Examination of Witnesses (Questions 640
WEDNESDAY 21 FEBRUARY 2007
What has eBay done for the customers who have been scammed that
Mr Griffith: One of the things we recommend
in terms in payment is, when they pay with something like Western
Union, it is incredibly difficult for us because, first, it has
happened off our websiteit has actually had nothing to
do with us: it is just an email that was made to look like ours.
Secondly, they have paid with Western Union. What we do then is
try to work with the police. We ask them to work with the police
and then work with us, to see if we can track down fraudsters
through that mechanism. What we push quite strongly on the site
is the use of PayPal as a payment mechanism. The reason for that
is that there is a buyer protection programme, which covers you
up to £500. The vast majority of our transactions are under
£500. If you used PayPal to pay, thereforethere are
certain criteria, like everythingyou are then covered by
the PayPal protection programme and you get your money back, which
is the reason we push PayPal as a payment.
Is it not possible for you to go after, to attempt to prosecute,
the people who have imitated your website?
Mr Griffith: The example I gave you about being
on the ground in Romania with the United States' secret service
and the Romanian police, walking into Internet cafés and
arresting peoplewe certainly do that. As Michael referenced
earlier, we generally go after them for fraud. I forget how it
is worded in the new Fraud Act, but basically identity theft with
the idea of committing fraud. We find that is a better way to
catch them than going after IP violation.
You expressed concern about the applicability of the Distance
Selling Directive to your type of business and the complexity
of selling items into other European countries. Should we not
be looking to protect consumers and ensure that their online experience
is the same as they are used to offline?
Mr McGowan: We absolutely support strong consumer
protection legislation. We are a marketplace of buyers and sellers
and, probably more than any other Internet company, our business
depends on trust. If there is strong consumer protection in place
then trust is enhanced. We would therefore support that. What
we would welcome, however, is greater harmonisation in consumer
protection legislation. The problem we have encountered with the
Distance Selling Directive is that it was implemented through
a minimum harmonisation process. So you see that different Member
States have implemented it differently. As a result, for example,
there is a right of withdrawal in the UK for consumers which is
seven working days; however, in Germany it is 14. There are also
differing rules determining who bears the cost of return, depending
upon the Member States. So we absolutely want to see strong consumer
protection but, equally, from the sellers' standpoint we want
to make sure that they are not faced with a patchwork of different
legislation which then becomes hard for them to enforce. I think
that it is worth making the point here that we have a very large
number of small businesses who are trading on the site. We calculate
it as something like 68,000 people who are dependent upon eBay
sales for some or all of their income. You have a very large number
of SMEs who are trading on the site, and many of them are sole
traders and therefore do not have the resources to keep track
of all the different types of consumer protection legislation
which are there. In answer to your question, however, we very
much do support strong consumer protection legislation.
Chairman: Thank you very much. We have asked
you a lot of questions and you have answered them patiently and
in detail. We very much appreciate your coming to talk to us.
If anything occurs to you subsequently, please write to us.