The Dark Alleys of an Ebay Scam

This is not my usual type of article. This is the tale of an insidious and well executed eBay scam. The names have (mostly) been changed to protect the victims. If you’ve ever wondered what kind of plots the bad guys get up to on eBay, then read on.

ACT 1 – THE PLAYERS AND THE GAME

SCENE 1 – INTRODUCTIONS

DENISE

“Denise” is a friend of mine who has been selling consistently on eBay for probably over 10 years now. She’s not one of those wholesaler “power-sellers”, but she always seemed to have something on-hand that she could sell. She also made a habit of hitting up garage sales or taking junk off of her friends hands and posting it on eBay to see if it might be worth something to someone.

She was making a pretty good supplementary income. Nothing she could actually live off, but the money did help. In recent years, though, finding sellable items started to become a problem. Without a wholesaler connection or any way to reliably get decent products at low prices, she found herself making less and less money while paying more and more listing fees for one-off household items that didn’t sell.

Looking for a way to salvage the situation, she became aware of the eBay Trading Assistant Program.

Trading Assistants are experienced eBay sellers who sell other people’s items for a fee. If you want to sell items on eBay, but don’t have the time or the experience, you can work with a Trading Assistant near you.

So essentially, Denise applies and becomes listed as an eBay Trading Assistant. This means she uses her good rating and name on eBay to sell items supplied to her by other people at the price that they set. Denise keeps a portion of the sale for herself and passes the rest on to client.

Since Denise had a 100% rating and met the rest of the requirements, she got into the program with no problems.

WAYNE

Very soon after being accepted to the program and listed on the eBay Trading Assistant directory, Denise was contacted by “Wayne Foster”.

Wayne had the opposite problem as Denise. He had pro-level cameras and camera lenses to sell, but no good way to sell them. According to him, his primary method of selling was through his local Cragslist, and he just couldn’t move enough that way. As such he was looking for someone to handle that part of the business for him.

This is the point I was contacted by Denise. She asked me to look over his website and see what I thought. I took a look and I saw a fairly basic website that was possibly constructed in Frontpage or Dreamweaver -a very 1990’s vibe to it. There were indeed photos and listings of the various camera equipment he had -mostly Canon DSLR and their lenses, but some Nikon stuff as well. There was no shopping cart functionality on the website.

Googling the real name of “Wayne” returned nothing untoward at all.

Honestly, at this point my main concern was “where is he getting this camera equipment?” Does he have a connection at a warehouse or dock somewhere? Someone willing to “lose” a pallet of stuff every once in a while for the right price?

Even if it’s all legit, you really can’t come out and ask, since you’re kind of calling them a crook, and if they have some sort of great deal, they’re not going to be forthcoming about the details of the deal, since then someone else might try to do it or get in on it.

So while the website was not professionally developed, and I didn’t know the exact source of the merchandise, this by itself doesn’t mean that someone is a scammer. In fact, the state of the website lent credence to his claims of being internet “un-savvy”. Still, knowing what I know now, I feel a bit bad about telling Denise to go ahead and take on Wayne as a client.

SCENE 2 – SELL SELL SELL

THE PRICE IS RIGHT?

Denise gets her very first listing as a “trial” from Wayne. He supplies the copy he wants in the listing, and gives her all the info such as shipping terms, refund policy, and available images.

I was contacted again by Denise, as she wanted me to reduce the supplied photos to web ready images (normally she would take photos of items with her phone and simply use those). The images from Wayne were merely the stock photos of the cameras taken from either the Canon site or some other reseller. They were actually good enough to use, just not at the preferred size.

I noted that the images were stock images, but this is a fairly common practice on eBay -why take a lousy iPhone photo of your product in the box when there’s already a professional image on the official website? The legality and ethics of using these photos is not in question for now, only that neither I nor Denise were alarmed in any way by the pictures.

What was odd to Denise was that the price of the camera was quite a bit higher than the norm. She was usually very good at researching the product and setting a good price that would actually move the item. Wayne refused to budge on the price, and even refused to auction the items, setting them all to “Buy it Now” status. This meant that there would be no bidding, only a take it or leave it price like any other online store.

She mentioned this to Wayne, but she was overruled. With nothing else to be done, she posted the listing and waited.

THE FIRST CUSTOMER

On the last day of the 7 day listing, the camera was purchased. This was a huge relief, as Denise feared it would reflect badly on her if the camera didn’t sell. Although to be fair, she had no input on the text, images or terms of the listing. It was merely her eBay feedback and rating credentials that were useful to Wayne.

Anyway, another annoyance was now revealed. Wayne was only available once per day. He said he had a job that was not near computers, and so he would be out of contact most of the day. This meant you could only count on receiving communication from Wayne once per day, in the evening.

This presented a minor problem in that Denise was used to having the product in hand, and letting the customer know that the item would now be shipped, taking care to include a shipping confirmation number and tracking link. That was obviously impossible now since she did not have the product in hand, and was forced to wait on Wayne to communicate with her before she could know if the product shipped.

Denise took satisfying the customer very seriously, so this arrangement was pretty stressful for her. All she could do was send Wayne the info and hope he shipped in a timely manner.

Luckily, he contacted her the next day with the shipping details, so she was able to provide the info to the customer. With that weight off of her shoulders, she asked Wayne if there was any way to keep in closer contact than once per day, but he assured her that was the best he could do.

All that was left now was to forward on the money to Wayne, minus her agreed-upon fee.

THE PRICE IS WRONG, COMRADE!

After sending the money to Wayne’s PayPal address. Denise received a terse email from a complete stranger, who was upset that she had kept too much of the money, and that he should have a larger amount sent to him.

Shocked, Denise contacted me again and asked me what I thought. I looked -the name was of eastern European origin (it looked Russian to my untrained U.S. eyes), and the way the email was worded made me think that English was not the first language for this person. However, thinking about this, when English is a second language to someone, sometimes the tone of the message may not be what they intend. Those of you who blog and receive comments from people all over the world will understand this. Perhaps he wasn’t really as upset as the email made it seem?

We discussed it, and instead of responding to him, we thought she should simply forward it on to Wayne and let him deal with it. Whatever deal Wayne had with this person, it had nothing to do with her. If he needed more money, it could come out of Wayne’s cut.

A day later, she received a short message from Wayne claiming that he would take care of it. Apparently he did, and she never heard from the other person again.

SCENE 3 – SPIDER-SENSE TINGLING

FREEZE/BLOCK/HOLD, pt 1

From here, Denise went on to sell two or three of these per month. She would receive the money via Paypal, forward it on to Wayne (minus her fee), then she would send on the shipping details to the customer. Once the product was received, she would get positive feedback from the customer.

Until after one transaction, she attempted to send the money on to Wayne, but she couldn’t. Wayne’s PayPal account had been frozen.

There was nothing to do but contact Wayne and find out how he wanted the money. He didn’t seem alarmed, judging by the tone of his email, but merely instructed her to wait until he had another address for her. He supplied her with a new PayPal address within a day (this time of a woman with a different last name), so Denise sent the money and everything worked fine.

This is another situation where you might be suspicious, but then again, it might not be warranted. I personally know people who have had their PayPal accounts frozen without any discernable reason. This happens to a lot of people and the stories are varied.

In this case, the unwarranted PayPal freezes happen often enough that it doesn’t automatically mean someone is trying to pull something. And having the funds sent to a woman’s PayPal account? It could be his wife or girlfriend, or just his friend or a relative. There’s no way to tell without asking possibly rude/invasive questions.

FREEZE/BLOCK/HOLD, pt 2 -Amy

Paypal Customer Service Rep: “I think this woman is in trouble.”

All seemed well for another month or so, until Denise sold a camera lens to a woman named Amy.

Amy paid immediately after clicking the “Buy it Now” button. Per her normal procedure, Denise waited for the item to arrive and the customer to leave positive feedback before she sent the money on to Wayne.

Except this time, PayPal placed a 30-day hold on the funds Amy had sent to Denise.

This was definitely odd, since normally the funds would be released right away as soon as the customer left positive feedback, per eBay/PayPal’s stated terms.

Denise actually called PayPal this time to ask what the problem was.

After speaking with a PayPal rep and explaining that the rules state the funds should not be held if positive feedback is left, she discovered that the PayPal/eBay structure is not necessarily one cohesive system. What this means is that the PayPal rep couldn’t immediately access the eBay system to see that positive feedback had been left on the transaction.

Denise supplied the login access of her eBay account to the PayPal rep, who then verified that there was indeed positive feedback.

A bit perplexed, the rep looked further at the situation and told Denise “This isn’t anything you did. I think this woman is in trouble.” The rep would not provide any more details than this, but cleared the funds, then Denise was able to send Wayne his money, and keep her fee.

END ACT 1

ACT 2 – LESS MONEY, MO’ PROBLEMS

SCENE 4 – TOM, THE ANGRY CUSTOMER

Wayne: “Maybe give him some extra money.”

Denise continued selling for Wayne, and all went smoothly. Well, as smooth as it had been going anyway.

When “Tom” clicked the “Buy it Now” button on the Nikon camera she had up for sale, things went horribly wrong. After receiving the payment and sending the shipping info off to Wayne, she never heard anything, even after a day.

Tom was wondering when the item would be shipped and when he could expect to receive the tracking number. Denise had nothing. What should she say?

Finally, Wayne contacted her and said his supplier was out of stock on that item, and to refund the customer. Denise explained that this wouldn’t automatically guarantee that she would not receive a negative feedback. She asked Wayne if he had a different camera that he could offer to Tom instead, something to keep him happy.

Wayne didn’t seem very concerned. He suggested that Denise offer Tom some extra money to appease him.

So, as she was waiting for a day to pass in between each of Wayne’s communications, Denise received a furious email from Tom, stating that he either be refunded or he was filing a fraud claim.

Denise had no choice but to fall on the sword, refund Tom and offer him an extra $50 for the inconvenience in the hopes of avoiding a negative feedback. She escaped without receiving the negative, but she did receive an extremely scathing email from Tom denouncing her for selling an item that she didn’t actually have. Denise had no choice but to swallow her pride and accept the email drubbing from Tom.

Even more, the $50 that Denise gave to Tom came directly from her, as Wayne didn’t provide any extra funds to make up for his shortage. She emailed Wayne and informed him that she would be taking $50 extra from the next sale, as this wasn’t her mistake.

He was perfectly fine with it, but at this point she told Wayne that everything he listed from then on had to be in stock, or she would sever the relationship.

By the end of the week there was another sale, and Denise was able to recover her funds.

SCENE 5 – PayWHO??

Denise: “No offense, but I don’t know you.”

Following this, Wayne contacted Denise and told her not to use the current PayPal address, as it was now defunct.

Instead, he gave her the address and name of a new person, “Brian Muller”. He wanted Denise to make out a physical check and mail it to Brian.

Denise was slightly annoyed by this, as instead of an instantaneous transfer, she must now wait for the funds to be deposited into her account, then mail out the check. Not a huge deal, but just one more thing to keep track of.

Or was it?

After a couple of payments, she was contacted by Brian himself via email. He informed Denise that he would no longer be able to cash the checks for Wayne (or “Mr. Foster” as he addressed him), and that she could send them to yet another person.

By now Denise was quite wary, and told Brian honestly that she didn’t know him, and that she would have to hear this from Wayne before she was going to do anything.

That same day, she heard from Wayne, who asked her to please send the check to the new person/address. She did, and kept track of her account to make sure the money came out.

As if this wasn’t enough, she was then contacted again by Wayne, who now could no longer receive checks. He asked Denise to purchase a Green Dot Card for him. He wanted her to load the money onto it and then provide the card information.

“The Green Dot Personalized Card is a prepaid Visa or debit MasterCard Card that you can use anywhere debit MasterCard or Visa debit cards are accepted worldwide.”

Denise actually did this. She felt that she was holding onto Wayne’s money and that she should try to get it to him, so she went to a Walgreens convenience store and purchased a Green Dot card. Then she loaded the requisite amount of money onto the card and sent the information to Wayne.

Immediately Wayne complained that she had bought the wrong type of Green Dot card.

At this point annoyance won out over her feelings of responsibility to Wayne. She told him that he was going to have to come up with another PayPal address or person to send a check to, or she was going to send it once again to Brian, despite his protests.

Miraculously, another name materialized, and Denise sent the money by check, watching her account to verify that the money did indeed get withdrawn from her account. It did.

Denise didn’t hear from Wayne for a while after that.

SCENE 6 – CHARGEBACK ACTION

One morning, Denise woke up as usual. One of the first things she always did was check her phone for any sales during the night.

There were no sales, but as a consolation prize, there were two PayPal transaction chargebacks.

Holy shit.

Anyone who has sold via PayPal or any way where you accept credit does not want to see this sort of thing in their inbox.

PayPal: “A chargeback, also known as a reversal, is when a buyer asks their credit card issuer to reverse a transaction after it has been completed. It is available only to users who make a payment funded by their credit or debit card.”

Checking the details of the chargebacks, Denise could see they were from two users claiming they did not receive the product. Despite the fact that one sale was from a month previous, and the other from two months previous. Unlikely, right?

Denise went to check her records of the eBay sales. One of the names will be familiar…remember Amy, the woman who the PayPal rep suspected was “in trouble”?

Yes, none other then Amy, filing a chargeback for an item that she had received and left positive feedback on!

Armed with the feedback, and more importantly a delivery confirmation number, Denise was able to call PayPal and get that charge removed.

The other one was more problematic. While the user had left her positive feedback not only stating that he received it, but that it was “better than expected” and that he would “tell all his friends about her” -this was the only item for which Wayne had not given her a delivery confirmation number.

Speaking with PayPal, she was told that they would not clear it immediately, but based on the eBay feedback of the user, they would “continue to fight” the chargeback. When Denise asked the PayPal rep if it seemed strange that there were suddenly two chargebacks when she hadn’t sold anything for over a month, the PayPal rep responded that sometimes when people see their credit card statements, they don’t remember what they bought a month ago and they file a chargeback.

It’s always possible, but did not seem likely. Anyway, Denise needed proof of delivery in this case.

She contacted Wayne, outlined the situation and asked him for the delivery confirmation number of that particular sale. She received no response.

Denise kept emailing, and finally Wayne responded with a decided lack of concern:

Wayne: “It seems like the situation has resolved itself. Maybe we should just let this one go.”

After this he suggested that Denise list another item for him. Needless to say, she did not.

ACT 3 – THE CAVALRY

SCENE 7 – THE RETURN OF STEVE

Remember Steve from before? The guy who wanted to get Denise’s take on Wayne and his whole operation?

Well he contacted Denise with some interesting news:

Steve: “Hi Denise. I just wanted to let you know that all the people you’ve been dealing with, including the customers, are all the same person – WAYNE.”

Say what??

It turns out Steve had a very similar experience to Denise, except his angry customer experience didn’t end so well -he ended up receiving a “neutral” rating (which is pretty much as bad as receiving a negative on eBay).

You see, the angry customers were the only customers they had that actually were real. They didn’t receive their cameras or lenses because they didn’t exist. There never were any cameras or other equipment in the first place. The whole thing was fake from the ground up. Denise and Steve had been unwitting pawns.

Except Steve, angered by the neutral rating he had received, began to dig a little deeper into “Wayne”.

In a series of emails he explained how the whole scam worked, and how he gained some information.

SCENE 8 – SCAM ANATOMY 101

So this is essentially how the scam plays out:

1. “Wayne”, armed with a bank of stolen identities, begins the process of scanning the eBay Trading Assistant directory for a suitable mark. It is not known how he acquires the stolen identities.
2. After searching the directories, he makes his initial approach, replete with a website and tales of failed selling on Craigslist.
3. Wayne “gives” them one item to sell as a “trial” just to see if they can sell it. Price is set high to discourage real bidders.
4. The listing goes up, then Wayne comes back and buys the item himself, using one of the many credit cards he has opened up in someone else’s name.
5. The Trade Assistant sends the shipping details to Wayne, which of course he already knows, since he IS the customer.
6. Wayne then sends flowers to the address. He ships an actual physical item in order to get a confirmation number to provide to the Trade Assistant.
7. After the flowers arrive, Wayne returns to the Trade Assistant’s profile and leaves positive feedback.
8. At this point, the eBay Trade Assistant feels safe, and sends him the money, minus their fee.
9. Wayne prepares to do the whole thing over again UNTIL…
10. The Trade Assistant begins to become suspicious, and Wayne decides to move on to a new mark, at which point he initiates as many chargebacks as he thinks he can get away with to put money back on his still-working cards for the next go-round.

Some notes on the scam:

• Remember the website I looked at? Apparently that was a real website, owned by the real Wayne Foster, whose identity and website were stolen by the fake Wayne. This is the only reason I don’t use the actual name the criminal was going by. The actual Wayne now has so much crap attached to his name in the search engines it will probably never go away.
• If you recall earlier, Denise (and Steve as it turns out), had serious reservations about the price of the items. It was in Wayne’s best interest to keep those prices high. This way he “pays himself” more money quicker, and more importantly, it discourages real buyers from clicking on his items.
• As Denise and Steve both discovered, Wayne does not actually have any items, and is willing to ruin the reputations of the TA’s as long as he gets paid.
• When it comes to shipping, Wayne was careful to open up the new credit lines using addresses very close to, but not exact to the real person. He made sure they had the same zip code, and his scam worked fine.
• Going back to check her records, Denise realized that not only did every customer have zero feedback, but all the shipments were marked “Left at door” or some such notation. Nothing was ever signed for. Wayne was careful to pick designated “safe” neighborhoods where the shipping services could leave items at the door and not require a signature.
• Steve told Denise that he was actually called by one of the people whose identity was stolen. He spoke with the man at some length. Apparently he was one of the few people who consistently checked his credit report (gotta stay up on that in this day and age) and he noticed the credit card after a month or so of it being open. From this Steve gathered that all of his customers except the one angry one had been fake.
• Not only that, but Steve had also been hit with the PayPal chargebacks (Wayne’s endgame). It happened after Steve confronted Wayne in an email and demanded that he prove he is who he claimed to be -either to him or to the FBI. He got no response, but the chargebacks appeared within days.
• In his case he had the delivery confirmation numbers, and so they were dismissed. He told Denise that her remaining charge would likely be dismissed, as PayPal doesn’t want people knowing how easy it was for someone to open up fake “verified” accounts in their name, which is what will surely happen should Denise start fighting it and the whole house of cards starts tumbling down.
• Finally, Steve warned Denise to check her credit report, as he saw that a credit card had been opened up in his name without his authorization. Denise did indeed check, and found nothing out of the ordinary.

ACT 4 – CURTAIN CALL

SCENE 9 – WHO’S TO BLAME?

At the beginning of this article, you might remember that I figured at most this guy had some kind of warehouse connection and he might have some hot cameras. Never would I have guessed at what “Wayne” was doing.

How can eBay Trading Assistants vet their customers and prevent these things from happening?

eBay: “Trading Assistants are responsible for ensuring items listed on eBay are legal to sell and that the services they provide are legal.”

Ok that’s cool, but what are some reliable methods to screen out the fraudsters?

It’s probably bad for business to throw in something like “BE PREPARED TO PROVE WHO YOU ARE BEFORE YOU CONTACT ME!” Even if it is warranted.

Steve claims he will only sell local items that he can be sure physically exist from now on. It’s a shame that a scammer comes along and deprives Steve and others of much more potential income because they won’t sell outside of their local area any longer.

So eBay has absolved themselves of any blame in these matters, placing it right back on the TA. What about PayPal? Should they be held responsible for the relative ease in which scammers are able to open verified accounts, get paid from illegally opened credit cards, and yet real people are left holding the bag? As of this date, Denise is still on the hook for the one chargeback she had no delivery confirmation for.

Of course the scammer himself is to blame, but who is he/she? Some shadowy figure in an eastern european country? Some megalomaniacal criminal mastermind still laughing because the eBay scam was only the very tip of the evil plot to destroy the world? Or is he just a bored teenager trying to get extra money so he can finally buy that awesome car and get some girls into said car?

Alas, it is a mystery…

THE WRAP UP

It’s a shame that pretty much every aspect of internet life has to be infiltrated by scammers/spammers/trolls and other ne’er-do-wells, but I guess that’s life in the 21st Century.

You can be sure that as soon as there’s a way to make money, someone has figured out a way to game that system and ruin it for everyone (well, for honest people anyway).

These days, Denise is still an eBay Trading Assistant, but she’s not really advertising it and has essentially gone back to selling the more one-off stuff that doesn’t bring in that much money. That is, when she sells at all. The whole experience has kind of soured her on eBay, which is another shame because I can remember when she used to really enjoy everything about selling on there.

If anything, you’d think eBay would want to do something about it’s reputation. When the members who made it great once upon a time have now lost their enthusiasm, and instead look at eBay with suspicion and trepidation, I suspect a turning point has been reached.

Have any of you had any similar dealings or heard of anything like this going on? Let me know your thoughts in the comments.

Until next time..!