eBay Wire Fraud (not humorous...)

umtrr-author Jun 25, 2021

  1. umtrr-author

    umtrr-author TrainBoard Member

    This is a rather long message and while it is eBay related, I think it's too important for the "More eBay Humor" thread. The net of it is that "if it seems too good to be true, it probably is..." Scammers (not spammers) are selling goods they don't have and then using hacked Paypal accounts to order from a legitimate dealer using shipping information from the eBay listing. The legitimate dealer is out both the product and the money when the sale is charged back.

    Here's the whole story from the Conrail Historical Society... Rudy is himself an author and publisher.

    on Last Week's PSA for CRHS Members & Supporters
    Monday, June 21, 2021

    Dear CRHS Members & Supporters,

    Last week (on June 17th), we sent out an email regarding fraudulent transactions received in the Conrail Shoppe, the online store of The Conrail Historical Society (The CRHS). After receiving emails from several other dealers in the railroad hobby that have been impacted with fraudulent book and model sales in the past few weeks, we have worked with them to compare notes, assess the situation, and report it to the proper authorities. This scam is far more widespread throughout the railroad hobby than we originally anticipated, but the extent has provided a litany of documentation from multiple sources. We therefore have some clarifying remarks and some updates to provide on the situation.

    In summary, the scam works as follows:

    • A legitimate customer (“Mr. Smith”) places an order on eBay for a vastly discounted product. These products are typically listed at over 30 percent off the list price with free shipping and a “Buy It Now” price to make them especially enticing to buyers shopping for a bargain. The account will have been created within the past year and will have very little feedback.
    • The eBay seller (the “scammer”) does not actually have the product in stock. The scammer uses the information from the eBay order to impersonate Mr. Smith and place an order with a merchant – in our case, the Conrail Shoppe – for the same product. The scammer uses a stolen credit card number or a hacked PayPal account for the payment method, and enters a fake phone number, a fake email address, and Mr. Smith’s real name and shipping address for the order.
    • The Conrail Shoppe receives the order from the scammer and ships the product it to Mr. Smith, whose shipping information was included in the order. The scammer receives the shipping confirmation and tracking number from the Conrail Shoppe and adds it to the eBay transaction. Therefore, Mr. Smith receives the actual tracking number for the product he receives a few days later.
    • Meanwhile, the rightful credit card owner discovers that their card number has been stolen and there is a transaction they do not recognize. The card owner issues a chargeback against the Conrail Shoppe for a fraudulent transaction. The scammer is not impacted by this, because they did not include any identifying information in their order with the Conrail Shoppe.
    • Therefore, the scammer receives the payout from the eBay transaction and Mr. Smith receives the product he ordered, but the Conrail Shoppe loses the product that it shipped to Mr. Smith and the money collected from the credit card owner for the order. Mr. Smith has no idea that a fraud has occurred. Since Mr. Smith did not place the order directly with the Conrail Shoppe and the phone number and email were fake, the Conrail Shoppe has no recourse for recovering the product that was shipped. And since the credit card number was stolen, the chargeback is valid, leaving the Conrail Shoppe with no recourse to recover the money collected from the order.
    This scam was discovered due to the fact that one of the “Mr. Smith” purchasers happened to be a member of The Conrail Historical Society. Despite the fact that the phone number and email address provided with the scammer’s order were fake, we had the buyer’s real contact information on our membership roster, so we were able to reach out to him directly and put together the pieces of what happened. This matches the series of events that have occurred to several other major dealers in the railroad book and model industries.

    Unfortunately, it appears that there are two other fraudulent orders that went through the Conrail Shoppe and were shipped before we discovered the scam, so we are expecting to receive chargebacks on those orders, as well. We are looking at a total potential loss of roughly $300 from our chargebacks to date, but there are several other dealers that have been impacted for thousands of dollars in losses.

    Since discovering this fraud on Wednesday, June 16th, we have increased the strength of our fraud filters by increasing the number of data entry mismatches that will flag an order as fraud, and we have voided five more suspicious orders that managed to slip through those filters. In each of these cases, we have attempted to locate and contact the actual buyers and, in one case, the rightful credit card owner to inform them of the situation.

    We have reported this fraud to eBay, PayPal, and the U.S. Postal Inspectors (as it qualifies as mail fraud). We are also working with the other affected dealers and buyers who have agreed to assist to provide evidence of this nationwide (and potentially international) scam to the FBI. Other dealers have reported this widespread fraud to their local authorities and state Attorneys General. The affected dealers are preparing a press release to the major railroad magazines and several national newspapers that should be released in the following week.

    The Conrail Shoppe’s fraud protection has been increased and now forces purchasers to verify the entire billing address with the credit card being used. For any orders that slip through with suspicious data, we will be either voiding the orders entirely or contacting the purchasers directly to confirm their order details. One of the holes in this process is the use of a PayPal account for payment, which does not require address verification. At least one of the fraudulent orders used a hacked PayPal account for payment – for this reason, we have disabled PayPal as a payment method on the Conrail Shoppe until further notice, and we recommend the same course of action to other affected dealers.

    For those of you shopping for railroad products on the internet, there are a few ways you can keep yourselves and your favorite dealers safe from this fraud:

    • If shopping on eBay, check for signs of a fraudulent seller. Is the price “too good to be true”? Is it the account created within the last year? Are there multiple recently released items listed for “Buy It Now” prices that are significantly lower than the retail price for these items? Is there a limited amount of feedback from previous transactions? If the answer to any of these questions is “yes”, this may be a fraudulent seller.
    • If possible, avoid eBay altogether and make your purchase directly through the website of one of your favorite railroad dealers, historical societies, or hobby shops. This is the best way to be 100 percent certain of the identity of the merchant from which you are purchasing. The prices found on the websites of most legitimate dealers are the lowest possible prices due to their volume of purchases and sales, and any lower prices for the same goods on eBay are immediately suspicious. Most legitimate dealers that maintain their own online stores on their websites do not also maintain eBay stores, and individual eBay sellers often do not have the volume of sales to sustain the lower prices found at legitimate dealers.
    • If you DO place an order on eBay, always check the return address on the label. All legitimate dealers will provide a return address for any products they ship. If the return address on your order does not match the eBay seller from which you have purchased your product, please reach out to the dealer directly (NOT to the eBay seller) to confirm the shipment information and determine if a fraudulent transaction has occurred.
    Please spread this information to anyone in the railroad hobby, including booksellers, model dealers, hobby shops, and especially to your friends that may be unknowingly making eBay purchases and contributing to this scam. If anyone feels they have been a part of this scam, either as a dealer or as an unwitting eBay buyer, please reach out to me directly at rudy.garbely@.... By raising awareness within the hobby, we can mitigate the impact to our favorite dealers, hobby stores, and historical societies while the appropriate authorities conduct the necessary investigative work to catch these scammers.

    Rudy Garbely
    CRHS President & Conrail Shoppe Manager

    Copyright © 2021 The Conrail Historical Society, All rights reserved.
  2. Hardcoaler

    Hardcoaler TrainBoard Member

    This sort of twisted criminality makes my head spin. Who thinks up this stuff? Thanks for posting George.
    Last edited: Jun 25, 2021
    Rich_S, badlandnp, BNSF FAN and 2 others like this.
  3. sd90ns

    sd90ns TrainBoard Member

    If people put-in as much effort on a legitimate enterprise as they do coming up with these convoluted schemes . . .

    I buy a lot of stuff off of e-bay but 90% of it is from half-a-dozen or so venders that I have been buying from for years.
    Last edited: Jun 25, 2021
  4. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

  5. Mr. Trainiac

    Mr. Trainiac TrainBoard Member

    This is a pretty advanced scam; especially cunning on their part, but it seems like it is labor-intensive and inefficient too. It relies on too many things going right, like ebay not noticing, the 'real' seller not noticing, pre-stolen credit cards, Paypal; this is some next-level stuff here.

    I wonder who is doing this. Are they targeting just model railroaders? I have never seen this fraud scheme before, so it seems new.

    Have you reported this to ebay? eBay is the key to this scam, so if we can get rid of the ebay scam accounts, we can break the chain. If they can filter and delete fake accounts or improve the application process for new ones, they can help reduce this scam as well.
    BNSF FAN likes this.
  6. MRLdave

    MRLdave TrainBoard Member

    It isn't just model railroading, and it isn't just ebay..........I see a lot of this kind of stuff on Facebook as well.
    BNSF FAN likes this.
  7. sd90ns

    sd90ns TrainBoard Member

    If you send me $500, I can tell you how to avoid these types of scams.
  8. bill pearce

    bill pearce TrainBoard Member

    This is an oft made statement that, while quite true in some cases, is of no aid to anyone or anything. There are people that, for some unknown reason,, want to hit the jackpot on the first visit to the casino of life, and there is no helping t hat. Perhaps there is some physiological fault but if so it is not widely known.

    My inclination is to say t hat we must be all taught in our public schools the law of unintended consequences. As we are in the digital age with no chance of retreat, perhaps we should be inventing ways to trace digital communications so as to fine the perpetrators of these kinds of crimes. In my case, in 2020, I had never less than one hack on my bank account per month. I was getting tired of this, and so was my bank, who had to eat the false charges. Whoever cooked up that regulation was an idiot, there should be a way to find and prosecute the crook. This year I have retreated to using checks when possible, and nhavent been hacked once.

    Internet retail is just one sample of the law of unintended consequences. Sure, we can support our hobby needs for less of our hard earned dollars, but that has been at the least the cause of our unfortunate loss of B&M hobby stores. And our hobby is the worse for that, as it is now a hobby of accumulators, not a hobby of doers. There are but a very few online retailers that supply even the least variety of scratch building supplies. The days of the skilled craftsman is gone, we now live in the day of the accumulator.

    But I must remind myself that the crooks will not be deterred. We have had the death penalty for eons and folks still get murdered. But thank you for the opportunity to vent.
    badlandnp and BNSF FAN like this.
  9. sd90ns

    sd90ns TrainBoard Member

    I once knew a person who had spent some time in prison and he once told me that everybody that he met in prison; all they could talk about boiled down to "how they were eventually going to arrive back in prison" once they were released.
    They all absolutely believed that their having been caught was a fluke of circumstances and that next time they would get away with it and that there absolutely was going to be a next time.

    How about $100?
    badlandnp and BNSF FAN like this.
  10. porkypine52

    porkypine52 TrainBoard Member

    This one of the reasons I'm getting a LITTLE gun-shy of doing any business ONLINE, with any Dealer/Seller I have never dealt with before. Especially FeeBay and Facebook. I'm NOT about to put in a credit/debt card number to somebody I don't know. Money Orders, Cashier's Checks, Personal Checks and CASH work just fine. Credit/Debt card numbers, images, addresses, and Social Security number can found if you know how and where to look. And crooks, thieves and bums are ALWAYS looking for some way to take our HONEST money from us.
    It's not that I don't trust people, but you can trust everybody, but still cut the cards.

    Your money is on the way. Will just take a LITTLE time for the check, from my Nigerian Prince friend, to reach you.
  11. sidney

    sidney TrainBoard Member

    ill tell you who thinks up this stuff DRUG USERS, tweakers, thats the sort of low lifes that do this stuff to fund there drug habbits.
    Hardcoaler likes this.
  12. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

    This past week I am seeing discussion of this scam everywhere. It is really hitting hard, and not just the RR related hobbies.
    badlandnp and Hardcoaler like this.
  13. BigJake

    BigJake TrainBoard Member

    If something seems too good to be true, it probably is, online or not. I deal with reputable online dealers and brick and mortar stores (there are a few here in DFW). Do I miss out on some bargains? Yep. I also miss out on the heartburn from the not-so-bargains.

    The online shopping industry has reduced the margin for brick & mortar stores, so they have to stock less stuff and appeal to more buyers. It is up to us to continue to support them when we can, or they will be gone.
    umtrr-author and Hardcoaler like this.
  14. umtrr-author

    umtrr-author TrainBoard Member

    Yes... I've noticed increased prices from a "click and brick" store (Code Name: Woo woo woo :censored: ) or put another way, decreased discounts.

    We collectively note on "More eBay Humor" just about every day examples of Not So Good Bargains.

    Meanwhile, I recently joined a Facebook buy/sell group to check on an item for a friend (legit, but out of bed price) and guess what, many of them will NOT accept Facebook payments! Hmm, wonder why...
    badlandnp, digimar52 and BoxcabE50 like this.
  15. Run8Racing

    Run8Racing TrainBoard Member

    I do use Ebay here and there, but completely avoid PayPal. They allowed a scam to happen several years ago.
    Supposedly I listed a house for rent at $1,800 a week in New Mexico (never been there !!!). Got several phone messages from a VERY irate realtor calling from front porch of the house. "Where are the keys ???" "Why are there people here ??? Who are they ???" "Where are you ???"
    Talked to the realtor on the phone at his office. He just wanted the $1,800 back or he's reporting me to PayPal. Told him that's fine, I'm reporting it also. He did get his $$$ back, PayPal claimed I owe them now. HA !!!
    After reporting, PayPal would NOT talk to me because I'm not law enforcement or attorney. Got a police report and they refused to talk with local sheriff's office !!!
    PayPal closed my acct. I received 2 paper bills from them, they still didn't want to communicate. Didn't hit my bank acct, doesn't show on credit report, so PayPal can go do several things you won't let me mention here !!!
    This all happened 7-8 years ago, I have heard nothing more. If you owed me $1,800 I would have been at your door several times during that time frame.
    It does suck that there are scammers out there, but it's much worse when PayPal is one of the biggest !!! They are no "pal" of mine !!!
  16. MK

    MK TrainBoard Member

    That's why I would never link my bank account to my PayPal account. Too easy for them to access my money should a situation arise. I can see them taking first and asking questions later!
    Shortround and mtntrainman like this.
  17. Hardcoaler

    Hardcoaler TrainBoard Member

    We're rapidly drawing our PayPal funds down and plan to close out our account as quickly as we can. With eBay having cut ties with PayPal, there's no point in having it. Thankfully the funds are usable on a lot of websites, even American Airlines.
  18. SecretWeapon

    SecretWeapon TrainBoard Member

    PEOPLE SUCK!!!!!!!!!!!!
  19. JMaurer1

    JMaurer1 TrainBoard Member

    Run8: If you have never been to New Mexico, then why were you renting a house there? :rolleyes:
  20. umtrr-author

    umtrr-author TrainBoard Member

    Here's here all week folks! Try the take-out...

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