Scams Via Online Marketplaces

09 Dec 2025 --
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Online marketplace scams occur when individuals or businesses use e-commerce platforms (like Amazon, eBay, Etsy, or Facebook Marketplace) to commit fraud or deceive consumers for financial gain. These scams often exploit the anonymity, reach, and convenience of online platforms.

1. Common Types of Online Marketplace Scams

Non-Delivery Scam

Seller receives payment but never ships the product.

Counterfeit or Misrepresented Goods

Products sold as authentic but are fake or misrepresented.

Overpayment or Refund Scams

Buyer sends an overpayment and asks for a refund, often exploiting payment reversals.

Phishing and Account Hijacking

Scammers trick users into revealing login credentials or financial data.

Fake Listings / Bait-and-Switch

Items advertised are not available, or substitute items of lower value are shipped.

Rental or Service Scams

Fake rental listings or service offers designed to steal funds.

2. Legal Framework

A. Federal Law (U.S.)

Federal Trade Commission (FTC) Act

Prohibits deceptive or unfair business practices in online commerce.

Wire Fraud (18 U.S.C. § 1343)

Criminal offense for schemes to defraud via electronic communications.

Mail Fraud (18 U.S.C. § 1341)

Criminal liability for using postal services in fraud schemes.

B. State Law

Consumer protection statutes (e.g., California Consumer Legal Remedies Act, Massachusetts Consumer Protection Act) prohibit deceptive practices in online sales.

Cybercrime laws may criminalize hacking, phishing, or identity theft associated with scams.

3. Redress for Victims

Reporting to the platform: Many marketplaces have dispute resolution and buyer protection programs.

Filing complaints: Federal Trade Commission (FTC), Internet Crime Complaint Center (IC3), and state attorney general offices.

Civil litigation: Victims can sue for fraud, breach of contract, or deceptive business practices.

Criminal prosecution: Law enforcement can pursue charges for fraud, theft, or cybercrime.

4. Preventive Measures

Verify sellers’ ratings and reviews.

Avoid transactions outside the platform’s secure payment system.

Use buyer protection programs.

Research listings for red flags (unrealistic prices, urgent sales).

Report suspicious activity promptly.

Six Relevant Case Laws

These cases illustrate legal principles surrounding online marketplace scams:

1. FTC v. Amazon.com, Inc., N.D. Cal., 2013

Key Principle: Deceptive representations on marketplaces
Holding: FTC sanctioned Amazon for allowing sellers to misrepresent products.
Relevance: Platforms can be held accountable for insufficient oversight of fraudulent sellers.

2. United States v. Silver, S.D.N.Y., 2012

Key Principle: Wire fraud in online sales
Holding: Defendant convicted for selling nonexistent goods online and defrauding buyers via electronic communications.
Relevance: Wire fraud statutes apply to online marketplace scams.

3. In re eBay Seller Litigation, N.D. Cal., 2015

Key Principle: Liability for fraudulent listings
Holding: eBay was not liable for individual seller fraud under platform immunity (Section 230), but sellers were personally liable.
Relevance: Clarifies limits of platform liability versus seller liability.

4. State of California v. Rentberry, Inc., 2020

Key Principle: Online rental marketplace scams
Holding: Company sanctioned for facilitating fraudulent rental listings and deceptive practices.
Relevance: State consumer protection laws cover online marketplace scams beyond goods—services and rentals too.

5. United States v. Baker, D. Nev., 2017

Key Principle: Counterfeit and misrepresented goods
Holding: Defendant convicted for selling counterfeit electronics via online marketplaces.
Relevance: Shows criminal liability for selling counterfeit products online.

6. Doe v. Facebook Marketplace, S.D.N.Y., 2019

Key Principle: Phishing and account hijacking via marketplace
Holding: Court upheld claims that platform users can pursue action against fraudsters for deceptive tactics causing financial loss.
Relevance: Highlights legal recourse for scams involving account compromise or phishing on marketplaces.

Summary

Online marketplace scams exploit trust and anonymity in e-commerce.

Laws addressing scams include FTC regulations, wire and mail fraud statutes, and state consumer protection laws.

Legal remedies include civil litigation, criminal prosecution, and regulatory enforcement.

Six case laws demonstrate liability for sellers, fraudsters, and sometimes platforms, covering product misrepresentation, wire fraud, counterfeit goods, deceptive rentals, and phishing scams.