Fraud on eBay and the failure of eBay to do enough to prevent it.

One of the key eBay statements was "people are basically good."

And yes, especially in the early days of eBay this was essentially true. The site was built on trust.

The problem with this is that eBay was way too slow to understand that they had become a target for crime. Listing fraud, Paypal money laundering and many other issues became a real concern on eBay.

Although eBay had, and now does use the tools to do a better job of preventing fraud, for the longest time they only worked in reaction to fraud, instead of being pro-active to stop it.

An enormous amount of the fraud perpetrated on eBay originated in Romania. Romania was a country that one had a very progressive attitude towards abortion, which was completely changed when Nicolae Ceauşescu took power. Abortions were no longer permitted, and most women were expected to be producing babies on a regular basis. Eventually what this lead to was a poor population and a lot of unwanted children, which ultimately leads to a society that relies heavily on crime. There's a lot more reading and learning that can be done on the subject, but for eBay purposes it helps to explain why so much fraud originated there.

eBay had tools that identified the IP address of an account at every stage. Sign up, log ins, bids, items listed...everything could be tracked by IP. And the one group of IPs that were literally red flagged were Romanian. Essentially ANY activity on eBay from Romania was considered suspect, and was investigated.

Romanians were heavily involved with account takeovers, where they through phishing emails they would steal someone's log in, log into their account, and list thousands of high ticket items that directed the potential buyer to transact outside of eBay. As many of these accounts were in the USA, they seemed to be safe to the unknowing member. However, there were no items, the account was being run from Romania, and it was all about fraud.

Despite this knowledge, and despite having the ability to actually BLOCK certain IP's, for years eBay refused to do so. They would react to the fraud and eventually remove the listings, but all it took was a brief amount of exposure for these listings to be successful.

Again, after allowing this to go on for years, finally eBay started blocking IP's that were known to be fraudulent. Although before this happened, I was amazed to read an email from an executive claiming that eBay didn't want to do this, because it could just be that the fraudster was using a web cafe in Romania, and eBay didn't want to block a potentially legit Romanian user from accessing the site. Compared to the amount of fraud on the site that came from Romania, the amount of legit Romanian members was microscopic.

Knowing first hand how incredibly stupid eBay was at dealing with issues like this, it was no surprise at all to read about the Romanian hacker who hacked into eBay's internal network.

The infamous Bill Cobb email, and the terrible issues it caused with Customer Support.

Some of you will remember the Feb 2005 email from Bill Cobb.

For those that don't, he ended it with the following:

"eBay has never stopped listening to our users and we never will. I know many of you already have Meg's e-mail address and frequently send her messages about things you care about. I hope you will do the same with me. My e-mail address is billcobb@ebay.com. I promise I'll read every e-mail. And most of all, I'll listen.

Sincerely,

Bill Cobb President eBay North America "

Bill Cobb was one of the worst things that ever happened to eBay, and this email pretty much summed up his complete lack of understanding of what eBay was about.

Immediately after sending this email out, his inbox was FLOODED with messages. Tens of thousands of messages. And this created an immediate problem. Clearly Bill Cobb couldn't really read all of these messages. In fact, many questioned if he could read at all.

So, this is what happened. One of the major CS centers in North America was directed to handle the volume. First, the entire QA (quality assurance) team was taken away from their tasks of making sure that the reps were doing their jobs properly, and they were tasked with answering what became known as the Cobb queue.

Not only did this take away the QA for the center, they were instructed that they could not use any of the pre-formatted email replies that existed in the database. And, they were given carte blanche to take whatever time was required to answer all of the concerns in an email.

It quickly became apparent that the QA team couldn't deal with the volume, nor did they have enough knowledge of the various issues to properly answer these concerns. So, more reps were drafted into answering these emails. Now keep in mind, a large number of these emails were about issues that had happened YEARS before, issues that couldn't even be dealt with anymore, but, because Bill had promised, they all got replied to. Naturally, with the caveat that they were being answered "on behalf of Bill Cobb".

So, for the first month or so, a lot of overtime was offered to help deal with the normal emails queues, which had naturally become slightly backlogged. This worked alright for a bit, then, with the 1st quarter coming to a close, all overtime was stopped. Which meant that because the Cobb emails were the #1 priority, many important email queues were allowed to backlog. Queues like the Banned Items reports, which quickly ended up more than a month behind. A queue which dealt with user reports of stuff like guns and drugs and other bad things not allowed on the site. Great idea Bill!

Myself being appalled at the idiocy, I sent an email to the internal eBay sites "Ask an Exec" feature, asking why overtime had been cut off when such important queues were being ignored, and such things as listings for guns were being ignored. Naturally, this created a massive shitstorm, because the person in charge of dealing with those emails forwarded it to every single executive in the company. My supervisor got crapped on, as did I. However, many Supervisors would say that off the record, they thought the Cobb email was a complete mistake.

Amazingly, this queue continued on for a long time. And at first, because the answers had to be free-handed, there were no metrics or stats kept for the reps working them. And reps, when given a license to waste as much time as possible without getting in trouble for it, took all the time they could. Not to mention that the overall quality of CS dropped because there was no more QA team to monitor the work being done!

Yes, this was Bill Cobb at his very worst. A man who had no clue what he was doing. Yet, he walked away from eBay with millions of dollars from his stock options.