Gregg, Dawn G. & Scott, Judy
Communications of the ACM Vol. 51, Issue 4, p. 69-74

This research shows that reputation systems serve an important function in today’s online world. Results of this study indicate that more than 97% of complaints do allege serious problems with the seller. Comments often indicate that sellers lack business training and clear commerce standards, like proper communication skills (44.2%) and appropriate return policies (10.5%). However, a greater proportion of the complaints contain allegations of fraud. This study shows that 69.7% of negative comments posted in eBay’s feedback forum indicate that the seller may have defrauded the buyer by failing to deliver the item, misrepresenting the item in the product description, selling illegal goods, by adding charges after the close of the auction, or by shill bidding. This rate of fraud is twenty times higher than the rate quoted by eBay. This makes reputation systems important to both online auction houses and to law enforcement as they try to combat rising levels of online auction fraud.