Hello folks,

As many of our long-time followers know, Carolyn and I volunteer our time to manage the Conrail Shoppe, the online store of The Conrail Historical Society. We are often packing and shipping Shoppe orders right alongside our own orders for The Garbely Publishing Company.

This is a public service announcement regarding a recent and complex scam that has affected our Conrail Shoppe operations and may also impact The Garbely Publishing Company's customers and, more directly, our dealers.

We have discovered a new online scam that seems to target the railroad hobby, where the scammer places legitimate-seeming orders with a merchant, has the products drop-shipped to a third-party buyer (unbeknownst to the merchant), and then issues chargebacks against the merchant after the product is delivered.

Even if you’re not a frequent user of our online store, this scam could possibly affect anyone selling nearly any product in any market, so it’s something that should be watched for vigilantly and reported to the proper authorities.

On June 16th, the Conrail Shoppe received a chargeback on an order that had been placed on June 4th for a single book. We were puzzled, as the book had been shipped and was delivered to the customer (one of our CRHS members and a regular Shoppe customer) on June 9th. Why, a week later, did the customer initiate a chargeback instead of requesting a refund?

We attempted to contact the customer using the phone number and email provided with the order, and found both to be disconnected/invalid – which was strange, because we knew the name and address to be correct. Since the purchaser was a CRHS member, we referred to the contact information on our membership roster and found that the phone and email differed from those on the order. Using the phone number from our membership roster, we were able to contact the member who had placed the order.

The member relayed to us that he found it strange when the book arrived with a Conrail Shoppe return address, as he had placed the order through eBay. However, he assumed that perhaps the CRHS had an eBay store and didn’t think much of it.

The CRHS does NOT have an eBay store, so this raised some immediate concerns. The customer provided the eBay username for the seller of the book, and suddenly the whole scam began to unravel.

It turns out that the eBay seller is listing and selling railroad books and memorabilia at significantly discounted rates (like 50% off list) to make them extremely enticing to buyers, undercutting dealers that sell at traditional margins by suggesting that the items were part of an estate sale or otherwise.

When an item sells, this eBay seller turns around and orders that item from a dealer – in this case, the Conrail Shoppe – and uses the buyer’s name and shipping address so that the dealer will ship the product directly to the customer. However, the eBay seller also enters false phone and email information so the dealer has no way to contact the buyer directly if issues arise, but the order appears to be valid for the purposes of fulfillment. When the dealer ships the item, the eBay seller inputs the shipping/tracking data provided by the dealer, so the shipment is valid as far as eBay is concerned. Essentially, the eBay seller hides their own involvement from the dealer, and also hides the dealer's involvement from the buyer.

After several orders have been placed with a variety of dealers to fulfill the eBay orders and the products have been delivered to the buyers, the eBay seller then reports the entire series of purchases as fraudulent, pointing to the bogus phone numbers and email addresses and the multitude of shipping addresses as evidence for their credit card company.

The credit card company, presented with evidence that in any other circumstance would set off their fraud detectors anyway, quickly issues chargebacks for all of the “fraudulent” transactions. In reality, these were the transactions where the eBay seller purchased the products from dealers like the Conrail Shoppe.

By issuing chargebacks, the eBay seller is able to recover all of his expenses from the products he purchased from various dealers.

Since the buyer was not involved in this transaction between the eBay seller and the dealer, they receive no notification that any chargeback or dispute is occurring, leaving the entire transaction appearing complete and “above board” from their perspective. The eBay seller keeps the money they acquired from the initial eBay sale and also recovers the money they spent to acquire the product.

Meanwhile, the dealer (the Shoppe) has no proof that the transaction charged to the eBay seller’s credit card was valid, because all of the information on the order entered by the eBay seller references the buyer. To the credit card company, it appears that we charged the eBay seller’s credit card fraudulently and sent the item to someone else.

The dealer would have no way to prove that the eBay seller actually placed the order, and we therefore could not dispute the chargeback…… until now.

The eBay seller made a critical mistake in selling a book to a CRHS member for which we had the proper contact information. We are now equipped with documentation from both the dealer (the Shoppe) and the buyer (our member) to help eBay, PayPal, and the credit card company piece together the above scenario.

We will be working on this with the proper authorities over the coming weeks to put an end to this scam for good.

In the meantime, we implore our customers to use caution when shopping on eBay. Beware of recently-created accounts with minimal feedback, very generic product descriptions (or descriptions lifted from other sites, and/or too-good-to-be-true pricing.

We are also urging our dealers to exercise extreme caution in the fulfilment of orders. Based on the feedback in the eBay seller's account, we know that the dealer sold at least one GPCo title under this ruse. We have confirmed that the book was not shipped by us, so it must have come from one of the dealers of our products that was scammed in a similar manner. If you are a dealer that recently received a chargeback on a GPCo book purchase, please reach out to us!

For the foreseeable future, for any orders that appear suspicious, we will contact the customer by phone or email before shipping. We apologize for any inconvenience this might cause for our customers.

Thank you for understanding, and we hope to report back soon with positive results!

Sincerely,
Rudy Garbely
GPCo President

Reported on Trains Magazine newswire: https://www.trains.com/trn/news-reviews ... ebay-scam/

I am an active ebay user, mainly because the shipping price is always available and you don't need to go all the way to the end of the transaction to find it out, as does Amazon. In fact, Amazon sells things on ebay using fake names with free shipping (you can usually tell because the seller will have ratings in the tens of thousands, and the item shows up in an Amazon box shipped from an Amazon location). But recently I have had problems with sellers backing out saying the item was broken only to be relisted at a higher price later, and the address for these sellers tends to be outside the US though the item is listed as inside the US (it will say "locations throughout the US". I recently ordered something common, had it cancelled by a seller outside the US but locations throughout the US, reordered from another seller with locations throughout the US, had it show up in a Home Depot box from a Home Depot address, at quite a bit less than the price would be on the Home Depot website or in a store, which makes me wonder if this fraudulent practice is common. I will not be buying anything from sellers with "locations throughout the US" for sure.