Preventing internet fraud.

  • From: Steve Baker <ice@xxxxxxxxxxxxxxxxx>
  • To: technocracy@xxxxxxxxxxxxxxxxx
  • Date: Thu, 7 Sep 2000 23:53:07 -0500

  On one of the forums I frequent, someone reported that he and 30 other
people had been robbed of upwards of $3000 (combined) by one person running
a Yahoo! auction scam (paid through Pay-Pal).  At this point in time the
victems are not getting any satisfaction from either Yahoo! or Pay-Pal in
identifying the culprit. It's all too distressingly easy to gain peoples
trust and their money.

  Knowing that the same thing could easily happen with the Textbook
exchange, I've been thinking about how one might minimize the risk of fraud
with some sort of automated service.  Thus far, I haven't had any good
ideas.  About the only ways I can see that would work is to have time
delayed payments via a middle man i.e. the buyer gets the cash, which the
seller gave to the middle man, 30 days after the point of sale unless there
is a problem. The other way would be to require that the seller provide a
valid credit card, which is charged the same amount as the buyer.  The buyer
gets the contact information off the sellers credit card and can make sure
everything is legit.  When the transaction happens the seller gets the
buyers money immediately.  If after a certain amount of time, the seller is
given their money back.  In lieu of perhaps of getting a credit card from
the seller, money can be deposited into an account (ala E*Trade) which
cannot be withdrawn before 30 days from the last trade, which can be used to
re-inburse the buyer in the event of fraud.

  Of course those two options require a site with a lot of backend and
support personel.  I wonder what existing services a fly-by-night exchange
service like Textbook exchange could use or recommend to avoid fraud.  Any

                                                                - Steve

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