The eFencing Problem. It’s easy, it’s profitable, no wonder its growing fast.

Have you ever heard the term “eFencing”? It’s a growing problem as thieves are increasingly using the internet and online auctions to sell stolen property. Rather than use a traditional “fence” (note, a fence is an individual who knowingly buys stolen property for later resale in a (usually) legitimate market) like a pawnshop or a passersby on a street corner to unload stolen merchandise, many thieves are now cutting out the middle man and selling directly to you, the consumer. The internet and places like eBay make this a compelling alternative.

Here’s why…

1) Anonymity and safety.

                        Ø "There's no need for the pawnbroker. Internet auctions have suddenly become a really easy way to fence stuff," said Frank Dudley Berry Jr., who prosecutes high-tech crimes for the Santa Clara County district attorney's office.

Ø Rather than walk into a pawnshop (who is careful not to put their business at risk by buying stolen merchandise) or otherwise put themselves at risk by trying to drive around and unload large quantities of stolen goods all once, it’s much safer to just stay at home, sell the stolen product online and mail it piece by piece to unsuspecting buyers.

2) Profitability.

Ø Selling stolen goods or gift cards on eBay, a thief can typically net 60-80% of actual value. This compares to 10-20% at a pawnshop. With eBay, thieves can steal less, but make more.

3) Economies of Scale.

Ø Pawn shops are local, so a thief has a limit on how much merchandise they can unload each month. eBay is nationwide making it a virtually unlimited market.  This means small time petty thieves now have a way to scale into major problems.

4) Lower risk of being caught.

Ø “It would be impossible for us to be able to pinpoint a stolen good before it gets reported to us," Hani Durzy from eBay has said. "We don't own it. We don't ship it. We never handle it."  Unfortunately, because eBay’s policy is to not rigorously inspect or verify sellers to ensure they are legitimate and because they don’t police for this problem very effectively, the thief can easily set up shop with a low risk of being caught.

Ø Even if a buyer of a fenced item reports it to eBay and the seller’s eBay account is shut down, they can simply open another one and continue selling.

Unfortunately, the reach and anonymity of the Internet have helped turn online auctions into the newest way to fence stolen property. Places like eBay, Yahoo Auctions and even CraigsList where little verification of the seller is performed, create a great incentive for thieves to use them to unload stolen merchandise. Unless these venues change their approach and introduce effective seller screening and verification practices and hold these sellers accountable for their actions, there is little doubt the problem will continue to grow.

So, next time you get pick pocketed or your house is robbed, first call the police, but second, look for your stuff on eBay. With eFencing so easy to do and with so little downside risk, you just might find it there.

For more on eFencing, a recent article from NBC can be found here.

Comments

[Screaming Stone]

YES!! Thank you for covering eFencing - it is a massive and growing problem - especially with music instruments. My custom guitar was stolen - I tried posting a stolen notice on Craigslist only to have my post flagged and deleted - over 300 times! I contacted CL legal and they did nothing.

So I'm dong something - I started posting stolen music instrument info on my site screamingstone.com.

Please spread the word about the stolen instrument list - and thx again for writing on this total BS situation.

Rock on.

[Blind Auctions Article]

Great eBay article!!! Here's another eBay article from eZine that you might want to check about eBay marketing.

http://ezinearticles.com/?Marketing-Your-eBay-Based-Business&id=393734