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April 30, 2003
Gregoire, FTC Announce Online Auction Fraud Sweep

Washington, D.C. - April 30, 2003 - Attorney General Christine Gregoire and Federal Trade Commission consumer protection chief Howard Beales today announced a nationwide enforcement sweep targeting fraudulent online auction sellers.

In the sweep, 27 states announced the filing or settling of about 65 cases, and the FTC announced the filing of four cases of its own.

In most cases, Beales and Gregoire said, victims complained they received merchandise that wasn't of advertised quality or they never received the merchandise they paid for.

Gregoire noted that about 32 million people a month visit various online auction sites, and as many as 42 million items a month are offered for sale on one of the Internet's most popular sites.

She cautioned that law enforcement can't be the sole source of protection for consumers.
"If fraud was involved in just one percent of auction sales, there would be 420,000 new victims. That's more than 10 times the number of larcenies reported in the city of Los Angeles in all of 2002," Gregoire said.

"Law enforcement will do what it can, and responsible auction sites are trying to police their own market," she said. "But the single most powerful tool to protect consumers is education."

She said consumers shouldn't be afraid to browse these new and exciting global marketplaces, but they should be well-informed and take extra steps to protect themselves.

Though few of the cases announced today deal with significant monetary losses, they represent the common types of fraud found with online auctions, Gregoire said.

Gregoire, co-convenor of the National Association of Attorneys General's Internet Committee, said a recent FBI report indicates that about 22,000 complaints related to auction fraud were referred to prosecutors last year, a 7.7 percent increase from the year before. For its part, attorneys in Gregoire's High-Tech Unit announced the settlement of one case and the filing of two new cases in the sweep.

Gregoire said state attorneys reached settlement with an Olympia man who was accused of violating the state's Consumer Protection Act by selling baseball collectors cards over the Internet that failed to live up to their promise of vintage quality - if they were ever delivered at all.

Jon Hudson agreed to make restitution to as many as 80 consumers who said they were dissatisfied with their purchase. He also agreed to pay $3,000 in civil penalties and attorneys fees amounting to $3,599.

In one auction, Hudson claimed his collections were "absolutely LOADED with vintage" cards, from 1940s, 1950s, 1960s and 1970s. However, most of the cards were manufactured in the 1980s and 1990s, and are not considered vintage.

The Attorney General's Office also filed a consumer protection lawsuit against Bothell resident Kenan Erden, who offered game consoles for sale on eBay and Ubid. In many cases, he received payment from successful bidders, but then failed to deliver the goods.

The Attorney General's office received a total of 17 complaints about Erden and the total amount lost to consumers is estimated to be about $5,000.

Gregoire also announced a case against Cheney resident Kevin Harper, accused of failing to deliver boxed DVD sets of popular television programs such as Star Trek, The Next Generation and the X-Files to purchasers.

The Attorney General's Office has received complaints from 15 consumers, all of whom paid Harper between $50 and $82 for the DVDs, but who have received nothing in return.


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