Web Fraud Stings Couple
By MICHAEL SASSO
LITHIA -
An avid motorcyclist, Dan Holmes couldn't believe his luck when he spotted a
2001 Honda Gold Wing, in shimmering burgundy and emblazoned with eagles,
selling for $5,000 on eBay.
At that price the cycle was a bargain - about $7,000 below market value.
Holmes' initial excitement soon turned to heartbreak and chagrin. After
wiring $2,000 to the seller as a down payment, Holmes discovered he had been
taken by an impostor in Bulgaria posing as a legitimate eBay vendor.
Such schemes remain relatively uncommon but are growing as more people buy
online and scammers become more technologically savvy, said Jeff Matsuura,
who heads the law and technology program at the University of Dayton law
school.
Holmes and his wife, Julie, a retired Hillsborough County sheriff's deputy
and emergency services dispatcher, respectively, can't believe they were
duped.
``We've never run into anything like this,'' said Julie, a veteran eBay
user.
Americans have become wise to Nigerian e-mail scams, which ask recipients
for bank account numbers in return for a share of millions of dollars. The
latest online scam, the ``phishing'' scheme, which Holmes fell for, combines
e-mail and e-commerce fraud with identity theft.
Similar schemes have targeted the Web sites of Discover Card, EarthLink and
other online businesses, but online auction sites such as eBay's are the
most popular targets, according to the Internet Fraud Watch, a service of
the National Consumers League.
How It Works
The scam works like this:
* Target the eBay vendor. Scammers often send e-mail to auction vendors that
appears to be official communication from eBay. These ``spoof'' e- mails
typically ask vendors to update their account information, including their
eBay password.
* Next, steal the vendor's identity. Once scammers have a vendor's password,
they can log into the seller's account and post items for sale on eBay under
the vendor's name.
* Finally, move the fraudulent transaction off eBay and seal the deal.
Alicia Drummond of Holiday, known on eBay by the user name ``Laurenkids,''
is among eBay vendors affected by the scam.
She was floored when she discovered someone was selling a motorcycle under
her name a few weeks ago. Drummond sells children's clothing and bathroom
accessories, not motorcycles, she said. About 20 people placed bids on the
bike, she said.
``What in the world is this?'' she thought. ``Right away, I e-mailed every
person who bid on it and said, `This isn't my listing! Don't bid on this!'
''
Drummond hasn't determined who stole her eBay identity, she said.
Outside The Site
Hani Durzy, an eBay spokesman, said a scammer may ask the customer to
negotiate directly instead of through the Web site. Often, the scammer will
ask the customer to wire money instead of using credit cards or eBay's
online payment system, Paypal.
Wiring money affords the customer no protection against fraud, whereas
credit cards, for example, typically limit liability, Durzy said.
The Holmeses, who live in Lithia, provide a textbook case on the phishing
scheme.
After spotting the Honda Gold Wing on eBay, the couple and the scammer began
communicating by e-mail outside the site, Julie Holmes said. Initially, the
couple was suspicious because the seller wanted them to wire $5,000 to
Bulgaria via Western Union. When they asked why he and the bike were in that
country, the seller said he was an American soldier stationed there named
Timothy Bergeron.
The couple decided his story was plausible and agreed to wire him $2,000 up
front and the other $3,000 when they received the Gold Wing. The scammer
told them he would ship the bike on Lufthansa's cargo airline, but once the
Holmeses wired him the money, they never heard back from him.
The couple has filed a complaint with the Internet Fraud Complaint Center, a
partnership of the FBI and the National White Collar Crime Center, which
said it would investigate.
Nothing has come of the investigation yet, and eBay has denied
responsibility in the matter, Julie Holmes said. Because she got a cash
advance from her Visa card to pay for the $2,000 money transfer, she hopes
Visa will help compensate her, she said.
Fraud's Ripples
It is unclear how many other eBay users have fallen for the scheme, but it
is serious enough that an Internet chat room for eBay vendors was abuzz with
talk of scams this week. Matsuura, the University of Dayton law professor,
said the scam likely got its name from the way scammers fish around for
personal information.
Durzy said 1/100th of 1 percent of eBay transactions are fraudulent.
Internet Fraud Watch reports that online auction fraud generates 90 percent
of Internet fraud cases. In 2002, the latest year for which statistics are
available, consumers lost about $14.6 million in all forms of online fraud,
Internet Fraud Watch reports.
Matsuura said he doesn't think online fraud is undermining consumer
confidence in doing business on the Internet. ``But if the problem gets
bigger and is widely understood, it will have an adverse effect,'' he said.
Reporter Michael Sasso can be reached at (813) 259- 7865.