On Friday, online auctioneer eBay announced tougher new policies regarding fraud and piracy, including free insurance.
The company has been stung with criticisms of its policies before. eBay lets consumers handle the auctions themselves, and generally has a non-interference policy. But critics charge that the loose rules allow scam artists to rip-off consumers and traffic in pirated or illegal goods.
Last month, eBay dropped an Oklahoma man from the service after discovering that the postal authorities were investigating him for mail fraud. Other complaints have surfaced regarding the auctions of unlicensed software and other goods.
"eBay has zero tolerance for fraud," eBay CEO Meg Whitman, said in a release. "These new upgrades ... are designed to meet the demands of our growing community. While fraud and other trust and safety issues are not new, eBay's solutions are. We have committed and will continue to commit resources to have the most comprehensive programs in order to keep eBay a safe harbor for online person-to-person trading."
The free insurance comes through a partnership with Lloyd's of London. eBay will offer consumers protection for auctions worth up to $US200, subject to a $US25 deductible.
Bye-bye deadbeat bidders
The stricter new policies cover problems ranging from "shill bidding" -- where users make false bids to drive up the price of an auction -- to deadbeat bidders who never pay up. eBay said it will impose 30-day suspensions for first time shill-bidders and eject them from the service for a second offense. Deadbeats will get one warning before the first 30-day suspension.
To try and eliminate fraudulent bidders, eBay is also setting up a "verification" policy, where users can pay $5 to register their name, Social Security number and other personal identification with the service. Those users would then be marked as "Verified eBay user" to other eBay customers.
The company will also put measures in place to help companies watch for pirated or stolen merchandise being auctioned off through the service. The "Legal Buddy" program will allow the owner of a copyright or intellectual property to search the service for contraband and report it to eBay, which will remove illegal or unlicensed auctions from the site.
