for $1325 saying she had missed a June deadline. Debbie posted this in the comments section of this story. (bolding is mine)

I am the Debbie Robins mentioned in your online story and I just want to let you know that PayPal did finally refund me the $1325.00 for the sauna that I purchased last week. It took awhile but it happened at last. Kelly Stevens from PayPal read your article and wanted to be sure that I set the record straight with regard to this developement. Feel free to let her know that I have done so. Thanks again Debbie Robins

Paul Foster of New South Wales also received a miraculous reimbursement of $435 after being told he was not eligible for the EBS special fund as his transaction with EBS was "outside its reporting criteria". Mr Foster made lots of 'noise.' Not only did he complain to both eBay and PayPal, he also lodged a complaint with the Banking and Financial Services Ombudsman.

As Auntie May would say "The squeaky wheel gets the grease."




Y'all come back!







Related articles and Links:

Australian IT News - PayPal to Refund More EBS Victims
-PayPal Silent on eBay Refunds Dispute

That Was The Week That Was

Top blog post for me this week was an excellent and balanced editorial by Ina Steiner at Auctionbytes on the Professional eBay Sellers Alliance position paper released on Tuesday October 1st.

Runner-Up: In Australia the reverberations from the EBS scandal are still rocking eBay and PayPal's credibility. ABC (Australian Broadcasting Corp.) TV's 7.30 Report investigated the EBS Fraud (which left about 3,000 ebay buyers and other creditors owed about $1.68 million) and revealed the inherent flaws in PayPal's Buyer Protection Policy. eBay's Daniel Feiler was interviewed and filmed and arrangements had been made to interview and film a spokesperson from PayPal, however PayPal withdrew from this at the last minute.





Retro Current: This is an archived blog post from Adam Nash That Was The Year That Was 2007, interesting in view of the persistent rumors about eBay wanting to sell StumbleUpon and shopping for more classified sites in Europe.

Secrets and Hot Gossip:

Tech Crunch on the not so secret subject of StumbleUpon being for sale.

Brews News eBay hides sellers from buyers Glitch or planned disruption?

John Lawson's video commentary also on the Pesa position paper.

Blog about PayPal, or how to antagonize your customers just because you can.

Take a break!

Just a nice story from a UK newspaper that has nothing to do with e-commerce or business or the economy. Nice photographs!

Also ran:
An interesting article on shipping from internetretailer.com in view of eBay's determination to increase revenue by forcing sellers into 'free shipping'.


Y'all come back!






Related Articles and Links:

Update EBS Liquidation and Investigation

For victims that have not received the EBS liquidators report, please contact:

SV Partners liquidators
phone: 07 3310 2000
email: ebs@svp.com.au

they will place you on the unsecured creditors list, and at the moment it looks like you may receive around 30% of your money once EBS' assets are sold.

You can also try for a Visa/Mastercard refund. In Australia, as in the USA, MasterCard® and Visa® Card Association rules and regulations govern liability with respect to disputed transactions; which includes a 90 day window of opportunity for chargebacks. In the event that a merchant collapses then the acquirer bank (the bank which issued the credit card) meets its scheme obligations and then gets into line with the rest of the unsecured creditors for whatever it is owed. Contact your bank.


If you paid with PayPal and have been refused a refund, ask again. Ask to speak to a PayPal supervisor, be prepared to argue a lot. You may get a refund, others have! As is usual with eBay a 'wait patiently' announcement was made on the Round Table board on 29th July, and nothing since.

Detective Senior Constable Michelle Cavanagh, a member of the fraud squad at Queensland Police, said she was waiting for information from the liquidator to determine where all the money has gone, and whether anything illegal has taken place. The Queensland Police fraud department had received 16 complaints so far, she said. An investigation is in process but it could be months until the investigation is complete.

Y'all come back!

We're actually not liable for it says eBay

A day late and many dollars short.

Yesterday when I wrote about the demise of #7 eBay Australia seller eBusiness_Supply, (EBS) which is now in receivership, the company was still in good standing on eBay. Their feedback showed 4 recent negatives. As I write today, the business is finally Not A Registered User (NARU) and has accumulated 668 negatives as buyers wake up and smell the yak dung.

eBay and PayPal must have known of the incipient problems with EBS for a month or more. On the Australian boards there are multitudinous posts about non delivery from this seller increasing sharply in volume by the first week in July. With all the publicity on PayPal being the only safe way to pay, many of the posters specifically chose PayPal, only to be SOL for refunds.

Listen to a Tuesday evening Radio Australia broadcast, the transcript provided seems to have some confusion as to exactly who said what but the broadcast is clear.

I have said it many times before (just search PayPal in the blog search) PayPal's Buyer Protection has truck sized loopholes designed purely to protect PayPal not the Buyer.

Right now eBay/PayPal Australia are being squeezed between a rock and a hard place. IT is not going to get any better. Large sums have been spent in advertising promoting PayPal buyer protection and safety. This would have paid off in the long term because a few buyers getting ripped off at one time and 'not qualifying for protection' would not garner any attention at all. This situation with hundreds of victims is very different. Note that PayPal's initial response was .. the auction didn't specify PayPal or, so sad, too bad, we can't reclaim funds from the seller.

Many of the high dollar purchasers bought ATVs, which are not covered because (a) they are vehicles and (b) they were not in Australia at the time of purchase. Almost all buyers were 'unprotected because (c)the terms of the auction itself were in violation - delivery over 20 days from time of payment, and then (d) because of all the negatives the sellers feedback was below permitted levels. Add to that the three different legal agreements pre June 7th, between June 7th and June 17th and after June 17th and you have a mess.

Most of the buyers were lulled into inaction beyond eBay's and PayPal's (different) filing deadlines because they knew they were 'protected'.

Some comments from the discussion boards, which are being deleted almost as fast as they post:

Have to wonder on eBay/PayPal's priorities, when they are more interested in pulling posts, rather than openly communicating with the many people who have lost their hard earned money to this lot and keeping us updated on whats happening..

I am also in dispute with paypal, as i used paypal to pay for my item. But the EBS eBay ad didnt actually have a PayPal option(which is weird), so i logged into PayPal and associated the payment with the eBay auction and thought everything would be ok. But now PayPal are saying cause the auction didnt specify PayPal, i am not entitled to any buyer protection!; so much for trying to do the right thing by using PayPal !

I recently recieved a big 'stuff you' email from Paypal whereby they found in my favour but said they couldn't reclaim funds. I couldn't believe they would be so dishonest and offer $20k protection then wash their hands of the matter so I called them up and asked them to recheck. They admitted the email they sent was in error since the listing I purchased from carried the $20,000 protection logo and I was, therefore, entitled to cover. I am expecting a refund within 24-48h from Paypal. To be eligible you need to have lodged a claim and escalated it within the timeframes Paypal stipulate (I did) so don't listen to the scammer's delaying tactics...lodge a claim NOW and you can always cancel it later.

Make sure you grab a copy of your ad before it disappears off the eBay.com.au site. My purchase has already gone and when doing a search and find for the item, it appears as a eBay.com listing, so PayPal are saying you are not covered by .au protection. Lucky i kept a copy that shows it listed as a eBay.com.au listing.

I ordered my item on June 23rd, 2008. So buyers having problems in May, should have had the opportunity to warn people like me who bought in June. I was checking the listings from eBusiness_supplies and BestBargains.com.au a couple of weeeks before my item was won and everything (including eBAY, feedback score) looked healthy.

The biggest factor that influenced my willingness to purchase on eBAY was the belief that eBAY's new hardline with PayPal Protection (all the adverts).

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Newslinks:

Sydney Morning Herald
AsiaOne, Singapore
The Sheet, AU