"Need to Know" reports on the matrix sites

[MatrixWatch]

www.NTK.net, or as they are more commonly known, "Need to Know" just did a quick feature on those nasty matrix auctions on eBay that we are all too familiar with. As far as I have been informed, we are the only site dedicated to fighting these scam auctions, although there are other people on the eBay forums who report them as well. Here is the link:

http://www.ntk.net/2004/02/06/


>> HARD NEWS <<
not what accrues

In accordance with NTK prophecy: the BBC's Scambusters TV show
was a somewhat toothless investigation where they played dumb
pranks on Nigerian fraudsters and didn't really delve into the
mechanics of pyramid-style schemes. Which is a shame, because
the latter are really taking off thanks to the net's rapid
spread of information and increasing acceptability of online
payment systems. Search for "iPod" by price on eBay.co.uk, and
you get a lot of "40GB for UKP20" offers, many linking to those
sites where you pay your money to get onto a list (sometimes
called a "matrix"), and apparently receive your gadget after a
certain number of other people join up, who then get theirs
after their quota join, and so on. The way they're classically
structured, however, means the number of new bargain-hunters
required to chip in increases linearly for each additional
joiner (try it with letters of the alphabet to check), so even
a favourable-looking 4:1 joiner:payout ratio means that, say,
the 10th member will be waiting for 33 others to sign up
before getting anything (or, more likely, everyone gives up).
We don't know what makes us angrier: the lack of mathematical
common-sense here, or the callous targeting of potential iPod
purchasers - by definition, an unusually suggestible and
vulnerable segment of society.

http://qwer.org/ebayUKiPodsByPrice.html
- probably a violation of eBay (and PayPal's) T&C's?

http://www.bbc.co.uk/watchdog/scambusters/programme_1.shtml
- best tip: "If it sounds too good to be true, it is"



The article focuses in upon the Ipod auctions. Hmm.. I wonder which site is behind all of those auctions?

[ycchen]

Originally posted by watchdog
The article focuses in upon the Ipod auctions. Hmm.. I wonder which site is behind all of those auctions?

IPOD sale at gotmatrix did pretty well in the past 2 months, but slow down as well. I found at least 3 gotmatrix ipod ebay auctions on ebay a few days ago. I am sure other matrix-site also sell this fasionable product.

[ycchen]

This is a CONFIRMED gotmatrix auction on ebay by seller: infamous33319

S/he has 3 eBay auctions on IPOD

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=41002&item=3078697663

[ycchen]

More news on IPOD scam on eBay. The disucssion below the article is also interesting.


http://www.geek.com/news/geeknews/2004Feb/gee20040212023837.htm

iPod scam swamping eBay
Pyramid scheme hits the auction site
--------------------------------------------------------------------------------
posted 10:57am EST Thu Feb 12 2004 - submitted by Matthew
NEWS
eBay is currently being swamped with a range of surprisingly cheap offers on Apple's iPod and other desirable electronics, such as games consoles and mobile phones. The reason why the devices are so cheap is because the whole thing is just a way of getting people to sign up for a "matrix" scheme, a new form of pyramid scheme.

If you actually go to eBay and inquire about one of these super-cheap products, you are told by the seller not to bid on the item, but instead to go to another website. These websites then ask you to sign up and buy products from them, and in return give you a free gift such as an iPod. The free gift is not sent to you straight away, though; your name goes on a list and you are required to get more people to sign up. As they do your name goes up the list, and when it reaches the top you get your iPod. Pyramid schemes such as this are an illegal practice, and are always doomed to failure (leaving the victims with nothing) based on the way in which they work--there just aren't enough people in the world for everyone to get enough people signed up to get something.

eBay has now become the front for people recruiting others to get their free gifts. eBay sees this as insignificant when you consider the number of scams in relation to the 20 million or so legitimate auctions that occur daily.

Read more at Wired News (http://www.wired.com/news/culture/0,1284,62226,00.html)


MATTHEW'S OPINION
Pyramid schemes, as the Wired article states, are an illegal activity, so eBay turning a blind eye as long as the auction is classified correctly is not good enough. People aren't told about the scheme until after they purchase an item, and so are subject to the scam. The fact that people are directed to a website instead of bidding on an item means that this is potentially not an eBay problem if the auctioned item actually does sell or is removed from sale. That makes this a more difficult issue to resolve.

Most people will just realize that something isn't right and go elsewhere, but if people continue to fall for this scam then eBay may be in line for some legal action from disgruntled customers. eBay is a company that makes money from others selling through its service. The auctions that occur are based on a certain amount of trust between the two parties as money is exchanged and items sent.

To improve this process eBay classifies sellers using the feedback system and completed auction counter next to the seller's name. If someone with a high auction count and good feedback is involved in this scam then it could be argued that eBay is somehow endorsing the scam by allowing the seller to have a trustworthy status. I realize this is grasping at straws, but it could be used against eBay if action were ever taken.

Regardless of whether the problem is or isn't eBay's, the site should still take action. It's providing a service, and this scam is manipulating that service to make money illegally. Therefore in my eyes it is an eBay problem.