Saturday, April 20, 2013

Be Careful Buying on eBay

First, you already know that saying "be careful buying on eBay" is like saying. "be careful jumping out of airplanes."  Of course you should be careful buying on eBay.  This week I learned about Yet Another thing to be careful of, and it's one that eBay could stop, and would stop if they wanted to protect buyers.  At least as of now, they haven't.  I'm surprised because, without buyers, there'd be no eBay, and I'm sure they're smart enough to know it. If you buy on eBay, and you think this looks too long to read or you already know all about this matter, skip down to Why This is eBay's Fault.

It all started with something I read on the Popehat blog.  Before I get into the details, it is only fair to warn you that Popehat is like crack cocaine; once you try it, you won't be able to stop.

Tale of an eBay Bully

Earlier in the week I read, on Popehat, the tale of Richard A. Radey. Mr. Radey sells used medical equipment on eBay under the name med_express_sales.  Radey and Med Express Sales have very high feedback scores.  The reason is that Radey sues people who have the temerity to leave negative, or even neutral feedback, even if the feedback is clearly truthful.  There's a summary in the Popehat article linked above.  If you want the gory details, you can go the to Clerk of Courts page for Medina County.  After you agree to their terms, type "Med Express" into the business name block and click the search button.  You will likely very quickly form the opinion, as I did, that Radey, in the name of his company, Med Express Sales, is a thug and legal bully.  I'll leave it for you to decide whether Radey made, in his words, "alot" of honest mistakes with postage, or whether he was chiseling the Postal Service out of a buck or so on some packages and letting his customers take the consequences.  You can gauge Radey's truthfulness like this: Read one of the suits he has filed.  It, like the others he has filed, contains a signed statement, made under oath and notarized, stating that he had read the allegations in the suit and believes them to be true. (It's on the fourth page of the PDF document.)  Radey got called out after (accidentally) picking on someone his own size and published a not-pology on Paul Alan Levy's blog in which he attempts to throw his lawyer under a bus by claiming he, Radey, hadn't read the lawsuit.  Both statements cannot be true.

Radey and Med Express Sales are (mis)using the law to silence truthful criticism.  They've gotten away with it many times in the past (see the Medina County court records for the definition of "many") because even someone who is clearly right must defend against bogus suits like Radey's or face a default judgement by the court.  "Defend" means hiring or otherwise arranging for a lawyer in Ohio, having the lawyer file responses to the suit, and potentially traveling to Ohio to testify at a trial.  "Default judgement" means the person who filed the suit wins, only because you didn't defend yourself.  The court can make a monetary award that the defendant is (probably; I am not a lawyer) legally required to pay.  Many of the people who buy on eBay cannot afford to hire lawyers in other states or take the time and money to travel there.  So, the bullies win.

The Bully Meets Someone His Own Size

In the case written about on Popehat, Richard Radey and Med Express Sales picked on someone who could defend herself.  They sued Amy Nicholls of South Carolina.  Doubtless Radey thought he was safe; it's a full day's drive from South Carolina to northern Ohio.  He may have thought somebody from the South wouldn't know what to do about such a suit anyway.  (Full disclosure: I'm a Southerner.)

Surprise! Nicholls knew not to ignore Radey's meritless suit and knew how to get effective legal representation. She's now represented by three very public-spirited attorneys.   Nicholls' lawyers have filed an answer and counterclaim to Radey's meritless suit.  The counterclaim asks Radey and Med Express Sales to pay Nicholls' lawyers and also asks for punitive or exemplary damages.  Radey, in his not-pology, wrote, "I am instructing our attorneys to drop the lawsuit."  Double-surprise! Because of the counterclaim, Radey and his lawyer can't just ask the court to dismiss the case and make everything go away unless Nicholls gives permission.  Without her consent, Radey is going to have to explain his conduct to a judge and explain why he should not be required to pay Nicholls' lawyers and also pay punitive and exemplary  damages.

Beyond that, Richard A. Radey and Med Express sales have discovered the Streisand Effect.  I am probably the hundredth (or more) and possibly the least influential person to write about this case.

That's where things stand on the beautiful spring Saturday on which I'm writing this.  Ken White at Popehat is certainly keeping an eye on things and, if you weren't hooked before you clicked the Popehat link, you are now, so you'll know how it comes out before I do.

Why this is eBay's Fault

So far, this is an interesting story of a bully and someone who stood up to him.  The real story is that this abuse of eBay buyers is eBay's fault. You can read eBay's User Agreement here:  It's long and legalistic, but the fourth major heading, Abusing eBay, gives eBay the right to terminate the account of anyone who violates the user agreement.

EBay also has a policy on feedback extortion.  It is less legalistic, and to my non-legal mind, less clear, but it seems pretty obvious that eBay doesn't want either buyers or sellers threatening each other in order to get positive feedback.  And that seems like a good thing to me.

My first thought on reading the saga of Richard Radey was, "Good.  Now eBay will find out about his behavior and kick him out for feedback extortion."  Didn't happen, at least not yet.

Astonishing as it may seem Radey sued eBay as well as the people leaving negative or neutral feedback. When you sue someone, you must serve them with notice of the lawsuit, and there are legal requirements that describe what "serve notice" means  One cannot just plop the notice of suit "in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying, ‘Beware of the Leopard.’" 

Lawyers who have written about this case have said that eBay almost certainly could not lose such a suit because of the provisions of Section 230 of the Communications Decency Act.  In at least one case Radey dropped eBay from the suit after filing.  It doesn't matter.  The point is that eBay had to know that Radey was behaving this way, and they failed to act to protect their buyers. All the blame for the first such suit falls on Radey.  EBay could have acted, within the User Agreement, to protect the rest of the buyers, and they didn't.

Bottom line: as things stand today, eBay has not protected buyers from at least one bullying and litigious seller.

Protecting Yourself

Partial screen shot showing revised feedback line.If eBay won't protect you from bullying, you will have to protect yourself.  Look at the eBay feedback report for med_express_sales. At the right side of the screen, under the tabs for "Feedback as Seller," etc. and just above the pulldown for setting the search period, there's the line, "Revised feedback" followed by a number.  I had never noticed it before, but I now realize that if it is greater than zero or maybe one, it literally screams Danger!  People may make mistakes in feedback, and maybe a negative feedback has caused a seller to reconsider a disputed point.  So, the number might be greater than zero even for an honest seller doing a good job.  However, as things stand today, that number is at least as important as the negative and neutral feedback numbers, maybe more important.

I do not know whether the revised feedback number for Richard Radey includes people he sued and whose feedback eBay removed under court order, or only people whom he bullied into changing their feedback without suing them.  The real number might be greater than eight.

While I am on the subject of advice, my general advice to eBay buyers is to shun any seller with a feedback score of less than 99%.  I now realize that's even more important than I previously thought because feedback scores can be inflated through bullying.

My other bit of advice is to read the negative feedback.  Some buyers are just cranky or spiteful and their feedback should be discounted.  If you actually read the negative feedback and the seller's responses, it will usually be pretty easy to decide whether that feedback is truly an important consideration.

Finally, if you are served with notice of a suit against you, you need a lawyer.  You cannot make that kind of problem go away by ignoring it.

Saturday, April 13, 2013

Don't Lend Money to the IRS; Cut Refund Fraud Risk

If you're getting a tax refund, you have given Uncle Sam an interest-free loan. Use the IRS withholding calculator to adjust your withholding so that you expect a refund of less than $100. The calculator is here:

Now open a savings account at your bank and set up an automatic transfer for the day after every payday in an amount equal to what you cut off your withholding. Your "take-home pay" will be exactly what it was before, it's just that you keep the money, not the IRS. You gain three things from doing this: 1) You start building up a cushion of cash that's available any time, not just at tax refund time. 2) You will earn a tiny bit of interest on the money you are saving. Interest rates are at historic lows, but I still earned enough to buy some tacos and a margarita. 3) You will start to consider that money as "savings," not as a windfall, and you'll be less likely to blow it on something you don't really need.

There's another reason, possibly even more important, to minimize your refund: identity theft refund fraud. The crooks get one's name and Social Security number, file an authentic-looking tax return with a bogus address, and steal your refund.  Worst of all, when you file your own, authentic refund, it's rejected.  You might even incur late filing or late payment penalties if you haven't documented carefully!  If you're getting a small refund, you've dodged any late payment penalty, and perhaps late filing penalties.  And the crooks won't get more than that hundred or so dollars.  Refund fraud through identity theft is a real threat.  The Wall Street Journal (April 13, 2013, p. A-15) says this type of fraud is up 650% since 2008.  There were over 650,000 cases outstanding in 2012, and such a case often takes six or more months to resolve.

Early every October, use the withholding calculator again to be sure you're going to get about $100 back when you file. Getting a small refund sets up a "safe harbor" in case you come into some extra money next year that causes you to have to pay Uncle instead of the reverse. (I'm not a tax lawyer, and this isn't tax advice; just common sense.)

Best of all, you can blow that $100 refund on a memorable dinner or an outstanding bottle of wine guilt-free, because most of what you would have lent Uncle interest-free is safely in your bank.