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Ebay Scams and Equitable Estoppel

Discussion in 'Internet & Social Media Law' started by harigupta, Jul 24, 2009.

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  1. harigupta

    harigupta Law Topic Starter New Member

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    My jurisdiction is: Mexico/Australia

    Hi there,

    I hope that I didn't start this tread in a different subject.

    After being scammed on ebay I was thinking of a possible test case of claiming that Ebay should be found liable (taking contributory negligence into account) for frauds that occur through their site where a loss is incurred by the victim.

    Where a consumer has a loss there is a possible claim in the tort of negligence against ebay for allowing a fraudulent seller to join (especially where the seller provides false details and Ebay has failed to put in checks to counteract this problem).

    Although ebay includes a disclaimer "YOU ACKNOWLEDGE AND AGREE THAT EBAY IS NOT INVOLVED IN THE ACTUAL TRANSACTION BETWEEN BUYERS AND SELLERS. AS A RESULT, EBAY HAS NO CONTROL OVER THE QUALITY, SAFETY OR LEGALITY OF ITEMS OR CONTENT POSTED BY MEMBERS ON OUR SITE, THE TRUTH OR ACCURACY OF LISTINGS, THE ABILITY OF SELLERS TO SELL ITEMS OR THE ABILITY OF BUYERS TO BUY ITEMS. WE CANNOT ENSURE AND DO NOT GUARANTEE THAT A MEMBER OR BROWSER OF OUR SITE WILL ACTUALLY COMPLETE A TRANSACTION OR ACT LAWFULLY IN USING OUR SITE" I feel this could be dealt with using equtable estoppel - given the fact that ebay earns a commission on transactions in the same way as an auctioneer does and ostensibly it is an auction site. It also purports to have buyer protections and provides advice as to how to avoid being scammed - it follows that if you follow all this advice and you still get scammed the courts of equity may have jurisdiction.

    What do you think?

    Hari
     
  2. dee_dub

    dee_dub Moderator

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    I think I'm missing something here. What do you think eBay is estopped from doing, and why are they so estopped? And why do you need this to fall under equitable jurisdiction?

    As I understand equitable estoppel (granted, it's been a while, so I'm relying on Wikipedia) equitable estoppel includes proprietary estoppel and promissory estoppel. This isn't proprietary since it doesn't involve land. And I fail to see in the above what promise eBay made that you think they should be held to.

    Nor does this look like an estoppel by representation, which I am more familiar with. (A says X, B relies on that, A wants to say not-X, it would be unconscionable to allow A to do so.) And anyways that's common-law estoppel.

    Perhaps you are suggesting that the acknowledgment was secured through eBay's representation that it is not involved in a transaction, and that representation is actually false because eBay earns a commission? Maybe, maybe not - I'm not sure earning a commission = involvement in the transaction. Even if so, isn't this simple negligent or fraudulent misrepresentation?
     
  3. harigupta

    harigupta Law Topic Starter New Member

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    It would be fraudulent misrepresentation on the part of the scammer, but the problem with many of these fraudulent Ebayers is that it is very easy for them to 'go missing'. Ebay must do virtually no verification of addresses and therefore it is very easy for a person to give Ebay, and any potential buyer a false address or in my case an address that doesn't even exist. So the question is, who does the victim have a legal claim against. In my case I used a method that ebay deems acceptable, i.e. Bank to Bank transfer. When it comes down to it, when you have transferred money into someone's account it is impossible to reverse it, even if you know that the person is defrauding you. I picked up on the scam the day I made the transfer, but as soon as the transfer had left my bank it was impossible to retract it without the permission of the Seller (the recipient account holder). You cant really have a claim on your bank, because it just followed instructions, you can't have a claim on the seller's bank, without an interim injuction or something of the kind - so who can you claim against?

    I contrast the situation to an advertisement in a newspaper, or in the yellow pages. In these situations the publisher is profiting from the sale. In a newspaper or in the yellow pages their profit is a set service fee for the advertisement. They obviously do not check the credentials of the person who lodges the ad, and so if you are scammed, well you could hardly claim reliance or negligence on the part of the paper. You could have a claim on the person lodging the ad, if the person is not the same as the seller as you could claim that you relied on the fact that the ad was accurate. If the newspaper or the yellow pages has a number of such transactions, you could probably alert your national consumer and fair trading commission to claim that the newspaper has a stronger duty of care to ensure that it's readers are not scammed especially if this has been done in the past.

    The difference is that Ebay holds out that it takes matters such as the identity and other details of their members very seriously. They prescribe certain methods by which you may pay and provide advice accordingly in their safety centre, they establish a rating system, which, although flawed, allows members to post experiences. They provide buyer protection schemes and their fee is a commission, which is determined by the sale price of the item. For all intents and purposes, they are acting as an electronic auctioneer. For them to place a clause in their terms of agreement denying that they have any invovlement in the transaction runs contrary to this. It follows that in a court of equity you could assert that this denial of involvement be estopped as it is quite different from the reality. I feel that it may be possible to assert that Ebay holds a duty of care to its members to ensure that the details of its members are accurate - otherwise, what would be the difference between completing the transaction within Ebay or outside of Ebay - do you get any extra protection?

    Going back to my original post - You could have a claim in reliance - relying on the fact that the fraudulent seller's details were incorrect or did not exist, relying on the fact that ebay stated that a bank to bank transfer was a legitimate and commonly used method of paying for an item (and at the time it stated that unlike Western union and Cash wires it is possible to trace these payments giving the payee a level of security), and relying on the fact that because the offer and acceptance were completed through Ebay, you were contractually (legally) obliged to pay for the item which you had won even if it never existed in the first place - through my behaviour they imposed an obligation on me that resulted in me losing money - surely that is tortious?

    Finally, I'm not sure if this is relevant, but in Australia, Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 shows that promissory estoppel may be used not just as a shield, but also as a sword - i.e. you can use it as the basis of an action not just as a defence. If you could claim that a reasonable person would have relied on the ostensible nature of Ebay as an auctioneer then you could also rely on this despite the contradictory user agreement. The important thing here is to circumvent that clause which for Ebay is a denial of all responsibility.

    I dont know... I'm still out 1151 GBP from the transaction with no legal recourse.

    Cheers

    Hari
     
  4. dee_dub

    dee_dub Moderator

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    I'm talking about your plan to go after eBay. I'm quite sure that eBay scammers misrepresent all sorts of things.

    One of the reasons you should use your credit card for eBay purchases.

    Going back to your original post, and my original reply, I still don't see what kind of estoppel argument you think you might have against eBay. I agree you may have been screwed over by the fraudulent purchaser. I'm not sure why eBay should be on the hook for that. More to the point of your original post, I am not sure how you think equitable estoppel will put eBay on the hook.
     
    Last edited: Jul 25, 2009
  5. Michael Wechsler

    Michael Wechsler Administrator Staff Member

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    In short - my feeling is that your case will unfortunately not go anywhere unless you file a class action. Numbers have a way of also attraction attention and creating a public problem that needs to be addressed. If you can direct the attention of an attorney general, most of the battle is won.
     
    harigupta likes this.
  6. harigupta

    harigupta Law Topic Starter New Member

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    I have to agree, as given the legal resources that Ebay has at its disposal a single small claimant has no chance of creating law without investing thousands of dollars of their own money. Thanks for the opportunity to participate by adding this thread...

    Cheers

    Hari
     

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