Sellers in Germany auction
$310,000 in non existent Goods

Between January 11-18, 2003 a seller, "electronix.shop (90)" ran 88 power auctions on Ebay involving 598 items, totaling 172,805. Euro. In another incident between January 9-20, 2003, "Multimedia-online-shop (92)" ran 160 auctions involving 647 items, totaling 122,960. Euro

Click here for a summary of the Electronix.shop and multimedia-online-shop Auctions.

Victims of the scam are reported to have transferred over $100,000 to the accounts of "Michael Castro" and "Mr. Perez" and Mr. Casto. The bank account however was empty when it was finally seized by the Berlin prosecutor. The Criminal Police in Berlin are investigating the case. It is suspected that Mr. Castro and Mr. Perez were a team. It appears a few early, single auction goods were delivered from multimedia-online, but none of the power auction goods have been received by buyers. The Police in Berlin have issued a reward for the criminals.

Even after it was obvious from the shear volume of items auctioned and from the previous auction activity that the auctions were questionable, Ebay still did not e-mail all effected buyers to hold off on payments until the situation was cleared up. This only allowed more people to transfer money to the scammer's bank accounts before they were closed.

It seems strange that Ebay took no action to notify buyers even after the Berlin Police thought the case was worth investigating. After January 21, there is no more feedback for both the shops. Ebay blocked the ability of buyers to leave negative feedback before the Postbank account was closed on January 24. On January 22 the message board for the victims of the scam went live and still there was no reaction from Ebay.

 "Electronix.shop" registered November 27, 2002 and received his first feedback starting on December 6, 2002 as a buyer of item 1975200051. Of the (90) feebacks he received, 40 were for items purchased. 50 feedbacks were for items he sold, and those were mainly CD's and DVD's that sold for under $20. The single largest item he has sold was for around $500 just before the big scam.

The case for "Multimedia-online-shop was similar. He registered on November 25, 2002. 66% of the positive feedback was for his purchases, and not for sales.

It seems rather negligent on Ebays part to allow people to run so many auctions totaling over $100,000 with no control what so ever. So little control will only continue to invite more of the same scam.

The German system of "Ueberweisung" (direct transfer) makes the purchase of goods in Germany more risky. Since the German system clears faster, it is easier to take more people in on the scam before it breaks. Customers in the United States generally pay with a credit card and the issuer usually covers fraud in such situations. To avoid being scammed Germans should use the COD delivery method available with the Deutsche Post.

This type of fraud is not a new problem to Ebay in Germany:
http://www.nickles.de/c/s/9-0016-170-1.htm
Ebay foruum 

1. Review the seller's feedback from sales, not just transactions. 66% of Multimedia-online-shops positive feedback came from his purchases, not from satisfied customers.
2. Review what the seller has sold with what you want to buy. The vast majority of Electronix.shop's psotivie feedback was for inexpensive single CD's and DVD's. His new PowerAuctions, with multiple items, were frequently for $500+ items.
3. Review the current open auctions of the seller and see if the activity has spiked or seems abnormal. In this case Electronix.shop listed 88 auctions with 598 items in one week, in December he had only 50 feedbacks. Multimedia-online-shop list 160 auctions in 11 days for 647 items with only 30 feedbacks for actual sales. .