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ORC 4-4-12



2012 Archives

Kirkwood, Mo., police bust ORC fencing operation that hired drug addicts to steal merchandise from retailers. Detective Dave Smith said warrants are pending for receiving and possessing stolen property on a man in his 50s who was arrested after he allegedly hired drug addicts dependent on heroin to steal merchandise from area businesses. Various retailers, most of which were big box stores such as Target, TJ Maxx, Shop-N-Save and Walmart, were targeted by the thieves on an almost daily basis, Smith said. One allegedly posed as a store employee in uniform to gain access to the rear stock rooms of one of the businesses to commit thefts, Smith said. The investigation is still ongoing. (Source (source

Excerpts from GAO-11-675:  Efforts to Combat Organized Retail Crime

The U.S. Government Accountability Office ORC report June 2011

Leading Online Marketplaces Have Taken Steps to Combat e-Fencing, but It Is Unclear If Additional Federal Action Is Warranted

eBay, the Largest Online Marketplace, Has Recently Taken Steps to Deter e-Fencing, but Varying Business Models and Available Resources Impact Efforts of Other Online Marketplaces

Continued from yesterday

eBay has also created tools to aid in providing law enforcement with access to information. eBay’s Law Enforcement Portal allows state, local, and federal law enforcement to request information from eBay on users suspected of selling stolen merchandise. The company allows all vetted LE agencies to use the Portal to investigate possible illegal activity on the site, including the sale of stolen goods, and eBay reviews all requests to ensure they comply with eBay’s privacy policy. According to eBay officials, it approves about 99 percent of requests, responding within 48 hours with the name, address, Internet Protocol (IP) and email addresses, any additional contact information, shipping information, listing and sales data, and user history over the last 2 years. In 2010, eBay received 603 requests through the portal. eBay also built the Law Enforcement eRequest System to allow law enforcement to submit requests for information and court orders electronically. Since inception in November 2010, 1,601 requests or court orders have been submitted by law enforcement in North America. Additionally, all law enforcement can access eBay information through LeadsOnline, an online, property-crimes database. eBay provides access to listing and sales data through LeadsOnline automatically, providing law enforcement with another investigative tool. Through the database, law enforcement users of the system can get basic seller information from the past 3 months. In 2010, 2,090 law enforcement agencies conducted 12,990 eBay related searches on LeadsOnline. For more detailed information, law enforcement agencies are to contact eBay directly.

In addition to its retail and law enforcement efforts, eBay has also implemented and improved a series of procedures designed to verify seller information, proactively flag suspicious listings, and further protect buyers. These efforts are independent of retailer or law enforcement requests. These efforts include:

• Enhanced seller vetting: Starting in October 2010, eBay verifies users’ names, addresses, and phone numbers, and restricts new seller activity until the seller builds a good business record on eBay.

• Filters: eBay utilizes thousands of rule-based filters that search for suspicious listings. Filter variables can be seller based (financial, user information, feedback), item based (category, pricing, keywords), or risk based (internal losses, risk models).

• Exception reporting: eBay runs 17 monthly exception reports on over 100 categories of commonly stolen products such as gift cards, health and beauty aids, and infant formula. These reports are designed to identify sellers who may have a high volume of sales in several retail high-theft categories for further review or monitoring by eBay. From January 2010 through March 2011, eBay has proactively reviewed 490 sellers, 237 of which were deemed "bad actors," compared with 2,870 requests received from retailers and law enforcement, 220 of which were deemed "bad actors."

• Payment holds: Through PayPal, eBay has instituted a 21-day hold on funds to new accounts so that proceeds from the sale of merchandise are not available until the hold expires. eBay believes this is an effective deterrent to the listing of stolen merchandise online as thieves generally look for a quick way to convert merchandise into money.

• Seller messaging: To remind sellers of eBay’s rules related to certain products, such as infant formula, eBay provides specific messaging if a seller is trying to list the product. For example, sellers of infant formula are reminded that they must include the expiration date of the formula in the listing and that it is against eBay’s policies to sell expired infant formula. These efforts are intended to protect consumers from purchasing potentially expired products but may also provide an additional deterrent to those knowingly selling expired products.

Retailers and law enforcement alike indicated that eBay’s recent efforts have been effective at facilitating information sharing during ORC investigations. Three of the 5 retailers and 6 of the 10 state and local law enforcement agencies we interviewed are members of their respective eBay programs, as are members of FBI and ICE. Several indicated that the company is timely and effective in providing requested user information, and both groups commented that eBay’s commitment to information sharing is a significant change from a more contentious relationship previously. eBay’s recent efforts to increase its cooperation with retailers and law enforcement have been voluntary on the part of the company. Several retailers, and eBay itself, credited its Senior Director of Global Asset Protection—an individual with a retail loss prevention background—with developing the more open environment at eBay. Two retailers we interviewed—one PROACT member and one non-member—as well as two retail associations, cited specific concerns about eBay’s maintaining its long–term corporate commitment to the PROACT program. In response, eBay officials reiterated the company’s long-term commitment to PROACT, noting that the program maintains buy-in from senior corporate officers and is part of a larger effort to enhance working relationships with retailers.

Continued tomorrow

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