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The Ol' Bait and Click
Then, in late January, malkilots switched to offering the cameras themselves, which regularly fetched more than $650. In one auction, the Georgia bidder -- who communicated and did business only under a user name and did not respond to e-mails -- put in the highest of 37 offers for an Olympus SLR professional camera, paying for it online. Instead of receiving the camera, the buyer got a cheap camera bag.
"I had checked out the seller, all positive feedback going back several years," the buyer wrote. "What I didn't check out was WHAT kind of item that feedback was for."
Other successful bidders reported they also got cheap bags instead of cameras -- if they got anything at all. With losses totaling about $25,000, the bidders complained to eBay, which shut down the vendor's account. Negative feedback streamed into the site calling malkilots a fraud.
EBay did not return calls requesting comment on the case.
The incentive to inflate one's reputation is powerful even for vendors who do not plan to turn on their buyers. Academic studies have shown that eBay vendors with good feedback ratings can sell their wares faster and charge more for them.
John Morgan, a business professor at the University of California at Berkeley, said his research found that 526 eBay sellers posted more than 6,500 listings on the site during the second half of 2005 for low-priced or seemingly valueless items in an apparent bid to inflate their feedback reputations.
"Such a listing makes no economic sense unless the seller is trying to increase his feedback rating," he said.
Morgan and co-author Jennifer Brown found one vendor called "thelandseller" who posted 304 such listings -- offering to sell a riddle in return for a penny and positive feedback. Then, with his inflated rating, "thelandseller" went on to try selling several undeveloped pieces of property in the southern United States whose starting bid prices were in the thousands of dollars.
To counter the threat of users manipulating their reputations, Web sites can deploy complex algorithms to detect fraud, for instance by checking whether patterns of mutual admiration seem to originate from the same computer, or make it difficult or expensive for users to create multiple accounts.
Whitman, eBay's chief executive, said the company regularly upgrades its feedback program to try to prevent people from gaming it. The company only allows feedback from users who actually conduct business with each other and limits the amount of feedback one account can provide about another. Now, eBay is set to launch a new system, Feedback 2.0, that Whitman said will make cheating even more difficult by asking users to provide more detailed responses, evaluating, for instance, the quality of the product sold, the shipping time and the communication between seller and buyer.
Whitman said false positive feedback poses less of a problem than criminals who hijack the accounts of users with good reputations and then use this fake identity to prey on unsuspecting buyers, she said.
While sites like eBay and Amazon use ratings to help conduct commerce, a new start-up called Rapleaf is a general Web site devoted to tracking people's reputations and trustworthiness on and off the Internet. Auren Hoffman, Rapleaf's chief executive, said the site weaves together different types of information about individuals, making it more difficult for cheats to game his system. But he expects them to keep trying.
"Fraudsters get more sophisticated," he said. "It's always an arms race."