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eBay to scrutinize travel sellers

Though the online auction giant has said it will use an authentication system to screen all sellers, the company will hold merchants of travel goods to even tougher standards.

In what will be an unprecedented move, eBay next month will require sellers of airline tickets, lodging and vacation packages to undergo a rigorous review process to continue doing business on the auction site.

The company has also issued new guidelines on who is eligible to sell travel products, eBay spokesman Kevin Pursglove said. SquareTrade, a company that certifies sellers, will oversee the process of verifying information, which eBay said could take two to five days.

"We're making sellers go a few extra steps so that bidders can be confident that they are purchasing from a legitimate travel company," Pursglove said.

Under the guidelines, someone selling lodging on eBay must be either an employee of a company that offers lodging or must own the property. Auctioneers of airline tickets and vacation packages must also work for a travel company.

"Your personal contact information and ownership rights will be verified," eBay said in a statement.

The new screening of auctioneers is part of an eBay campaign to rid the site of con artists. Statistically, fraud is a small problem on eBay, but buyers say it is one of their biggest concerns.

eBay announced this week that in June it plans to begin using an authentication process that aims to screen all sellers. The service will access databases of phone numbers, addresses and credit reports to verify that sellers are who they say.

But the reason eBay is holding travel sellers to tougher standards is because of the amount of fraud in the company's travel area, a source close to the company said.

For example, the source said, a person has sold a travel package on eBay in which although the airline ticket was valid, when the buyer "goes looking for the hotel room, they find out that the seller never booked the rooms, much less paid for it."

Promising cut-rate deals on colorful vacation packages has been a favorite scam of con artists for decades, says Henry Harteveldt, a travel analyst with research company Forrester Research.

In the offline world, fraudsters would take out small advertisements in newspapers offering unheard of prices on vacation deals. They would then tell a would-be buyer over the phone that the airline tickets were waiting for them at the airport.

"Of course, the tickets weren't there," Harteveldt said.

Harteveldt commended eBay, saying that anything the company can do to reassure members is a move in the right direction.

"The last thing eBay needs is a bunch of scam artists ripping people off," he said. "Word would spread that you shouldn't shop for travel there if they didn't...This is like Raid bug spray for con men."

Another reason why eBay may want a squeaky-clean travel area is that the company is planning to raise its profile in that sector. The company is wooing airlines and hotel companies, the source said, but the source did not know what kind of deals eBay has in mind.

In February, eBay agreed to allow Priceline to sell travel services on the auction site. The name-your-own-price travel e-tailer also has a search engine on eBay's site that looks up travel fares.

Some of eBay's biggest e-commerce competitors have raised their profiles in online travel, one of the few e-tailing industries that are flourishing.

Web superstore Amazon.com agreed last year to jointly operate a travel site with online travel companies Expedia and Hotwire.

eBay's new requirements only pertain to the site's Travel section, the company said in a statement on the site. Those sellers that don't meet the requirements will not be prevented from selling other types of goods.

Current travel sellers have until May 27 to submit their application in order to be eligible to do business by the June 3 deadline. Sellers must also pay SquareTrade, the verifying company, a $10 fee for the initial application process and a monthly fee of $7.50 after that.