April 30, 2003
Sean Caine, 410-576-6357
ISSUES CEASE AND DESIST ORDER
TO INTERNET AUCTION SELLER
Effort Part of Crackdown by 28 States and FTC
General J. Joseph Curran, Jr. announced today that his Consumer
Protection Division has issued a cease and desist order against
a Towson man who defrauded Internet auction buyers. Using the eBay
and Yahoo auction sites, Michael Johnson sold goods that included
pool cues, Pokemon cards and rare record albums to consumers, but
didn't provide the items.
The Division knows of 10 consumers who were defrauded by Johnson,
and who are collectively owed $8,247. Several lost more than $1,000
each. The Division ordered Johnson to repay the consumers, and to
post a $20,000 bond with the Division if he intends to continue
selling goods via the Internet, to protect future consumers who
might buy from him. While he was engaged in the auction transactions,
Johnson lived in a rented room in Towson.
The action against Johnson was part of a crackdown by 28 state attorneys
general and the Federal Trade Commission targeting Internet auction
scams. The crackdown, dubbed Operation Bidder Beware, resulted in
more than 55 criminal and civil cases.
Also part of the crackdown was the settlement announced in January
between the Consumer Protection Division and Michael Rymer of Germantown,
Maryland. Rymer agreed to pay $142,738.85 total in restitution to
82 consumers who purchased notebook computers from him through eBay,
but never got the computers. Rymer also agreed to stop selling goods
over the Internet unless he posts a $20,000 surety bond with the
Division. Rymer was also assessed a $20,000 provisional penalty.
"The nature of Internet auctions creates risk for both buyer
and seller," Curran said. "We continue to urge consumers
to do their homework before they begin bidding."
Curran said that the risk in Internet auctions is that consumers
are dealing with strangers whose identities or locations can be
hard to verify. While consumers are often told to check a seller's
feedback rating on an auction site, that is not a guarantee against
fraud, he said. For example, he said that Michael Rymer had been
selling items satisfactorily on eBay for several years before he
began defrauding customers. In the case of Michael Johnson, however,
consumers might have been concerned by his lack of a positive rating.
Johnson did not have a lengthy history because he would rip off
a few consumers, then set up under a new name.
Curran offered these tips to consumers:
A comprehensive list of the cases brought by the states and the
Federal Trade Commission is available at www.ftc.gov.
Become familiar with the auction site. Find out what protections
the auction site offers buyers. Don't assume one site's rules are
the same as another's.
- Before bidding, find out all you can about the seller. Avoid doing
business with sellers you can't identify, especially those who try
to lure you off the auction site with promises of a better deal.
- If the seller insists on using a particular escrow or online payment
service you've never heard of, check it out. Visit its Web site
and call its customer service line. If there isn't one, or you call
and can't reach someone, don's use that service.
- Protect your privacy. Never provide your Social Security number,
driver's license number, credit card number, or bank account information
until you have checked out the seller and the online payment or
escrow service, if you're using one, to ensure legitimacy.
- Save all transaction information.
- Check out Internet Auctions: A Guide for Buyers and Sellers,
available at http://www.bbb.org
for other tips on how to avoid Internet auction fraud.