Under an agreement with the Pennsylvania Bureau of Consumer Protection, Jamison Piatt will reimburse more than $2,600 to 29 consumers, deliver two Furbys to one buyer instead of a refund, pay $1,000 in fines and legal costs, and reimburse any additional consumers who file complaints in the next 90 days.
The case highlights the pitfalls of online auctions, which have become extremely popular in recent months.
Of the 33 consumers who bought Furbys from Piatt, of Mocanaqua, Pennsylvania, between December 15 and December 18 of last year, fewer than 10 received what they had paid for, said Barbara Petito of the attorney general's office. Piatt, who goes by several aliases, claimed to have more than 1,500 Furbys for sale and promised delivery by Christmas.
"This alleged scam affected consumers from coast to coast who were desperate to get their hands on a Furby, considered the hottest toy this past Christmas shopping season," Fisher said in a statement.
The allegedly defrauded buyers met in an eBay chat room, compared notes, and filed a complaint with the attorney general, who found Piatt through a rented mailbox in Shickshinny, Pennsylvania.
Piatt must also seek permission from Fisher's office to conduct any mail order, Internet, or similar business. If Piatt fails to comply with the agreement, he may face contempt of court charges, Petito said.
eBay said it had been working with law enforcement on the Piatt case, but only learned of the Pennsylvania action today. Company spokeswoman Kristin Seuell declined to name the law enforcement agency eBay had contacted.
"We applaud the Pennsylvania attorney general's office for resolving this case on behalf of eBay," Seuell said.
Last week, eBay announced its updated Safe Harbor program to help users ensure the authenticity of a transaction. Ebay now offers $200 insurance free of charge for all transactions on its site and will soon give "Verified eBay User" status to those willing to provide additional identifying information, such as Social Security number and a driver's license.
According to Seuell, fraud on eBay is"very, very rare," making up about 27 of every 1 million transactions. When they do occur, she added, those affected should notify both eBay and their local, state or federal law enforcement agency.
But fraud comes in many forms, warned Mark Dodd, who runs the AuctionWatch Web site, where dissatisfied auction users often post complaints.
"Are they only focusing on criminal complaints filed to agencies or to eBay? And how many go unnoticed or unreported?" he wondered.