Online Auctioning - Security

Security and Fraudulency

Security and fraudulency are two growing concerns associated with the buying and selling of products on online auctioning sites.

Fraudulency occurs when items for sale often turn out to be fakes or knock-offs of the original pieces. Due to the nature of the exchange, that is the inability to physically touch, hold or observe the item, there is no secure way to ensure that all products and services being bid for are genuine, especially with concern to counterfeit products that are identical to the original merchandise. This has been a recent issue with eBay as Tiffany jewellery was sold at retail price claiming to be original, however were later found to be inferior copies (Ebay inc., 2004), resulting in a law suit against eBay. This is also commonly termed the ‘lemons problem’, whereby quality becomes an issue when using online auctioning to buy (Lawson, 2002). Despite rules and regulations that have been put in place, all items sold cannot be monitored and policed (Tunick, 2004) and thus allow for error within the description of the item and consequently the relationship between buyer and seller.

Security is also a concern with online auctioning sites such as eBay and uBid as although every effort to maintain discretion amongst the exchange is taken, the Internet is still not completely secure. PayPal, the leading online payment company (Conhaim, 2004) has teamed up with eBay to help make the exchange more secure, however recent outages in early October have made members question the credibility of the security of the transactions and personal information stored on the website, despite assurances (eWeek, 2004).

Due to the nature of the relationship being electronic, most news items and updates are sent through electronic email. In 2002 uBid suffered a loss of credibility when bogus uBid representatives sent out emails asking all members for personal information, including passwords and user names (Katt, 2002). UBid handled the hoax personally however it reinforces the several security issues that arise through the use of online auctioning sites.

Further concern with security is illegal products that may be sold on eBay and other online auctioning sites, such as the seizure of several illegal ivory being posted, between 1995 and 2002 (Clayton, 2004). Some fear that online auctioning is opening up new ways for criminals to conduct business (Temple, 2004), compromising the security that is enjoyed by traditional methods of shopping.

References

• Clayton, M. 2004. "Online, an elephant size problem". Christian Science Monitor, October 14th 2004: 13. (Accessed 20th October 2004 from Proquest Database).

• Conhaim, W.W. 2004. "Where buyer meets seller". Information Today, 21(5), 29-31. (Retrieved August 3, 2004, from Proquest database)

• EBay Inc. 2004. "Retail Brief". Wall Street Journal (Eastern Edition), p. A.10, 1. (Retrieved Aug 5th, 2004 from Proquest database.)

• EWeek, 2004. "eBay repairs PayPal outage; Online marketplace eBay's PayPal payment service was back up last week after five days of intermittent outages". 21 (42):18. (Accessed 20th October 2004 from Proquest Database).

• Katt, S. F. 2002. Scammers make bid for uBid passwords; Bid for attention. eWeek, 19 (31): 50. (Accessed 15th October 2004 from Proquest Database).

• Lawson, C.L. 2002. "Product quality in electronic commerce. An old problem re-cast". Mid-American Journal of Business, 17(1), 23-31. (Accessed August 3, 2003 from Proquest database.)

• Tunick, B. E. 2004. "Phony goods on ebay? Not its problem! Courts haven’t decided, but investors believe online auctioneer can’t be policed". The Investors Dealers’ Digest: IDD, October 11 2004: 1. (Accessed 19th October 2004 from Proquest Database).

• Temple, J. 2004. "Organized shoplifting bleeds the industry, costing customers about $30 billion". Knight Ridder Tribune Business News, October 17th 2004: 1. (Accessed 23rd October 2004 from Proquest Database).

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Angela Klein 21:28, 27 Oct 2004 (EST)