• by adam , Shelly Palmer , June 16, 2005

There was a time, not too long ago, when you could post an auction on eBay and have a reasonable expectation that the person buying from you was a vetted member of the eBay community. Much more importantly, there was a time when you had a reasonable expectation that sending money to someone with a bunch of positive feedback was a good idea. You could reasonably expect to receive the merchandise within a reasonable period of time. And, for the most part, the goods would be more or less what you were expecting.

That was then.

Now, there seem to be three categories of vendors on eBay: full-time eBay merchants, normal people, and scum-sucking pigs. Feedback (wonderful, utopian concept that it is) is all but worthless. Hijacking someone's eBay account is child's play. PayPal offers no version of customer service and, truth be told, neither does eBay.

Of my 10 most recent transactions (all purchases), two were scams. And, I'm pretty good at spotting fraudulent auctions. These were sellers with 98 percent positive feedback, and the transactions were under $50 each. I paid via PayPal using buy-it-now and never received the goods. The PayPal system for handling such matters sucks and, as I said earlier, eBay's customer service is even worse. Just how much time will you spend filing and tracking rip-off artists through their pathetic reporting system? Everyone places a different value on their hard-earned money, so I suspect that the answers are as varied as the individuals involved.

That being said, do you have a reasonable expectation that the Mac G5 you are bidding on is going to be shipped to you? How about the Sony Plasma 60-inch monitor? Or, the Sony PSP for $50 to $100 over retail? No, you don't. Now, you might say, "Hey, moron! Why are you bidding on stuff like that on eBay? Don't you know that 95 percent of those auctions are fraudulent - especially the ones that only accept payment via Western Union?" Of course I know. But what about all of the people who don't?

My armchair research has the number of fraudulent auctions on eBay at about 25 percent and the number is growing fast. So the question is: How long can eBay sustain the platform-only business? At some point, using eBay is going to be as dangerous as downloading a file without virus-checking software.

Of course, sellers are having a pretty hard time of it too. Here's a quote from one of my favorite eBay/PayPal e-mails to sellers: "We regret to inform you that you received funds from an account with reports of fraudulent bank account use. In accordance with PayPal's Seller Protection Policy, the following transaction involving unauthorized funds has been reversed." Ouch! Sounds more like PayPal's screw-the-seller policy, than a seller protection policy to me.

Is eBay going to collapse under its own weight? Can something this big and this unregulated evolve into a healthy marketplace? I'd love to hear your thoughts and solutions.