eBay Controversy and Critisms

Controversy and criticisms
eBay has its share of controversy, ranging from its privacy policy (eBay typically turns over user information to law enforcement without a subpoena)[citation needed] to well-publicized seller fraud. eBay claims that their data shows that less than .01% of all transactions result in a confirmed case of fraud. However, eBay states that their stated fraud statistic both undercounts and overcounts fraud.

Fraud
A major fraud-prevention mechanism for eBay users is its feedback system. After every transaction both the buyer and seller have the option of rating each other. They can give a "positive", "negative", or "neutral" rating and leave a comment no longer than 80 characters. So if a buyer has problems, he or she can rate the seller "negative" and leave a comment such as "never received product". Learning the system and examining a seller's feedback history is a buyer's best protection.
Weaknesses of the feedback system include:
Small and large transactions carry the same weight in the feedback summary. It is therefore easy for a dishonest user to initially build up a deceptive positive rating by buying or selling a number of very low value items, such as e-books, recipes, etc., then subsequently switching to fraud.
A user may be reluctant to leave honest feedback out of fear of negative retaliatory feedback (including "negative" in retaliation for "neutral").
Feedback and responses to feedback are allotted only 80 characters each. This can prevent users from being able to fully list valid complaints.
Accounts with good feedback can be hijacked by phishing giving a con artist the appearance of an excellent trading history. This problem is particularly prevalent in certain areas, such as digital cameras.
Although Ebay protects sellers from getting a negative feedback from a deadbeat buyer (once the non-paying bidder case is decided in the seller's favor), they do not offer the same protection for a buyer who gets a deadbeat seller.
When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay account (whether seller, buyer or both) may be suspended if there are too many complaints against the account holder.
Many complaints have been made about eBay's system of dealing with fraud, leading to its being featured on the British consumer rights television program Watchdog. It is also regularly featured in The Daily Mirror's Consumer Awareness page. The complaints are generally that eBay sometimes fails to respond when a claim is made, and since eBay makes its money on commissions from listings and sales may not be in eBay's interest to take action against large sellers.

Frauds that can be committed by sellers include:
Receiving payment and not shipping merchandise
Shipping items other than those described
Giving a deliberately misleading description
Shipping faulty merchandise
Counterfeit or bootleg merchandise
Selling stolen goods
Inflating total bid amounts by bidding on their own auction with "shill" account(s), either the seller under an alternate account or another person in collusion with the seller. Shill bidding is prohibited by eBay and, in at least one high-profile case involving Kenneth Walton (and his accomplices Ken Fetterman and Scott Beach) has been prosecuted by the federal government as criminal fraud.
Frauds committed by buyers include:
PayPal fraud: Filing false shipping damage claim with the shipping company and with PayPal.
Credit card fraud, in the form of both stolen credit cards and fraudulent chargebacks.
Receiving merchandise and claiming otherwise
Returning items other than received
The buyer sends a forged payment-service E-mail which states that the buyer has made a payment to the seller's account. An unsuspecting seller may ship the item before realizing the E-mail was forged.

Other controversial practices of users
Sellers of inexpensive items may benefit from inflating the shipping cost while lowering the starting price for their auctions, because some buyers overlook the shipping cost when calculating the amount they are willing to spend. Since eBay charges their fees based on final sales price without including shipping, this allows sellers to reduce the amount they pay eBay in fees (and also allows buyers to reduce or avoid import fees and sales taxes). This is called "fee avoidance", and is prohibited by eBay policy, as are excessive shipping and handling charges. A danger to the buyer in such cases is that in the event of defective merchandise, the seller may claim to have met his refund obligations by returning only the minimal purchase price and not the shipping costs. Sellers sometimes charge fees for use of PayPal as well. Although this is officially banned by eBay and PayPal and is against some local laws as well as violating merchant agreements with Visa, Mastercard and Discover, eBay does not police for this and will only look at it if the auction is reported. Therefore inexperienced users often wind up paying these illegal and unenforceable fees.

Auction sniping is the process of watching a timed online auction, and placing a winning bid at the last possible moment (often literally seconds before the end of the auction), giving the other bidders no time to outbid the sniper. Some bidders do this manually, and others use online services and software designed for the purpose. While disliked by many eBay users, sniping is not against eBay rules.
Burying shipping charges or undesirable terms in a large amount of text.