N.Y. agency probes Web auctioneers for fraud
By Nicole Volpe
NEW YORK, Jan 27 (Reuters) - A New York City agency investigating eBay Inc. (EBAY.O), believes the Internet auctioneer may have been aware fake goods were being sold on its Web site, a source familiar with the investigation said on Wednesday.
The New York City Department of Consumer Affairs confirmed Wednesday it is investigating eBay which connects individual buyers and sellers of collectibles online, due to complaints that fake sports memorabilia was sold on the site.
The eBay investigation is part of a general probe into fraud at online auctioneers, including eBay, the agency said.
A spokeswoman for the Department of Consumer Affairs declined to comment on the status of the probe other than to confirm that the agency was looking into complaints it had received about eBay and another online auction site.
''We are definitely looking into auctioneers,'' said spokeswoman Shonna Keogan.
She declined to comment on the identity of the second site under scrutiny, but said the department was not currently looking into uBid Inc. (UBID.O) or OnSale Inc. (ONSL.O).
''We have received several complaints on eBay involving sports memorabilia,'' said Keogan. ''The complaints involve fake autographs, and fake autographed balls.'' She said no charges had been filed to date.
A source said the department is seeking to hold eBay liable if a case against the San Jose, Calif. company is opened, adding the department had reason to believe eBay was aware of the fraudulent goods.
The probe, reported Monday by the New York Post, came to light two weeks after eBay said it was increasing efforts to combat online fraud. The investigation underlines concerns over whether the Internet is a safe place to do business.
EBay said it was aware of the investigation. It contended that it was not legally liable for the actions of users of its Web site.
''They (the investigators) are trying to understand whether there were fraudulent transactions on our site,'' eBay Chief Executive Meg Whitman said in a phone interview. ''We bear no legal liability, but we are focused on our responsibility.''
EBay, which sells everything from Furbies to Elvis memorabilia, is among the fastest growing online commerce sites.
In December, a published report said eBay had suspended a user who was under investigation by Oklahoma regional postal inspector's office for allegedly conning users out of at least $30,000 by getting them to send money orders for items that were never delivered, it was reported in December.
22:08 01-27-99
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