eBay has experienced controversy, including cases of fraud, its policy requiring sellers to use PayPal, and concerns over forgeries and intellectual property violations in auction items

eBay Customer Support claims that its data indicate that less than .1% of all transactions result in a confirmed case of fraud.[1] One mechanism eBay claims combats fraud is its feedback system. When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay seller may be suspended if there are too many complaints made against them. eBay does not allow sellers to give negative feedback to buyers.

Until June 2008,[2] eBay allowed Mystery Box and Mystery Envelope auctions. However, these are almost all fraudulent auctions since the seller can manipulate the box contents to make sure it is never a good deal for the buyer.[3] Mystery Envelope auctions offer cash prizes of an undisclosed amount to auction winners. The auction winner usually receives from 10% to 30% of the money he paid for the auction back in ‘winnings’.[4]

Scammers like to target new members to take advantage of their unfamiliarity with how eBay or PayPal works. New members can be easily tricked into thinking there is a special Web site they should make payments through (which is in fact a fake site set up by a scammer) or they may be tricked more easily into using a fake escrow company.[citation needed]

Many complaints have been made about eBay’s system of dealing with fraud, leading to its being featured on the British consumer rights television program Watchdog. It is also regularly featured in The Daily Mirror’s Consumer Awareness page. The complaints are generally that eBay fails to respond when a claim is made.