So I wanted to write up another article about drop-shipping scams, specifically on Ebay, that looked more at the problems it causes to everyone, not just the people directly involved. I will spare you the long explanations of drop-shipping scams and how they work as they are covered in great detail in two articles shown below:
Drop Shipping Lego: How to Avoid Being Scammed – By Talon
Lego Larcency: Scams, Schemes, and Shady Practices – By Ed Mack
A quick explanation of a drop-shipping scam: Someone sells a set on Ebay or another site, usually for less money than the retail or normal price of the set. Once the listing has sold, the seller purchases the set fraudulently from somewhere like Lego.com, Walmart, Target, etc. and has it shipped directly to the buyers residence. By fraudulently, I mean using a stolen credit card, a credit card opened in someone else's name, or through other types of identity theft. In this article, I wanted to discuss more about the effects after it happens and how it affects everyone.
Before I start, I want to make it clear that these are my opinions that I fully believe in. You are absolutely welcome to disagree with them – and you may be right. Please, if you do, do not take offense to anything I said. Voice your opinion. It is only in debate and discussion that we become more intelligent. Read the addendum's as I would like to personally hear everyone's opinion.
It may be human nature, but I think a lot of people (myself included) are like the 4 main characters of Seinfeld in certain situations. We are friendly, decent people, who are really only concerned with ourselves. This doesn't mean we don't care about other people, but more that we are generally unconcerned with things that happen unless we are directly involved. One of my favorite Seinfeld episodes, the series finale, depicted this in a perfect light. Jerry and the gang were walking down the road when they witness a person being robbed. They shrug it off and walk away. Eventually, they are arrested for breaking the “Good Samaritan” law that stated if a person witnessed a crime, they must intervene in some way.
I know if I was walking down the street and saw someone being robbed, I would be very hesitant to run over and just immediately involve myself – and I am sure most of you would feel the same way. But, imagine if you recognize the person committing the crime. It happens to be someone you walk by every day on the way home. At any point in time, you could be involved. There is no guarantee you ever will be, but suddenly the situation has changed. It now directly matters to you this person is stopped and caught.
This is a strong example, but can help illustrate the points some of us bring up about drop shipping scams and the issues that arise from them. If you use Ebay, if you use BrickPicker, and if you use a bank, all of these things affect you much more directly than you may understand. Hopefully after reading this, it will allow you to put in perspective some of the issues that arise from not being the "Good Samaritan". It is not only that I discourage you ever knowingly buying one of these listings, but avoiding the situation completely, and possibly taking action to help defend others. Here are the different people involved directly and indirectly by this epidemic and how they are affected:
The Victims of the Fraud:
This one is fairly obvious – if someone is using stolen credit cards to purchase items fraudulently, then the people who's credit card/identity is stolen will eventually have to deal with that. Yes, some people have credit cards that protect them from fraud or help them recover losses, but the victims are still affected by the fraud's occurrence. It means calling credit card companies, checking your credit report (which is not free though it is supposed to be) constantly for the next several months, calling the IRS to make sure nothing else has been stolen, and the flat out worry every time you put your hand on your wallet. If you have ever been the victim of identity theft, you know what I am talking about. Personally, my wife had her identity stolen and the person destroyed her credit. It took her 6 months to sort it out, and there were some things we were told would never be pulled from the report.
How it affects you: It can happen to you. Most people think if a credit card is stolen, that person did something stupid like filled out a form online to win 20 free Ipads, 10 puppies, 3 enchiladas, and a van down by the river. It is flat out not true. You can have your credit card, identity, and much more stolen at any point in time.
I work for a large Networking company as a network engineer in a customer/business facing position. Everyday, I work in business' networks that are flat out insecure. Yeah, they have some dinky virus protection and a few passwords, but anyone who had an inch of network security training could easily break into their network and steal data. Many of these companies have credit card information stored on servers in these unsecured networks! If these are broken, it doesn't matter how smart the people that shopped with this company are – they go down as the company goes down. Don't believe me? Read on friend!
Anyone here heard of Sony? The Play Station Giant last year had their network broken into – and a good amount of the credit card information stolen because it was stored in PLAIN TEXT. Like the text you are reading. My card was there and was stolen with it. The fact is, as “safe” as anyone thinks they are, if you have ever typed your credit card information into a computer, you are at risk.
Source: http://en.wikipedia.org/wiki/PlayStation_Network_outage and its listed sources
Note: This is not to discourage anyone from using credit. Don't turn into a hermit, this is just a reality people need to understand. If you shrug it off when others are defrauded because you would "never fall for that" or "are protected", you are unfortunately very mistaken. If you have more questions and are not convinced you are at risk, feel free to PM me. I have quite a bit of experience and training in CyberSecurity, and I know some things that can make you cringe every time you log on to anything that uses the internet.
Why you should care: If you see this happening and say “who cares, it doesn't affect me”, wait until it does happen to you. Think about it in this way: Imagine you have something stolen from you. The person who stole it sells it to someone who knew it was stolen, but wanted it anyway because it was a great deal. The thief then returns to your house to steal more items, because he knows he has someone to sell to who could care less how he gets the items long as they get great prices. This is what you are doing if you don't care that you are purchasing an item on Ebay that is more than likely a scam.
The buyer who purchases the merchandise:
I will not cover this as in depth because the other two articles I mentioned gave specific examples. I don't want to reiterate those articles and those points because their articles deserve the traffic and they most likely stated it better than I did anyway. Basically though, if you purchase something that was originally bought fraudulently, it will most likely come in your name as if you made the purchase. For example, I recently received a purchase from Ebay that was shipped from the Lego store. The only thing on the invoice that was not a piece of my information was the credit card number. It looked like I just stole the credit card and purchased it!
If the police, credit card company, etc. investigate, they can seize the merchandise and question you about it at any time. Yes you are protected by Ebay or Paypal, but that doesn't mean it isn't a headache. If you think it isn't a headache, wait until you experience it. I have twice, and in one instance I had the original person whose card was stolen calling me trying to find out why I stole his identity!
How it affects you: If you shop on Ebay, you are susceptible to this. Are there sure fire ways to protect yourself? No. There are very good ways, covered in the two articles I mentioned, but there is no sure way to cover yourself. But the more these people are left to continue using the scam, the more scam items that are being listed. Eventually, there isn't a way to feel OK about buying anything anymore.
Why you should care: If you buy an item that you are fairly sure is involved in some type of scam, you are perpetuating this scam. You are encouraging people to continue defrauding people. If you sell sets, this is just competition against you that you can't compete with, because you aren't purchasing your sets with seemingly Monopoly money!
If you receive a set and notice it was drop-shipped, the seller paid more for the item than you did, and your name and information is on the invoice, act! Ask the seller about it! If you just say “Oh well, I got a good deal”, you are again encouraging the behavior. If you don't know what to do in this situation, I wrote an article on this very subject found here: http://blog.brickpicker.com/another-piece-of-information-about-lego-drop-ship-scams-what-to-do-if-you-have-already-fallen-for-it/
Anyone that uses BrickPicker:
Have you ever looked at the current market price for a set on BrickPicker? If you have, you have been affected by Ebay scams. BrickPicker pulls all of its market data from Ebay sales. If tons of people sell a set for less than it is worth because they are doing it fraudulently, this brings down the BrickPicker price to a level that is not actually a true representation of the market.
How it affects you: This was covered above, but think about this situation: You find a large quantity of a set in store on clearance for $50. You quickly check the BrickPicker price and it shows $60. You figure that there is no way to make enough money for it to be worth your while to pick them up. If this data is brought down by the fact that 50 new sets were sold for $40 fraudulently, it could hide the the true market value for the set is $70. You just missed an awesome deal because of it. This is a very extreme example, but it is important to note.
Why you should care: This can easily be inferred from above. You want to have correct data to use when you search for sets. Think it will never get so bogged down that it will actually affect you? Take a look at 10225 R2D2 and the 10228 Haunted House recent sold listings for condition "new". You will see some pretty low prices, most likely drop shippers, bringing down the price for everyone else.
Anyone that uses Ebay:
If you use Ebay to sell or buy, you are negatively affected by this. This negatively affects all Ebay prices because these items are normally sold for less than the item's worth. Yes, there are times when someone sells a set for too cheap, or times when they just need the money, but the damaging ones are the brand new, MISB sets that are sold for used-like prices because they are not indicative of the "true" market.
How it affects you: Have you ever used the “completed listings” checkbox on Ebay to figure out what something has sold for? Let's say you are looking at a bunch of listings for a set you are selling and you list it for cheaper than it is worth because so many people are fraudulently selling it for cheaper. Similarly, if you are selling an item for the real market price and someone else is selling 20 sets for much cheaper, who will someone buy from?
On the other hand, you go to buy a set and you expect it for cheaper than you may actually get it. If you buy the cheapest listing, you are back to being directly in the line of the scam itself!
Why you should care: You are on this site, so clearly you like Lego. This all negatively affects Lego sales and the people who buy and sell them. If you use Ebay, you should want information and prices there to be correct. You should want to be able to purchase something with minimal worry that you are going to be involved in a scam, or contacted by the police.
Everyone who uses a Bank:
I don't want to get too much into high finance – for one I don't know everything about it, and I am not sure there is anyone that does – but banks in general offers things like “fraud protection” and “fraud coverage”. Basically, if someone steals your information and does something illegal with it, you are covered. Man doesn't that make you feel good? No reason to worry anymore.
That, unfortunately, is very short sited. It reminds me of another great Seinfeld episode where Kramer told Jerry that they could commit mail fraud because these big companies can just “write it off”. Jerry asked how, and Kramer said “I don't know, they just write it off”! IN the non TBS rerun world, that is not the case. Have you ever paid a credit card fee? Have you ever paid an ATM fee? Have you ever paid interest? Banks make money and are in the business to make money. They offer fraud protection as a way to help ease a customer's pain and get them to sign up for accounts and credit cards. And it is a good thing.
However, every time it happens, the bank takes a hit. Every hit it takes, the larger the Bank's expenses get, the more fees that are levied on those who use the bank. Those that never were involved in the fraud. Those that did nothing wrong.
How it affects you: Obviously, if you use a bank, you got my point in the original paragraph. But, let's say you don't. Have you ever purchased something from a store? Guess what they use: A bank . Which means they are charged all the fees from the fraud. This means they have to charge you more for their merchandise.
Why you should care: If you have any way of participating in the economy at all, you should care. This is one of the reasons why things get more expensive. This is why more and more people everyday are committing these types of scams. No one cares anymore because, hey, they are protected! And everyone hates banks right?
So what do we do? Buy nothing, never go out, and try not to ever interact with anything that takes voltage? No, just try to think before you purchase an item that is evident of a scam. Always ask questions. Always make sure pictures are there, the buyer has good feedback, the price is not “too good to be true”. Make sure the buyer isn't using a 5 day handling time. Ask for a picture of the item along with the listing Ebayer's ID on a piece of paper. Just use your brain – you are capable of telling the difference most of the time. If we work together, we can help put a stop to this. Don't use the fact that "it might not be a scam" to justify purchasing something at a good price. If it looks like a scam, even remotely, avoid it.
I want to make sure people understand – not just one of the drop-ship scam pieces of evidence means it is a scam. It is a combination of many of them. We all have to morally decide at what point we see these in combination and decide not to buy. But if you ignore this moral duty, I urge you to consider what I have written above and try to justify how you are not part of the problem. I don't mean for you to go out and report everything that looks like it could be a scam. But we are reaching a day and age where we, as informed members of the BP community have a duty to use our knowledge to the benefit of everyone. Yes, some innocent people may have trouble selling their listings, but if these people are not fraudulent sellers, they will be able to meet our demands without issue.And if you purchased something that turns out to be a scam, you are not a bad person. But don't just ignore it and put the box on the shelf. Act. Make calls, ask for a refund. Report the seller and the listing.
Let's be a part of the solution instead of part of the problem. Let's not be part of the crowd who just says “it's not our problem”. Because the fact is, if you live and breath in this world, it is your problem.
Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods.