Scambusters launch website

Scambusters launch website

A group of traders on New Zealand’s largest online auction venue, Trade Me, have launched their own scam prevention website, www.scambusters.co.nz.

The group have been identifying scam auctions on TradeMe for the past year and posting notices on the site’s message boards to warn other traders and to gather enough ‘votes’ on the site’s “Make A Complaint” button to have the scam auctions withdrawn.

As the site grew, the number of scams increased and their voluntary efforts became overly taxing on the individuals. The group posted a message to TradeMe suggesting an IP address block method of Scam Prevention.

“The most frequent scam auctions are posted from Romanian IP addresses,” says Scambuster Alf West, a Queenstown filmmaker. “The Romanians usually list about ten scams each day and up to fifty on a busy night.”

The group claims its solution (see below), aimed at preventing foreign scammers from registering new memberships, would kill 90% of fraudulent auctions overnight.

TradeMe’s founder Sam Morgan responded via the message board in February that, “Posting dodgy auctions on the message board is a good way to make people aware of the problem.” He urged the team to use the complaint button on each auction but stated, “It’s you (sic) message board though, so you can discuss the site issues here openly.”

However, the Scambusters have found themselves at odds with the auction site’s management since then. In the first three days of May, TradeMe banned four of the five core members of the group from posting on the site’s message boards and a further two new recruits a few days after. On the 5th of May, the company launched a new initiative called “Community Watch”, a re-vamped form of “Make a Complaint.”

TradeMe claims that the group was “spamming” the message boards in notifying each scam as an individual message.

“Not true,” counters Scambuster Clive Hill, a Christchurch company director. “One of our members was banned for posting 13 scams, another for a mere four posts and one person for warning of a single scam. The company’s reaction was very heavy-handed. And `Community Watch’ is just a fancy name for a slightly modified feedback form with the word `scam’ removed,” he adds.

“We understand that TradeMe would prefer their site to be seen as a happy place where the sky is always blue. A safe venue for online trading,” says West. “However kiwis are being ripped off by scams on TradeMe regularly and we would like the company to take responsibility for the problem.”

“We’re certainly not anti-TradeMe” he says. “We love the site and between us we’ve clocked up over 3.400 successful trades.”

In response the group have set up their own website which profiles typical scams and provides advice for safe online trading. You can download a free eBook – “The Anatomy of a Scam” and there’s a forum where free and open discussion is encouraged.

“It’s a direct reaction to TradeMe’s silly attitude,” says West. “Silencing the messengers has done nothing to reduce the problem. The Romanians are still posting scams and attracting victims. We believe that by sanitising their site of the ‘S-word’ TradeMe management is doing its members a grave disservice. We sincerely hope that they’ll use some common sense and rethink their position. ”

* Technical info – the Scambuster’s solution IP Lookup (TradeMe already records this info – see their terms & conditions) combined with a lockout of the Romanian IP blocks (public information) and compulsory Address Verification for overseas sellers.

Possible Story angles They’re an unusual group of people who have never met in person – only via cyberspace. There’s a company director from Christchurch, a Queenstown web developer, the CEO of a community organisation from Auckland, a management consultant from Kapiti, a housewife from Oamaru and a real estate agent from Lower Hutt. And around fifty others who have volunteered to help.

The Auctioneers’ Act is being amended at present. TradeMe claim that they’re exempt from the act as they’re merely providing a “venue” for online trading. Will that change with the revised Act?

IP Lookup – how reliable is it in this case? Can determined scammers ever be locked out of a site completely? And just how clever are the Romanian scammers anyway?

Banning your critics is an unusual management technique not often seen in New Zealand. Will it ever be widely adopted? Could many companies get away with it?

The Scambusters warned TradeMe about a large-scale local scam (see ‘Shakma Scam’ info on the website) while it was still running. The company decided there was nothing wrong and allowed sixty auctions to run to completion. The fraudster got away with $20,000 and promptly fled the country. Should the company share any responsibility for the loss?

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