posted on October 26, 2000 12:05:03 PM new
A related topic, NetCop 101, was a discussion that came to the conclusion that the online auction industry is in dire need of some system of justice designed to raise the level of confidence of the general public that they can buy and sell safely ... and that crime has a punishment.
The need is demonstrated not only by the horror stories of buyers whose stories touch the heart, but by the danger legitimate sellers endure by the willingness of individuals to "take the law into their own hands." Devices such as posse's, neighborhood watch approaches and even individually inflicted 'vigilante' justice are simply a reflection of the greater problem.
Among the agreed upon things is that ebaY alone constitutes one of the largest single marketplaces for goods the world has ever known. Some 19 million individuals exchange goods in this market. This single marketplace alone is, in terms of people involved, on par with some of the world's greatest cities. Yet there isn't a single copy officially assigned to ferreting out crime in this 'city.'
A situation like that is bound to create problems. And that's about all we know -- there are problems. The online auction providers -- private businesses -- are loathe to publish details of all criminal behavior on their sites. Anecdotal information suggests the problems are growing. Public confidence marketplace cannot help but be the casualty.
In broad terms, what we propose is a system of justice online that could inspire confidence by being open and available, technically elegant and ultimately effective in preventing fraud and other forms of crime particular to the online auctions.
The short question is "How is that done?"
Another consideration is what is politically feasible? What will users go along with?
Following are some other questions that should be taken into consideration when pondering that simple query.
The greatest problem, but not the only one we have in attaining this parity is jurisdictional confusion. Traditional law enforcement is based on the location of the crime but in cyberspace, what is the jurisdiction? Can we have a national jurisdiction with a court that encompasses all 50 states, and potentially, by treaty, the balance of the world? -- Sort of a international small claims court for civil matters. What about criminal matters?
Another issue is what freedoms, if any, would we as online users be willing to give up to obtain this increased level of security online?
Currently legitimate sellers already supply online auction houses such as ebaY with verifiable personal information -- primarily the seller's working credit card number. Regardless, fraud persists in part because the information provided is sometimes inaccurate or plainly bogus. This method is simply too flimsy and needs reform. Digital signatures, already provided for in federal law, promise to provide a better solution. Whatever the approach, if justice is to prevail, anonymity is not likely to survive. Why? The cheats and criminals must be able to be identified.
Should each company build their own signature database or should this be a broad effort involving dozens of players across many ecommerce platforms and involving both buyers and sellers?
Could these issues be handled on a state-by-state basis or must they involve the federal government? One might suppose, given the role of money in power in politics today, that the major players might choose a pro-active approach on the federal level as Congress seems hyper-attuned to the interests of moneyed business?
Or conversely, can sellers -- online auction users -- better frame the issues and agendas to their advantage and organize to protect their interests in one or two key state legislatures and work the system in this manner?
Does the industry even have to act? How long can the industry keep the status quo of limited government interference before states -- recall the recent efforts of the auction board in North Carolina -- begin exerting their influence and jurisdiction into the field.
As issues arise in ecommerce generally, does the OAI risk being thrown into this briar patch with other ecommerce players, including states wanting to apply their sales taxes as well as more traditional B==>C concerns of ecommerce players? What are the chances that these groups will end up writing the rules that those who participate in the OAI must comply?
These are all issues in equity and justice and they extend far beyond the simple fraud and a vigilante response in the original thread. It is reasonable to ask if a single thread in a single forum is the way to discuss this within the online auction community.
It may not be but I do have an idea that may make this possible.
The task that I'm asking is for folks to write a fictional view of how a fraud will be handled in 2005. The fraud may be an uncompleted (bogus bid) auction or it may be non-delivery of an item. It might even be your charge that bid manipulation (by either the buyer or seller) was involved in the transaction and you want the transaction voided.
So, who do you report to and what do they do? How is justice served ... or is it served in this 2005 scenario. Writing a brief scenario of how you think it can be accomplished is the trick.
Keep in mind that what is technically possible may not be politically feasible. Still, don't be afraid to dream. As one political operative once told me, "you got to know what you want because if you don't, you can't ask for it."
Let me close by quoting a new column by a lawyer that delved into the issue of ebaY being an auctioneer and therefore subject to suit by collectors under a 1992 California law. Matt Galloway wrote: "The problem remains, however, that e-companies must contend with the plain, albeit outdated, language of statutes such as the auction law in California (and that's what counts in court). There is a lesson here for business operators and legislators: Companies apply new technologies to business models in ways that are often unforeseen by the law. Unless the law is updated, lawyers will find ways to exploit these laws on behalf of, well, themselves and their clients. And while some degree of litigation is inevitable, fast-growing Internet companies should be careful to identify (and work to change) these laws before they face the definition problem. That way, they'll be making their case to the legislature: perhaps not a perfect solution, but better than relying on the whim of a single judge." (Link: http://www.ecompany.com/articles/web/0,1653,8754,00.html)
So what do we as users in the industry want? I think by looking into the future in a fictional way, we might be able to come to some consensus of where we want to be in five years. ... and avoid some of the potholes we're bound to encounter getting there.
Personally, I think whatever system that is, it must be designed to perform the basic pedestrian needs of policing petty crooks as well as gargantuan frauds. The idea is parity with brick and mortar businesses who, with the punch of three buttons (911), a policeman will appear and typically take a pickpocket as well as shotgun totting robbers into custody?
posted on October 26, 2000 03:43:21 PM new
Pat, thanks for a fascinating post. I'll have to give this some thought. You see, my intuition has long told me that MOST of the current problems we see all over the place are NOT things to spend any appreciable R&D on, because due to advances in personal security technology, all sortsa fraudulent activities will simply vanish.
I'll have to see if I can think up HOW what I think is inevitable, will actually play out.
I sure hope that others participate with fictionalized projections of the future, too.
posted on October 26, 2000 04:53:40 PM new
I think that Auction fraud is far less wide spread then this dicussion here would have us believe.
yes there is some fraud out there and the worst of it ends up headline news most of these fraud auctions found and ended before the auction was ever Completed.
I dont know what the world outside the internet thinks really goes here but I been on the net nearly 10 years and one thing I know it is is the world largest fast grape vine.
if its happening out there most of the internet comunity knows about it within mins under an hour from scams to new great free deals.
want to look at an industry that really needs to change look at the tire industry at this moment look at OPEC and the energy industry as a whole right now.
these indutry are big hugh fraud effecting virtually every person in nearly every country in one way or another.
these groups are takeing billions of people for trillions of dollars. in the case of firestone people are dieing.
no one buying at the Online auctions has ever died cause they might have been charged a $1 or so handleing above actual postage or discovered a chip in some peice of 60 year old china they bid on.
WWW.dman-n-company.com
[ edited by dman3 on Oct 26, 2000 05:02 PM ]
posted on October 26, 2000 05:53:44 PM new
There are a number of simple steps that can be taken right now to greatly reduce fraud.
1) Everyone, buyer and seller, must be verified to participate. This can be done with either a credit card (required for sellers) or for buyers, credit card, mailing in a payment for a deposit of say $25 along with proof of identity like a copy of driver's license or utility bill. Account info must match that of proof submitted or cc cardhold address. No duplicate accounts with the same last name or CC at the same address. Only seller can see bidder's email ID. Buyer and seller are sent each other's name and address at close of auction.
2) the buyer is charged the listing and closing fees and only pays the seller the difference. This will greatly reduce deadbeating because there will be a cost to the bidder.
3) The auction site should have at least one person devoted to investigating fraud and abuse, randomly checking auctions for violations and removing unwarranted feedback. Deadbeating, refusing to sell to the winner, non-delivery of items or a number of complaints about the quality of what was shipped are grounds for suspension.
4) Feedback must be left for every transaction. If someone neglects to leave 3 feedbacks after several reminders, they will no longer be allowed to sell/bid until they have done so. Leaving feedback which violates
terms are grounds for suspension.
posted on October 26, 2000 09:16:49 PM new
Gosh, I thought I had email notification on and no one had responded Not so.
Hi Rahd and thanks for understanding the goal of fictionalizing this.
Dman 3: Auction fraud, at least according to those in the government who study online fraud, is the fastest growing area of fraud. It was just this perception that led the North Carolina Board of Auctioneers to suggest that auction sellers in that state were "auctioneers" under that state's law and made an effort to have sellers comply with their state licensing requirements. Heck, when you think of perceptions, think back to the Gulf of Tonkin and how that misperception provided the reason for the US entry into Vietnam in 1964.
Amy: I would suggest that "WE" in this case refers to anyone who wants the good guys to win (and make money) and the crooks, cheats and frauds find that it is no longer a good idea to cheat, steal and defraud. BTW: If it causes you a problem, substitute: "What is proposed" instead of "What we propose" as there is no "We" other than auction users collectively.
Yisgood: Thanks for the post. With the exception of the requirement that people post feedback, my sense of what you're suggesting is quite similar to the Great Collections online auction model. Sellers there are verified (all of them), buyers pay a 'buyers premium' of ten percent (covering at least a portion of the cost of the listing) and, because verification of the authenticity of the goods offered occurs on the front end that is almost like having a cop on duty before the fact. This almost sounds like you think that model of online auction will simply supplant the more freewheeling ebay model in the future.
Pat
spelling error (steal instead of steak)
[ edited by neomax on Oct 26, 2000 09:18 PM ]
Not so.