Legal Action Reveals eBay’s Secretive & Deceptive Counterfeit Practices

Consumers duped by deceptive eBay claims, policies

January 26, 2016, - Los Angeles, CA – eBay^® would like consumers to believe that eBay is a safe place to buy name-brand goods – but it’s not. Legal action by The Counterfeit Report^®, a popular consumer protection website, illuminates an alarming pattern of facilitating counterfeit product sales, sham policies and disingenuous counterfeit dispute and refund practices.

At issue is eBay’s illusory claim; “We don't allow replicas, counterfeit items, or unauthorized copies to be listed on eBay¹” – However, The Counterfeit Report^® received over 2,000 brand-name counterfeit products from eBay sellers. The Counterfeit Report promptly reported them to eBay, along with the manufacturer’s written counterfeit confirmation, left negative “counterfeit” seller feedback to protect other buyers, and opened a refund claim for each under eBay’s “Money Back Guarantee.”

Still, the counterfeit and fake items remained listed, and some were repeatedly purchased from the same sellers, and even the same listings, up to seven times over a period of months. “Counterfeit” feedback for some counterfeit sellers would just “disappear” from the seller’s profiles. In all cases, eBay directed the return of the confirmed counterfeits to the seller -- a violation of U.S. Postal Regulations, Federal Law and eBay policy³.

In 2015, eBay admitted that the same allegations were true to Business Insider. Specifically, eBay admitted it altered and removed feedback, removed warnings, and allowed counterfeit sellers to remain.  eBay’s promise to work with The Counterfeit Report to combat these practices quickly evaporated as lip service, and now the e-commerce Goliath hired an international law firm to silence The Counterfeit Report’s findings and new claims.

While eBay claims it spends heavily² “as much as $20 million each year on tools to promote trust and safety” – that’s a paltry $0.02 for each of eBay’s reported 800-million yearly listings, on revenues of almost $18 billion and profits of $3 billion.

Legal filings (The Counterfeit Report v. eBay) show a shocking pattern and practices that actually encourage counterfeit sales, allow confirmed counterfeit sellers to remain on eBay and alarmingly, block The Counterfeit Report^® from making test purchases. This policy is endorsed by eBay’s Director of Global Trust Policy, Gary Fullmer, with his written warning to The Counterfeit Report^®, “Do not circumvent these blocks, including using your multiple accounts to do so.”

Equally alarming is eBay’s practice of posting the clever, but fraudulent and misleading message below in the buyer's purchase history that counterfeit product buyers, who have already paid eBay, “don’t have anything to worry about.” In reality, an "eBay Money Back Guarantee” refund is due all the buyers who received a fake, and they may have a lot to worry about if they received a dangerous or deadly counterfeit product.  

Buyers choosing eBay’s “Money Back Guarantee” refund process face a challenging, unethical and illegal process in handling the counterfeits. eBay demands the counterfeit item be returned to the to the seller -- where it can be recycled and sold -- even though mailing or returning counterfeits is a violation of Federal Law, US Postal Regulations and eBay³ policy.

Unrelenting buyers might eventually successfully challenge the eBay’s return demand, albeit a demanding and time consuming process, but have just 3 to 5 days to obtain and provide eBay the manufacturer’s written confirmation that a product is counterfeit, convert it to a .pdf, .jpg or .gif file format, and upload to eBay. Despite the confirmation, eBay will again direct the buyer to return the counterfeit or “to destroy and discard” the counterfeit evidence in order for the investigation to proceed. Clever, but without the counterfeit item, buyers have no evidence for their unresolved eBay claim, credit card refund or counterfeit feedback.

Ultimately, eBay claims absolute authority to decide whether to honor its guarantee, without any objective standard and regardless of the legitimacy of the consumer's claim. eBay has asserted it is a breach of its user agreement to appeal its unilateral decision not to honor its guarantee, regardless of the reason, if any, for eBay's denial of the claim.

Below are just some of the some actual arbitrary and conflicting eBay instructions to buyers of manufacturer confirmed counterfeit or fake products.

• “I understand that you received this item and it is counterfeit. To help us resolve your case, please respond to this email within the next 3 days, by uploading official documentation.”
  
• “The case was placed on hold for 5 days to allow you to provide us the proof to support your claim that the item is counterfeit.”
  
• “I understand that you don't want to destroy the item. Let me explain this further to you. I have noted your request and please be advised that it is your prerogative if you are going to destroy the item however, we need the signed back copy of the declaration with the date on it so that we can issue you a refund.”
  
• “We reviewed the details of the case and we appreciate you for providing us with the declaration stating the item was destroyed. We encourage you to send the item back to the seller using the print return label option on the case details. Please provide a return tracking number.”
  
• “Provide eBay with a declaration confirming the item's destruction or confiscation. This is necessary as it may be illegal to ship this item back.”
  
• “We need you to provide tracking information for the item you're required to return to the seller. We're checking in to remind you that you need to provide information by Oct 08, 2015, otherwise your request will automatically close and you won't receive your refund...”
  
• “We need you to provide us with documentation from a qualified 3rd party showing the current condition of the [counterfeit] item and any potential repair costs."
  
• “This case has been decided in your favor. You must ship the item by either printing an eBay label, or use your own label with tracking information and submit the tracking information in the Resolution Center."As a courtesy, we’re covering your return shipping costs by providing you a prepaid label to return the item. It’s important that you ship the item back in the next 7 days so you can get a refund.”
• “Unfortunately, there was a problem with the PDF document confirmation case id 50959075.pdf, you tried to upload.”
  
• “We've determined that the seller has described the item accurately. Unfortunately, eBay Buyer Protection only covers items received if there was something wrong with them.”.

Purchased counterfeit products include trademarked Apple iPhone^® chargers, Bear Grylls^® Knives, Disney^® Collectables, Monster^® Headphones, Tommy Bahama^® Silk Shirts,  LEGOS^®, Vans^® iPhone 6 cases, over-the-counter (OTC) drugs and many other items.

Even fake products -- products bearing a manufacturer’s trademarked name, but don’t exist in the manufacturer’s product line -- such as the Vans^® iPhone 6 cases below, are pitched in eBay daily direct email solicitations.

eBay would certainly like its profitable ventures to continue, but consumers need to know the truth. eBay allows counterfeit and fake items on its website, shrouded by sham policies and deceptive practices that are misleading, unethical and illegal. Counterfeit product sales destroy jobs, the manufacturer’s reputation, and dupe eBay consumers out of millions of dollars.

What should you do if you receive an eBay counterfeit?

1. Never return the counterfeit item. It is a violation of US Postal Regulations, Federal Law, and the only evidence for your dispute.
2. Notify eBay immediately at (866) 540-3229, and open a refund claim under eBay’s Money Back Guarantee.
3. If eBay doesn’t satisfy your claim, dispute the credit card charge. You have the counterfeit product as proof of your claim, and to support the negative feedback you leave for the seller to protect other consumers.
4. Some cases or arbitrary eBay decisions may require more aggressive action.

Copies of legal documents involved in this case are available upon request to accredited news organizations.

Footnotes

¹ “An online advertiser such as eBay need not cease its advertisements for a kind of goods only because it knows that not all of those goods are authentic. A disclaimer might suffice. But the law prohibits an advertisement that implies that all of the goods offered on a defendant's website are genuine when in fact, as here, a sizeable proportion of them are not.” (Tiffany (NJ) Inc. v. eBay Inc., — F.3d —, 2010 WL 1236315 (2d Cir. Apr. 1, 2010).

² In the eBay claim response AAA Case No. 1-15-0003-9113, eBay counsel asserts eBay (1) “spent as much as $20 million each year on tools to promote trust and safety on its website. (2) established a "Trust and Safety" department, with some 4,000 employees devoted to trust and safety issues, including over 200 who focus exclusively on combating infringement and 70 who work exclusively with law enforcement. (3)  implemented a “fraud engine,” which is principally dedicated to ferreting out illegal listings, including counterfeit listings. (4) maintained and administered the “Verified Rights Owner (`VeRO') Program”—a “notice-and-takedown” system allowing owners of intellectual property rights… to report to eBay any listing offering potentially infringing items, so that eBay could remove such reported listings. Any such rights-holder with a good-faith belief that [a particular listed] item infringed on a copyright or a trademark could report the item to eBay, using a Notice Of Claimed Infringement form or NOCI form.(5) In addition to cancelling particular suspicious transactions, eBay has also suspended from its website "`hundreds of thousands of sellers every year,' tens of thousands of whom were suspected [of] having engaged in infringing conduct."

³ “If a buyer suspects that an item is counterfeit, and there are strong indicators that the item is counterfeit, we don't require the buyer to return the item to the seller.” -- eBay Buyer Protection Policy