L
lexondre
Guest
I am a small business owner who is currently in midst of entering trial on a criminal charge stemmed from operations on an e-commerce project ran 2001 via E-bay.
The felony charges are "theft by swindle", stating that there are 100 or so complaints confirming that consumer goods were purchased online and not received.
My business has ran smoothly since late 1996, when I began doing web sites for businesses while still in high school. I worked as a ad sales rep for a city newspaper while attending college and running my business on the side for 3 years. I left my day job and ran my business full time with new international trade contacts for digital media and consumer electronics.
The operation involving the charge ran between Late April-Early June 2001, selling Playstation 2 systems and accessories. My supplier had extended my company credit terms after a few smooth pre-paid transactions.
With credit payment terms with my supplier I began to increase daily sales volume only immediately liable for freight forwarding expenses, auction listings, and fees from US customs.
One week after increasing sales volume I had seeked out a communications center to handle the 6-700 emails and customer service calls daily.
My corporation was receiving 100-200 orders per day for E-bay auction listings only which were paid for buy winning bidders usually 2-5 days following auction close. My shipping terms were "10-12 business days following payment" for standard freight. These terms were listed in the auction offering.
I had pursued to organize a swift operation, hiring a distribution center to ship goods from supplier (to my customers), an assistant who was in charge of printing out order statements from my company's Paypal account (which were thereafter shipped to distribution center), a customs/freight agent at Emery Cargo, and the communication center which had the duty of customer support (via email and phone). My tasks consisted on accounting and purchase orders with supplier.
In mid-May my company's E-bay ID was suspended due to a complaint issued by a buyer whom had purchased an item from my company the day prior. The complaint was spurred by the buyers demand for product within 2-3 days. This was obviously not our policy as our auction listing specified 10-12 days. The buyer as well contacted other buyers from the previous/current day sales stating that my company was fraudulent and that they had ordered weeks prior and not received goods. This was obviously invalid as they had paid for their item only a day or so prior to placing the complaint. After explaining the situation to E-bay and providing a tracking number for the complaining party's order (which had been shipped rush delivery at our expense in attempt to cease anymore flagrant damage due to circumstance) my company's E-bay account was reinstated three days following the suspension.
Many customers whom had orders in transit had requested charge backs from Paypal which were never reversed despite the confirmed deliver status forwarded to them only days later. Many other paid customers from auction order placed less than 5 days prior had followed with charge back requests based upon the day old "hear say" notification from the first complaining party (who had at this point received their order weeks prior).
With hundreds of orders in limbo, some that were new and pending, some in transit, and some delivered but charged back a day or two before delivery things began to approach severe degrees. The communication center began being swamped with several hundred of emails and calls regarding the status of orders, most which were placed less than 3-7 days prior when order terms were still 10-12.
On numerous attempts I had tried contacting E-bay and Paypal in hopes to find a faster resolution to defeat the "snowball effect" that I was undergoing. No response except auto-replies and copy/paste responses from E-bay/Paypal operators (providing very little or no answer to my emails).
I had tried to keep up with "hot" customers by shipping orders from domestic wholesalers (whose pricing was much higher than what I purchased or sold the goods for to my customers) just to prevent fabricated slander to circulate due to complaining parties. There was no feasible way to decrease order transit time since goods were purchased in bulk once a week from overseas supplier (0-7 days), air freighted to distribution center (4-5 days), and shipped to customer (2-4 days). The truth is that some customer's orders would arrive to them sooner and others later, depending on when there payment was made (not exceeding specified order time frame, exceptional only on mail-in payments).
By early June I was losing revenue on charge back orders (that were actually delivered), auction listing fees (for buyers that reconsidered on finished transaction following notification on invalid claim from "hot" customer(s), customer service fees (for the high volume complaint inquiries along with standard fees), and Paypal system errors (for duplicate order statement files which were caught eventually by assistant and distribution center), and refunds requested by buyers who had paid for order, received email stating invalid claim, and reconsidered on order before ship deadline.
On June 6, 2001 my company's E-bay account was suspended again. The majority of the previous week's buyers whom had pending orders got scared after discovering this (some who had as well received email with invalid claims) charged back their payment or demanded a refund.
With several orders (some pending and others new) it was very difficult to resolve the matter fast enough to keep up with complaints. The communications center had decreased personal email replies and replaced them with auto-replies since my company was under major financial difficulties, not able to pay for full service as prior with the overwhelming customer inquiry volume in conjunction with no overhead to cover expenses.
By mid-June the communication center had discontinued service. I had contracted with an inexpensive answering service which kept account for any customer contacts for me to contact personally later.
I had been contacted by a Detective M. S****** of the (Hopkins, MN Police Dept) mid-June regarding 4-6 customer complaints related to my company's E-bay auctions. He for some odd reason was able to contact the management office of where had moved from months before and made initial contact with an ex-girlfriend at her new address. Not understanding why he contacted her (as the management office had my new contact details to where they would send my deposit return), I contact Detective S****** after receiving a relayed response from my mother, who had been contacted by my ex-girlfriend. Detective S****** opened the discussion with a blunt accusation to fraud committed by my company before asking me any questions, insisting that I schedule a meeting with him. I ask Detective S****** has he crossed referenced with Detective Carlson (who had visited the communication center following a few complaint call to find that the business operation were legitimate). I thereafter ask him for names of the complaints. Detective S****** refuses to provide with their names, saying that I should already know who they are. When I tell him that my company handles hundreds of orders weekly he makes remarks that I am only making excuses and most likely do not run a legitimate business.
Despite his lack of cooperation and attempt to thoroughly investigate complaints to support his remarks, I provide him with contacts and phone numbers to my freight forwarder, distribution manager, and a local Mail Box Etc. that was shipping rush orders to prove that my operations were indeed legitimate despite the current dis-functions. He contacts the Mail Box Etc. only to finds that there are goods as specified in E-bay offerings being shipped. M. S****** follows up a few days later still insisting that my activities are fraudulent and will not release names of the 5-6 complaints he had received.
July-September I am no longer on E-bay selling but thus previous transaction still replying to complaints, cross-referencing claims, and sending refunds to verified order cancellations. Early in July I have meeting with Better Business Bureau in attempt to collect all names of outstanding complaints and resolve matters since my Paypal account was frozen, not allowing me to login and retrieve customer order data any longer and no cooperation from Paypal to receive a list of total complaints.
As of August I was completely in debt, using net earnings from new business program to pay debts from former E-bay operation and still keep up with personal necessities (i.e; rent, food, child support). Personally resolving complaints one by one I begin to see hope towards resolving problem over time. Any complaint on file was notified with update on situation and settle any claim (if valid) over time. Most customers were accepting on these terms and understood my situation.
(continued.....see "Complicated E-Commerce Related Case Part 2" - had to cut short due to 10k word limit)
The felony charges are "theft by swindle", stating that there are 100 or so complaints confirming that consumer goods were purchased online and not received.
My business has ran smoothly since late 1996, when I began doing web sites for businesses while still in high school. I worked as a ad sales rep for a city newspaper while attending college and running my business on the side for 3 years. I left my day job and ran my business full time with new international trade contacts for digital media and consumer electronics.
The operation involving the charge ran between Late April-Early June 2001, selling Playstation 2 systems and accessories. My supplier had extended my company credit terms after a few smooth pre-paid transactions.
With credit payment terms with my supplier I began to increase daily sales volume only immediately liable for freight forwarding expenses, auction listings, and fees from US customs.
One week after increasing sales volume I had seeked out a communications center to handle the 6-700 emails and customer service calls daily.
My corporation was receiving 100-200 orders per day for E-bay auction listings only which were paid for buy winning bidders usually 2-5 days following auction close. My shipping terms were "10-12 business days following payment" for standard freight. These terms were listed in the auction offering.
I had pursued to organize a swift operation, hiring a distribution center to ship goods from supplier (to my customers), an assistant who was in charge of printing out order statements from my company's Paypal account (which were thereafter shipped to distribution center), a customs/freight agent at Emery Cargo, and the communication center which had the duty of customer support (via email and phone). My tasks consisted on accounting and purchase orders with supplier.
In mid-May my company's E-bay ID was suspended due to a complaint issued by a buyer whom had purchased an item from my company the day prior. The complaint was spurred by the buyers demand for product within 2-3 days. This was obviously not our policy as our auction listing specified 10-12 days. The buyer as well contacted other buyers from the previous/current day sales stating that my company was fraudulent and that they had ordered weeks prior and not received goods. This was obviously invalid as they had paid for their item only a day or so prior to placing the complaint. After explaining the situation to E-bay and providing a tracking number for the complaining party's order (which had been shipped rush delivery at our expense in attempt to cease anymore flagrant damage due to circumstance) my company's E-bay account was reinstated three days following the suspension.
Many customers whom had orders in transit had requested charge backs from Paypal which were never reversed despite the confirmed deliver status forwarded to them only days later. Many other paid customers from auction order placed less than 5 days prior had followed with charge back requests based upon the day old "hear say" notification from the first complaining party (who had at this point received their order weeks prior).
With hundreds of orders in limbo, some that were new and pending, some in transit, and some delivered but charged back a day or two before delivery things began to approach severe degrees. The communication center began being swamped with several hundred of emails and calls regarding the status of orders, most which were placed less than 3-7 days prior when order terms were still 10-12.
On numerous attempts I had tried contacting E-bay and Paypal in hopes to find a faster resolution to defeat the "snowball effect" that I was undergoing. No response except auto-replies and copy/paste responses from E-bay/Paypal operators (providing very little or no answer to my emails).
I had tried to keep up with "hot" customers by shipping orders from domestic wholesalers (whose pricing was much higher than what I purchased or sold the goods for to my customers) just to prevent fabricated slander to circulate due to complaining parties. There was no feasible way to decrease order transit time since goods were purchased in bulk once a week from overseas supplier (0-7 days), air freighted to distribution center (4-5 days), and shipped to customer (2-4 days). The truth is that some customer's orders would arrive to them sooner and others later, depending on when there payment was made (not exceeding specified order time frame, exceptional only on mail-in payments).
By early June I was losing revenue on charge back orders (that were actually delivered), auction listing fees (for buyers that reconsidered on finished transaction following notification on invalid claim from "hot" customer(s), customer service fees (for the high volume complaint inquiries along with standard fees), and Paypal system errors (for duplicate order statement files which were caught eventually by assistant and distribution center), and refunds requested by buyers who had paid for order, received email stating invalid claim, and reconsidered on order before ship deadline.
On June 6, 2001 my company's E-bay account was suspended again. The majority of the previous week's buyers whom had pending orders got scared after discovering this (some who had as well received email with invalid claims) charged back their payment or demanded a refund.
With several orders (some pending and others new) it was very difficult to resolve the matter fast enough to keep up with complaints. The communications center had decreased personal email replies and replaced them with auto-replies since my company was under major financial difficulties, not able to pay for full service as prior with the overwhelming customer inquiry volume in conjunction with no overhead to cover expenses.
By mid-June the communication center had discontinued service. I had contracted with an inexpensive answering service which kept account for any customer contacts for me to contact personally later.
I had been contacted by a Detective M. S****** of the (Hopkins, MN Police Dept) mid-June regarding 4-6 customer complaints related to my company's E-bay auctions. He for some odd reason was able to contact the management office of where had moved from months before and made initial contact with an ex-girlfriend at her new address. Not understanding why he contacted her (as the management office had my new contact details to where they would send my deposit return), I contact Detective S****** after receiving a relayed response from my mother, who had been contacted by my ex-girlfriend. Detective S****** opened the discussion with a blunt accusation to fraud committed by my company before asking me any questions, insisting that I schedule a meeting with him. I ask Detective S****** has he crossed referenced with Detective Carlson (who had visited the communication center following a few complaint call to find that the business operation were legitimate). I thereafter ask him for names of the complaints. Detective S****** refuses to provide with their names, saying that I should already know who they are. When I tell him that my company handles hundreds of orders weekly he makes remarks that I am only making excuses and most likely do not run a legitimate business.
Despite his lack of cooperation and attempt to thoroughly investigate complaints to support his remarks, I provide him with contacts and phone numbers to my freight forwarder, distribution manager, and a local Mail Box Etc. that was shipping rush orders to prove that my operations were indeed legitimate despite the current dis-functions. He contacts the Mail Box Etc. only to finds that there are goods as specified in E-bay offerings being shipped. M. S****** follows up a few days later still insisting that my activities are fraudulent and will not release names of the 5-6 complaints he had received.
July-September I am no longer on E-bay selling but thus previous transaction still replying to complaints, cross-referencing claims, and sending refunds to verified order cancellations. Early in July I have meeting with Better Business Bureau in attempt to collect all names of outstanding complaints and resolve matters since my Paypal account was frozen, not allowing me to login and retrieve customer order data any longer and no cooperation from Paypal to receive a list of total complaints.
As of August I was completely in debt, using net earnings from new business program to pay debts from former E-bay operation and still keep up with personal necessities (i.e; rent, food, child support). Personally resolving complaints one by one I begin to see hope towards resolving problem over time. Any complaint on file was notified with update on situation and settle any claim (if valid) over time. Most customers were accepting on these terms and understood my situation.
(continued.....see "Complicated E-Commerce Related Case Part 2" - had to cut short due to 10k word limit)
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!!!! I can see a few ways you could have avoided this, but that's water under the bridge. I think you had your supply chain too tight. Once you had you business to a certain size, you should have divorced from PayPal and gone to direct credit card billing - that way you get a bank standing behind you. I amazed that Ebay suspended you for only on complaint after many positives. You really need a good lawyer, 'cause mail fraud charges are taken very seriously. You get what you pay for with a public defender - sell your car, your house whatever, but get a real lawyer. Don't miss any more court appearances - they HATE that. Good luck.