Class of Online Vendors Unhappy With eBay

SAN JOSE (CN) - Online vendors complain in a federal class action that eBay takes their stuff offline after someone clicks the "Buy it Now" button, even if they do not actually buy it, and then refuses to refund their unexpired listing fees.

Lead plaintiff Luis Rosado says: "Sellers who list a 'Buy it Now' item on eBay pay to have the item listed at a particular 'fixed price' for a specific duration. ... To initiate the purchase of a 'Buy it Now' item, the buyer simply clicks the 'Buy it Now' button within the listing. When the 'Buy it Now' button is clicked, eBay automatically delists the item from the eBay website. However, eBay does not require the buyer to actually pay for the item before delisting it. As a result, the item is not actually sold at the time of the delisting. Consequently, if the sale does not occur, sellers are deprived of the benefit they paid for."

Rosado says, "in some instances, eBay will flag some transactions as potential fraud and command the seller not to complete the transaction. ... Although eBay's user agreement states that listing fees are nonrefundable, nowhere does eBay explain that it will automatically delist 'Buy it Now' listings whenever a prospective buyer clicks the 'Buy it Now' option regardless of whether or not payment is made. In addition, nowhere does eBay explain that it will command sellers to not complete certain transactions at eBay's sole discretion. ... A reasonable person would expect that in order to 'Buy it Now' and cause the item to be delisted, one would actually have to complete the transaction by purchasing the item.

"eBay also misleads sellers to believe that it will not become involved in transactions: 'We are not involved in the actual transaction between buyers and sellers.' However, as stated, despite this express statement, eBay does in fact regularly request that sellers not complete transactions if, for example, eBay suspects fraud. Even in such instances, eBay refuses to refund listing fees paid in connection with 'Buy it Now' items and refuses to credit sellers with the remaining time after the item was delisted."

Rosado says he tried to sell a car on eBay Motors: "Mr. Rosado first listed his vehicle for sale on February 8, 2011; he was charged a listing fee of $36 for 21 days and a picture fee of $0.25.

"Because Mr. Rosado's vehicle failed to sell, he re-listed it on March 1, 2011, again paying a $36 listing fee for 21 days.

"On March 8, 2011, the seventh day with fourteen (14) days remaining, a buyer indicated acceptance of plaintiff's sale of the vehicle by clicking on the 'Buy it Now' button. As a result, eBay automatically delisted the vehicle, thus preventing any other person from buying it.

"However, instead of purchasing the vehicle by depositing funds into plaintiff's PayPal account, the buyer requested that plaintiff cash a certified check for more than the purchase price of the vehicle and send the difference back to the buyer.

"Shortly thereafter, eBay sent an email to plaintiff informing him that the buyer was proposing a fraudulent transaction. eBay's email ordered Mr. Rosado not to complete the transaction, stating, 'Please don't complete the transaction and don't ship the item. You may have received an email saying the buyer has paid. However, that's probably a fake message.' ... Consequently, Mr. Rosado paid another $36 to list his car for a third time.

"When Mr. Rosado requested a refund on March 22, 2011, eBay agreed to provide a credit of $4.25, a small fraction of the fees he had paid."

According to the complaint, eBay, founded in 1995, "is the world's largest online marketplace ... in 2011, the total value of goods sold on eBay was $68.6 billion - more than $2,100 every second."

Rosado seeks class certification and an injunction forcing eBay to change its member policy to include automatic refunds when a purchase is not completed, and actual and punitive damages for violations of California's False Advertising Act, the Consumer Legal Remedies Act and breach of contract.

He is represented by Jordan Lurie with of the Initiative Legal Group, of Los Angeles.

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