All of them argue that, since they handle no physical merchandise or money, they bear no liability in fraudulent transactions. The position obviously makes corporate counsel happy, but the strategy has begun to blow up in their faces. The Federal Trade Commission reports a twentyfold increase in the number of online auction fraud complaints in the past year. As of June, that number was 6,000 and counting. That's a prime ingredient for a PR nightmare.
Auction sites say they're tough on fraud, but the reality is otherwise.
Aside from a few weak efforts, including posting individual member history files that can be stuffed with fake accolades, they've copped out on any kind of prescreening of sellers. Usually the offending seller is kicked off. But he or she can reappear within minutes under a new handle. Both auction houses have in-house investigators, but the overall zeal to bring criminal suits appears slim. This has to change.