Yahoo Japan reports drastic reduction in online auction fraud

Yahoo Japan reports drastic reduction in online auction fraud
Kyodo News
Sunday, Jan. 6, 2008

Yahoo Japan Corp., operator of Japan's largest online auction site, said auction fraud has plunged sharply following enhanced ID checks and other steps it has taken to clean up the risky service.
The Tokyo-based company said it reduced criminal damages reported in 2007 to about 10 percent of damages reported in 2005 — its worst year ever for auction fraud.
In the first nine months of 2007, Yahoo Japan paid around ¥90 million in compensation to winning bidders on Yahoo Auction who claimed they did not receive the items offered for sale, down from the peak of around ¥870 million it paid in the same period in 2005.
The auction site operator says it offers 80 percent of the winning bid in compensation unless there is a lapse on the part of the bidder and that the amount of compensation "changes in tandem with the value of fraud damage."
The compensation paid in the corresponding period in 2006 came to roughly ¥440 million, it said.
In November alone, a total of around 12 million items were put up for sale on Japan's four major Internet auction sites, with just over 10 million of them offered on Yahoo Auction, according to Tokyo-based Aucfan Co., which runs a Web site that compares auction sites.
Among other steps, Yahoo Japan has been requiring the presentation of an ID bearing an address from potential auction participants. The address is required for delivery of a registration password.
About 200 staffers are keeping a watch on suspicious items, such as a block sale offer of 10 PCs by a person with no history of selling on the site, it says.