Original URL: http://www.theregister.co.uk/2008/04/24/kewney_efraud_column/

The web rip-offs nobody cares about

Online, no one can hear you cry

By Guy Kewney

Posted in Law, 24th April 2008 10:16 GMT

Column The problem with web crime is "who cares?" It doesn't matter if we're talking about identity theft or credit card fraud, if it's done to you, you may well have to weep alone.

The simple economics of crime make it impossible to show a payback for any individual scam.

Take the simple question of buying something off a web "auction" site. If you bid for it, it's an auction. If you use an "instant purchase" option for the same device with a "buy it now" type button, it ceases to be an auction and the transaction comes under a completely different set of consumer protection laws (remote purchase).

Either way, if you go to the authorities, you'll probably be told it's none of their business. "It is very difficult to get the police to prosecute a case of fraud," concedes E-Victims founder Roland Perry. "Especially if it's not actually clear that a fraud has been committed, or if it's some kind of civil offence."

The result is that an awful lot of e-crime goes unreported. Well, "unreported" technically. In fact, some of it gets reported, but then it vanishes under the surface of a big slough of misery and indifference.

More worryingly, however, there are signs that people don't think it's safe to report it. There's a sense that: "If I complain about a cut-price product, I'll expose myself as someone who buys stuff off the back of a lorry..."

No Deliverance

But some people do complain, and get nowhere. Sample story: Alex, who ordered a product which didn't get delivered. He complained to the vendor, who said: "I gave it to the courier; it's between you and him." Legally, it turns out, this isn't correct, but practically the cure was in the vendor's hands, and the vendor didn't want to know.

You might imagine that if products are faked, the owners of the real thing would see the point of prosecuting. Some, like Burberry and Timberland, do have full-time staff, scanning sites like eBay for vendors and taking what action they can. Others... well, sometimes, it's hard to believe that people can care so little about seeing their own brands being ripped off online.

Take my friend Semimode (an alias) Slope. Slope is a photographer and uses a picture editor - a quality (not to say expensive) product. It was time for him to upgrade, so he went to the supplier's website - only to find that the old option of a simple upgrade to the latest version was no longer available. He had no choice but to pay the full price of the entire suite (a "reassuringly expensive" £1,500 (discounted to a still eye-watering £989.95) or look for discount outlets.

Slope quickly found a vendor on eBay who had a fully-authenticated, hologram-marked, guaranteed registrable and upgradeable version for less than £300. After discussion, and assurances that this was indeed the Real Thing, he took delivery.

The product registered without fuss. Only later when he had a couple of problems did it become apparent that the box was fake, the hologram a replica, the manual a ripoff (excellent quality), and the "registration" was with a completely phoney website.

They took this pretty seriously at the supplier and asked for all the details, which we provided. Then their crime unit moved in, and we waited for the storm.

Four months later, checking vendors on the auction site, the same vendor was offering the same products under the same terms and conditions at the same price.

It's a problem, yes; but fixing it is not cost-effective, it would seem. And when you buy a £20 item and it just never shows up, the admin costs of getting anybody in authority involved are proportionately even more prohibitive. "Nobody cares," in short.

When you do get ripped off, several remedies that worked a year ago may turn out not to work any more. The law on online purchases is: "Use a credit card" - because if the product is not delivered as specified, the credit card will place a charge-back to the retailer, plus a £35 fee. But credit card companies have become wise to this.

Who'd have credited it?

A year ago, if you bought online using Paypal, having charged your Paypal account up first, the credit card supplier would see this as a credit card purchase. Today, more and more of them are getting out of it by claiming that all they provided was "a cash advance".

What's the law on this? "If you get an answer out of the Office of Fair Trading, then you'll do better than we have," said Perry at e-Victims.

There's no sign of things improving. Perry exposed many of the scams which regularly occur on eBay. When in doubt, of course, a big corporation should always shoot the messenger and, right on cue, eBay suspended his account. Yes, Perry did exaggerate the problem, but anybody who works in the crime area will confirm the problem is real.

I have a question for eBay: if you are out to help reduce crime, fencing (dealing in stolen goods), and scams, one thing you could do is accept credit card payments. Why won't you? And why won't you work with consumer-help groups like e-Victims?

I'm not saying this would solve the problem overnight, but I am suggesting that it would help your image a lot if you stopped doing things which are inevitably going to be perceived as crook-friendly. And it's not just eBay - it is probably just the most prominent.

I'm not suggesting anybody is doing anything crooked at any of these "auction" sites. I am saying that they face a real PR problem if they don't make it a lot more obvious that they are aware of the scams and prepared to be whiter than white about how they clamp down on them. ®