Monday, January 30, 2006

Tiffany Sues eBay

In a front page story in yesterday's New York Times (Sunday, Jan. 29, 2006) it was revealed that Tiffany & Company is suing eBay for failing to curb the sale of Tiffany counterfeits. In 2004, Tiffany investigators made 200 purchases of Tiffany merchandise from eBay auctions. They found that three-quarters of the items were counterfeit.

EBay is claiming that they are simply a marketplace, and that they're in no position to determine the genuineness of the products sold on their auction site. A ruling against eBay, or even a settlement from eBay, will greatly impact the future of eBay.

In response, I sent the following letter to the New York Times:

Your piece on Tiffany & Company's suit against eBay [Sunday, Jan. 29, 2006] was timely. Our company, Sherlock Investigations, Inc., regularly buys merchandise on eBay for a well-known company that sells handbags, sunglassess, watches and other accessories. I can safely say that nearly one-hundred per cent of the merchandise we purchase for this company on eBay is counterfeit.

However, eBay is not entirely at fault. When we bid on watches, jewelry, or other high-end mechandise, we often find that it 's impossible to place a winning bid. What happens is that the seller is actually bids against the bidders. Then, the next day, the seller contacts the losing bidders with a concocted story. Either the winning bidder had to pull out for some family emergency, or that the seller just happens to have an identical item in stock. They'll point out the price that the item went for the day before, and then offer it at a slightly lower price.

People who fall for this ploy end up paying a highly inflated price for merchandise that is usually counterfeit in the first place. They get what they deserve because eBay strongly cautions against making deals with sellers outside of eBay. Buyers do so at their own risk.

Another ploy that fraudulent sellers use is that they use numerous email addresses to send in high ratings to themselves. So, checking out other buyer's experience with the sellers is not foolproof.

When our client's purchase non-existing Harley Davidson motorcycles, expensive, but counterfeit Rolexes, and imitation Fender guitars on eBay, we track down the seller and usually get out client's money back. But for the many buyers who contact us about having purchased a fake Chanel or Louis Vuitton handbag for $150, well, they're just out of luck.

The number one rule that eBay shopper's should follow is: don't spend more than you can afford to lose.

Monday, January 23, 2006

More on eBay Fraud

My January 2nd post on eBay fraud continues to receive feedback. Scroll down this page to "eBay Warning" and read the comments.


One person who came into our office last week told us that he bought a knock-off Versace designer handbag when he went to China recently. Upon returning to New York he gave it to his mother. She, of course, thought it was the real thing. However, she didn't like the color, so she went to Versace in New York and exchanged it for another color!

Wednesday, January 11, 2006

Internet Rife with Fraud

(This appeared nationally on Market Wire, January 11, 2006)

Seventy percent of the visitors to Sherlock Investigations' web site use search terms that mention some form of Internet fraud. The majority come from people who have purchased something on eBay and never received the item.

"Most of the high-end brand merchandise such as purses, watches, and other jewelry sold on eBay is counterfeit," according to Skipp Porteous, president of Sherlock Investigations in New York City. "We get calls and email all the time from people who lost $150 or more on eBay auctions. All we can do is tell them that they're lucky they didn't lose any more than that." Investigating anonymous sellers takes a lot of time and effort, so a loss of only $150 is not worth the fee Sherlock Investigations charges.

One of the popular ways eBay fraud is perpetuated is that a seller might offer an item such as a Chanel watch, or a Louis Vuitton bag. No matter how hard one tries, it's impossible to place a winning bid on the item. That's because the seller is bidding against everyone else using an automatic sniping program to get the bid up to astronomical levels.

The next day, the seller contacts some of the losing bidders and concocts a story, such as the winning bidder backed out, or that they have an identical item available for sale. They'll even mention, "You know what the item went for yesterday, so make me a reasonable offer and I'll send it to you."

The rule here is never make a deal with the seller outside of eBay. With eBay, a credit card, or PayPal, you have some amount of protection. Another Porteous eBay rule is, "Never spend more than you can afford to lose."

Then there are people who are taken in by a professional-looking web site from some Wall Street investment firm. They usually know that they're taking a chance, so they'll just invest a couple of thousand dollars. In a month or two, the firm gives them back three thousand. Now, they take the big leap and invest $100,000. Of course, when they go to cash-in, the firm has disappeared.

Fortunately for their clients, Sherlock Investigations recovers thousands of dollars for victims of Internet fraud. "Sometimes we even bring in the FBI," Porteous says.

Monday, January 02, 2006

eBay Warning

Ever wonder why someone always bids higher than you on eBay? Well, if you're contacted by the seller the next day, the seller probably bid against you.
Unscupulous sellers on eBay often bid against you and themselves, guaranteeing that your bid will never be high enough.

The next day they contact you with some concocted story. It could be that the winning bidder backed out, or that they have an identical item that they could sell to you for a special price. Since you already know how much the item went for, you might be tricked into thinking that the item really went for that much, which makes you think that you're getting a good deal.

If you go for this side-deal offer, you'll either get a highly overpriced item, or nothing. Either way, you lose.

Never make side deals with eBay sellers. You have some amount of protection if you make your transactions through eBay.