eBay Inks Security Deal with VeriSign

In an effort to shore up its defenses against fraud, eBay signed a deal with Internet-security company VeriSign to provide verification services for the online auction site.

As part of the deal, whose financial terms were not released, eBay will use
VeriSign’s Authentication Service Bureau to vet sellers during registration.
The authentication service will verify information sellers provide, such as
addresses and phone numbers. It is slated to begin as early as next month
for the U.S. site and later for international sites.

“Our new relationship with VeriSign continues our tradition of providing
eBay user with the latest tools designed to shop in a safe, friendly and
trusted environment,” Jeff Jordan, eBay’s vice president of U.S. operations,
said in a statement.

Although eBay downplays the problem of fraud – the company says it takes
place in .001 percent of transactions – the problem is real. In a report
issued last month by the Internet Fraud Complaint Center (IFCC), a taskforce
of the Federal Bureau of Investigation and National White Collar Crime
Center, Internet auction fraud was the top consumer complaint last year. The
IFCC estimated consumers lost $17.8 million to online auction scams.

EBay spokesman Kevin Pursglove said eBay would use the authentication
service’s registration tool, which matches the data users provide to public
records, such as phone listings. The authentication procedure would be free
and apply only to newly registered sellers, he said.

“Essentially what we’re looking for is that the information provided to us
is accurate,” he said.

Based on the verifiability of the data provided, eBay will attempt to
identify potential problem sellers. Pursglove said the final decision on
approving a seller would remain eBay’s to make.

The deal with Verisign is another step in eBay’s attempt to weed out
potential scam artists from the ranks of its sellers. While the company has
sought to distance itself from any responsibility for the scrupulousness of
its sellers, it has advised consumer to take preventative measures, such as
checking a seller’s history through the feedback program or using an escrow
service for big-ticket items. Also, eBay offers sellers an optional ID
Verify program, which matches their personal information with their credit
report, and puts an ID Verify icon next to their name.

“We think we have come a long way in the last year, year and a half, in
identifying those that might come to the site to engage in nefarious
activities,” Pursglove said.

However, the VeriSign auditing service would have failed to stop some who
have used eBay for their scams. For example, last week the Federal Trade
Commission (FTC) settled a fraud
case against Auctionsaver
for using online auction sites, including
eBay, to sell computer equipment that was never delivered.

Also part of the VeriSign agreement is an arrangement for eBay to hawk
in-demand domain names from company, which is also a domain-name registrar.
The service’s first offerings are .bz domains, including computers.bz and
cruise.bz.

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