eBay: Racketeer Influenced and Corrupt Organization (RICO)


I’m actually kind of shocked.

And, I’m often the guy rolling his eyes over people being petty and entitled over some business transaction. I don’t think that’s the case here.

Back in June, I decided to sell some items on eBay, not having any success with Craig’s List up here in the mountains. I’ve sold tens of thousands worth of stuff on Craig’s over the years: two RVs, many iPhones and iPads, appliances, computers, monitors…wheels and tires…all sorts of stuff. Very easy, never a problem, cash transactions in person.

I had only ever used eBay once, about 15 years ago, when I bought an enterprise-level server for the office.

So, I listed about 6 items and 5 of them sold without a hitch. One of them, a 16-gig unlocked iPhone 6, was problematic.

  1. The “buyer” who won the auction for $232.50 had opened their eBay account that very day and by the time I looked at the transaction, their account had been “deregistered” by eBay. So, there was no way to request payment or contact the buyer….
  2. So I relisted the phone and it was won in the auction for $211.50. The buyer paid promptly via PayPal and I shipped out the phone in a box, wrapped in several layers of bubble wrap.
  3. Several DAYS later, I get a message from the buyer saying that the screen is “loose” on one of the corners. I tell him I know nothing about it, that it was in perfect condition when I shipped it (it had always been in a case, didn’t even have a scratch). He wants to return it for a refund. I say I have no way of knowing that he didn’t damage it and wants me to take responsibility.
  4. He opens up a case with eBay and long story short, I tell them the phone was fine when I shipped it, he didn’t complain until several days after receiving it, and there’s no way of knowing whether he’s the one who damaged it. They simply unilaterally decide in his favor and simply go in and take $221.25 from my bank account via PayPal—so it’s the purchase amount, plus shipping to “return” the item.
  5. That was two weeks ago, the phone has not been shipped back, I have no tracking information and the “buyer” is unresponsive, as is eBay, considering the matter “closed.” I’ve actually talked to eBay and they say “nope, the buyer is not required to return the item and we have notified him he’s not required to return the item.”
  6. Now, here’s where it gets even more “interesting.” eBay sent me an invoice for $95 for their “Final Value Fee” and then simply took it from my bank account via PayPal, which, of course, is owned by eBay.
  7. Guess what’s included on that invoice? $23.25 for the first auction where the buyer didn’t pay and eBay had closed their account anyway. Plus, it’s shown as being “relisted,” so obviously it was not a completed transaction. Guess what else? ANOTHER $21.15 “Final Value Fee” for the exact same relisted phone that eBay forced a refund on.

So, in total, I’m out:

  • My iPhone—worth between $200 – $250—stolen, aided directly by the criminals at eBay through their criminal accomplices, PayPal
  • $10 in bogus shipping charges for not actually shipping the phone
  • $44.40 in bogus commissions to the criminals at eBay

Obviously, I’ll never transact with eBay again. I’ve never had a problem with PayPal over many years of convenient use, but it sticks in my craw that PayPal is owned by a larcenous racket like eBay.

…By contrast, some little doohickey I ordered via Amazon a month ago for a total of $15, never showed up and apparently, the 3rd party seller skipped. Of course, Amazon covered it in full immediately, on the spot.


Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More


  1. pzo on August 17, 2017 at 15:18

    eBay sold PayPal something like two years ago.

    Yup, they ALWAYS take the buyer’s side. They get your money, and the dishonest buyer gets his phone. There’s the real problem, the buyer.

    I’ve bought and sold on eBay since maybe 2000. The only problem I ever had was getting paid for a printer I sold. They have some serious roadblocks to the seller being paid due to the high number of complaints on printers and other items. I did get paid once the buyer left positive feedback. All despite a 100% rating for years.

  2. Justin Watts on August 17, 2017 at 20:32

    It’s utter crap that PayPal can take money from an account. They aren’t a bank, so they don’t have to operate under the same guidelines as one. I have a bank account just for PayPal transactions; anything received is immediately transferred out so it always carries a $0 balance. This prevents them taking money from me without asking.

    I set my auctions to block anyone outside of the lower 48 states, and those with less than (I think) 10 feedback. I require immediate PayPal payment – if you don’t, a scam is to win but never pay, forcing you to open an unpaid item investigation and locking the listing up for over a week before you can relist. I take a picture of the item in the shipping box right before I seal it up as proof of actual condition. And I always ship UPS with insurance (never USPS, their insurance is shit and never pays out). I put a clause in my listing that the buyer is required to keep shipping boxes in the event of an insurance claim, and if they pitch it I’m not required to refund since UPS can’t inspect it and their screwup killed my insurance claim. I’ve had that save my bacon more than once.

    It’s a complete joke that a person has to go through that much effort to sell on eBay. Even with all that effort there will be a scam that will eventually screw me.

    Maybe you can start an eBaytard group and effect some change 🙂

  3. Bret on August 18, 2017 at 03:03

    Thank you for sharing. I used eBay often in the past to buy (just sold a handful of things), but have been using Amazon almost exclusively for years.

    Sounds very much like eBay is reeling from its weakened position in the marketplace and is making the wrong decisions.

    The customer (buyer) is not always right.

  4. John on August 18, 2017 at 06:22

    I bought a mattress from Amazon a couple of months ago and it arrived with a couple of large black stains on it. They have a 30 day “trial period” on mattresses. I contacted them immediately to ask about the return policy, because while I would like one without stains, I hadn’t slept on the mattress and was not yet sure if I’d like to exchange or return the mattress.

    They immediately said returning mattresses is not viable given their size – and explained they’d simply refund my purchase, and told me I could “keep, donate, or dispose” of the mattress. Incredible!

    • pzo on August 18, 2017 at 07:53

      I read in the NYT a year ago that this is the norm for mattresses. Some will hire a company to pick up and deliver to a shelter or similar, but most don’t even bother.

  5. lpdbw on August 18, 2017 at 07:21

    I only ever sold one thing on ebay, years ago, and it was a guitar. It wasn’t even mine; I sold it for my computer illiterate father-in-law.

    I posted several pictures and the description included the fact that it had been severely damaged and repaired by an authorized Martin repair shop.

    The buyer wrote me scathing messages about the extent of the repairs and accused me of false advertising and selling junk.

    Fortunately, he didn’t file a complaint with ebay, because even then they had a reputation for screwing up this kind of issue.

  6. Doug on August 18, 2017 at 07:22

    Do you third party escrow services would help alleviate this issue?

    I am sure the phone was fine when you sent it, BUT what happens if the buyer is unhappy and felt you misrepresented?

    I tried selling a truck on CL, I got a call from a guy who said he would send the money via pay pal and would have a shipping company pickup the truck and signed title….scammers 🙂

    • Richard Nikoley on August 18, 2017 at 07:26

      I only deal local, in-person, cash on CL. I’ve done cash transactions upwards of $10K. Never a problem.

  7. Jim on August 18, 2017 at 07:22

    Before Craigslist came along, I sold quite a few things on eBay. I stopped when I listed a fiddle on there and put right in the description in all caps that I wouldn’t ship overseas. Sure enough, a buyer from Korea swoops in at the last minute and wins the auction.

    I messaged him first and said I wouldn’t ship to Korea, sorry. He messages back, completely ignoring what I said, asking me what the shipping costs will be. I relisted and sold it to a guy in Arkansas.

    A week later, the guy in Korea files a complaint with eBay, who promptly agreed with him, told me I’d violated the Terms of Service, and knocked my seller rating down about 5%. I haven’t used them since.

  8. Zack F on August 18, 2017 at 09:12

    Nowadays, I only use Ebay to buy. It’s been way biased against sellers for over a decade. Here is a timely article.

    • Richard Nikoley on August 18, 2017 at 09:50

      Here’s the thing. Even if the buyer wasn’t a fraudster initially, even if I missed a slight flaw that he found, and so on (he does have a good buyer rating), he’s now ignoring my messages even though I’ve offered to PayPal $10 to ship the phone back.

  9. Zack F on August 18, 2017 at 14:03

    Report the phone stolen and have the IMEI blocked.

  10. pzo on August 20, 2017 at 05:37

    I read that article in the Guardian. Positively scary how sellers have been screwed of the big bucks – oh, wait, pounds – and then also got down rated.

    This all is due to sellers unable to leave negative feedback. I remember when that started, gosh, ten? years ago. What was some brilliant MBA-tard (with apologies) thinking? Well, those buzzards have come home to roost.

    Sellers, especially business sellers, want to sell. If they mark someone one star as a buyer, chances are overwhelmingly that there are good reasons.

  11. Sidney on August 20, 2017 at 13:41

    You found out the hard way what many have known for years: ebay will always side with the buyer, therefore sellers conduct business on ebay at their peril. What annoyed me the most was ebay’s “double dipping” on fees with Paypal. Always seemed unfair that after you gave ebay a huge cut then you also had to give one to Paypal, even though ebay owned it. Ebay expects sellers to take all the risk, while ebay takes on no risk at all. Sellers should avoid that site and go to Amazon to sell.

  12. Georgene Harkness on September 15, 2017 at 09:20

    Never, ever think of Amazon as “better” than eBay, or any random thug you might find on the street.

    Note that in the Amazon transaction you mention, Richard, you were the BUYER. If you had been a seller, and the buyer was fraudulent, as your eBay buyer was, you would have had exactly the same results. Including the fees on the first transaction. Yep.

    Not to mention that since you could have turned the phone over to Amazon (for sales fulfilled by Amazon, if you were to choose to do that), they easily could have marked that your phone was not included in the shipment, “verified” that it wasn’t there (without ever contacting you) and then marking it as “ineligible for investigation.” Yep, they could have (and I have seen where they have) literally confiscated your phone with no recourse.

    I guess the good part of that would be that you would have found out about it when checking on your shipment, instead of going through the whole sell-to-a-fraudulent buyer process. That way you would have only been out the cost of the phone and the inbound shipping, not the selling fees.

    The only thing about Amazon that is “better” than eBay is that they are genius at coming up with new ways to cheat the seller. eBay pretty much sticks to the same old thing, time after time.

    Come to think about it, you know that Zuckerberg rant you did on FB a couple of days ago? Just slide in Bezos’ name in there, and I’d be happy to call it my own!

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