New York Times article
Andrew Page
May 11th
Ebay Cancels a Sale and Delists the Seller
In the Online Auction of an Abstract Painting
By SAUL HANSELL and JUDITH H. DOBRZYNSKI
eBay, the online auction house, canceled the sale of an abstract painting to
a Dutch software executive for $135,805 yesterday, contending that the
seller, Kenneth A. Walton, who listed the item under the name "golfpoorly,"
had violated its rules in a way that artificially inflated the sale price.
The company also suspended three accounts that Mr. Walton used to trade art,
accusing him of "shill bidding," meaning that he entered bids on his own
sales. In a telephone interview, Mr. Walton, a Sacramento lawyer,
acknowledged placing bids on his own objects, but said he had done so for
friends and had not realized that he had violated eBay's rules.
The episode on Monday, in which bidding started at a quarter and was
propelled by hints that the painting was by the modern master Richard
Diebenkorn, sheds light on the exponential growth of chicanery and fraud in
Internet auctions, where tens of millions of people spend billions of
dollars a year for everything from modern art to stuffed zebras.
"Internet auctions remain the No. 1 source of consumer complaints related to
their problems online and they vie with sweepstakes for the top source of
fraud over all," said Paul Luehr, the supervisor of the Federal Trade
Commission's Internet marketing unit. Complaints about Internet auctions
increased a hundredfold in the last two years, to 10,700 cases in 1999,
outstripping even the rapid growth of the auctions themselves.
That represents 15 percent of all complaints the commission has compiled
from a network of 240 law enforcement and consumer agencies.
The open nature of auction sites like eBay, which let anyone list an item
for a fee of 25 cents to $2, has spawned a wide range of scams. The most
common involve sellers who receive payments and never ship the promised
goods. In other cases, the items sold are damaged or otherwise not as
described.
But a growing number of cases, Mr. Luehr said involved rare collectible
items, from baseball cards to photographs, that are outright forgeries.
The items most often are priced at a few hundred dollars each, although
there are dozens of cases where sellers have defrauded dozens of buyers and
made off with $10,000 to $75,000, said Robert Chesnut, eBay's associate
general counsel and a former federal prosecutor.
Both Mr. Luehr and Mr. Chesnut say they have seen few formal complaints
about fine art. But many art dealers say that cases of fake art in online
auctions are multiplying, but that most of the sellers have avoided
prosecution.
"EBay is one of the greatest avenues for selling questionable merchandise
that's ever been invented," said Alan Bamberger, a private dealer in books
and art. "I go on eBay from time to time. and it only takes me 20 minutes to
a half hour to find a scammer."
Echoing others who have followed the sales, he said that when someone gets
caught, "they say, 'I'm so sorry and return the money." Most likely, he
added, they put the item back up for sale until they find a buyer who does
not check it out.
The auction sites say that fraud occurs in only a tiny fraction of their
sales. EBay, the largest auction site, says that one-tenth of 1 percent of
its auctions involve fraud. But in the first three months of the year, eBay
held 53.6 million auctions on which $1.15 billion worth of goods were sold.
That implies that some 50,000 eBay auctions involved fraud.
"You can look at it and say there were 50,000 cases of fraud," Mr. Chesnut
said, "but there are a lot of companies that would love to have only
one-tenth of 1 percent of their customers to have a problem."
Yahoo and Amazon.com, which run the No. 2 and No. 3 auction sites,
respectively, do not release figures but they each handle millions of
auctions a month.
Jeff Blackburn, the general manager of Amazon's auctions, said the total
cases of fraud had been "minuscule."
For inexpensive items, which represent the vast bulk of the online auction
sales, the buyers are only modestly at risk. EBay offers an insurance policy
covering $200 in fraud loss with a $25 deductible. Amazon offers up to
$1,000 in fraud coverage with no deductible.
Mr. Chesnut also said that big-ticket fraud was a relatively small problem.
"You don't see much fraud on the larger-dollar items because people are more
careful," he said. "You're not going to send a check for $130,000 and wait
for a painting to appear in the mail."
Still, stories of fake art for sale online are widespread.
Edan Hughes, a California dealer who buys and sells artwork on the Web, said
he recently bought what was described as an oil painting for $9,000. But he
received a print instead. "I fought them and they gave me my money back," he
said.
Joseph Valiquette, spokesman for the New York office of the Federal Bureau
of Investigation, said that its art theft squad was investigating a handful
of cases involving the use of Internet auction sites as a forum to sell
items that turned out to be fake paintings.
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Exponential growth of chicanery in Internet auctions.
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Such activity, he said, would violate federal statutes prohibiting mail
fraud, wire fraud and transportation of stolen property across state lines.
For more expensive items, auction sites take no responsibility and buyers
take the risk of fraud. One potential source of protection for buyers is
that the auction sites let their members rate the performance of both buyers
and sellers, creating a self-policing mechanism.
But there are flaws in this approach, art dealers say. For example, many
users say they live in a tit-for-tat culture, that leads some Web site
members who have received negative ratings to retaliate by placing negative
reviews on their detractors. Sometimes, good reviews are posted by friends,
and in any case, by people who may not be able to spot fakes.
"To get a good rating, all a seller has to do is respond on time, pack the
goods on time and ship on time," Mr. Bamberger said. "Then you get good
feedback."
In another attempt to combat fraud on more expensive items, several of the
online auction sites have high-end sections that guarantee the authenticity
of the items sold. EBay has a service called Great Collections it operates
in conjunction with Butterfield, the San Francisco auction house it bought.
And Amazon has a similar service in conjunction with Sotheby's and a network
of art dealers approved by Sotheby's.
Mr. Blackburn of Amazon said that the majority of the high-end art on its
site is sold through the Sotheby's section.
"We think our users feel more comfortable buying art vetted by a dealer," he
said. Buyers on that portion of the site, however, must pay a 10 percent fee
in return for the guarantee. On Amazon's regular auctions, as on eBay's, the
seller pays a fee of 1 to 5 percent.
The sites say they fight fraud in other ways. EBay, for example, keeps a
list of people it has suspended and tries to keep them from coming back onto
the site using new names. A spokesman for the company refused to say how
many people had been suspended.
Mr. Walton, a 32-year-old bachelor, attracted attention through a
provocative listing in which he falsely portrayed himself as a married man
who was offering a painting that had been damaged by his son's plastic
tricycle and that his wife banished to the garage. While never portraying it
as a Diebenkorn, the listing provoked speculation by displaying the
signature "R.D. '52" in a photograph of a part of the painting, which used
the same pallette that Diebenkorn employed in the early 1950's.
The auction was won by Rob Keereweer of the Netherlands. On Tuesday, he and
Mr. Walton agreed to void the sale if an expert determined the painting was
by someone other than Diebenkorn and Mr. Keereweer did not want it anymore.
Because of eBay's actions yesterday, Mr. Keereweer has no obligation to go
through with the purchase. Mr. Keereweer could not be reached for comment
last night.
But some eBay-watchers say eBay does not take reports of fakes seriously
enough. David Carlson of the Carlson Gallery in Carmel., Calif., said he
called eBay on Monday before the auction for Mr. Walton's painting closed.
"I asked for the fraud division a half-dozen times," he said. "The girl on
the switchboard refused to put me through. Instead, she went to golfpoorly's
offer. She read it and said, 'I don't see any fraud here.' She made the
decision right there."
Kevin Purslove, an eBay spokesman, said that, in general, eBay would not
remove an item unless the complainant could offer solid proof. "Then we
contact the seller and raise the question," he said. "We don't remove
something on someone's word."
Many art dealers say such cases will continue, even if the sites and law
enforcement officials pay more attention to online art fraud. That is
because there is a growing group of art buyers who want to use the Internet
to build their collections on their own, bypassing art dealers, just as many
online day traders are avoiding stockbrokers.
"These collectors think they can be one-up on the auction houses and dealers
and they want to buy first and not pay for the expertise," said Joel
Garzoli, who owns the Garzoli Gallery in San Rafael, Calif., with his
father. John Garzoli. "They are paying substantial sums for paintings that
have no value."
Lisa
anywhere that this painting actually is a fraud. Does anyone know?
Lisa
Andrew Page <apage1...@maine.rr.com> wrote in message
news:gQqS4.8394$J81....@newsr1.maine.rr.com...
Dan Cottler
Page" <apage1...@maine.rr.com> wrote:
> The episode on Monday, in which bidding started at a quarter and
> was propelled by hints that the painting was by the modern master
> Richard Diebenkorn, sheds light on the exponential growth of
> chicanery and fraud in Internet auctions, where tens of millions
> of people spend billions of dollars a year for everything from
> modern art to stuffed zebras.
Durn it! I don't have room here for a stuffed zebra!
--
- Psychoceramic Emeritus <mailto:dar...@usa.net>
- South Jersey, USA, Earth <http://hamsterdance.com/>
- My mind not only wanders, sometimes it leaves completely.
Brad and Elke Hinze
are saying is fraudulent is that the guy shilled his auction.
Elke
Dave Sacerdote
> are saying is fraudulent is that the guy shilled his auction.
Well, I guess so...but didn't his item description seem just a little too
smart-ass and "off the cuff"? Like the small hole the kid made "with a big
wheel" that you can put duct tape on? And the photo of the hole just
happened to show the signature and date on the painting. And the "hyuk hyuk
this picture looks sideways but what do I know about art", etc. Just seemed
a little too contrived.
Besides, why would a guy expecting to get twenty bucks for a chunk of
painted canvas shill up the bidding?