While eBay has created millionaires and new businesses, it has also spawned new opportunities for fraudsters. Andrew Mernin hears how the trading empire is striking back.

As an example of the many dilemmas facing eBay on a daily basis, it was once asked to remove auctions for a certain knife which was being used by criminals to create drug-making labs and grow cannabis.

However, the item was also popular among home brewers and people with aquariums and so eBay was left with a tough decision to make.

It has since made this and any other form of knife impossible to buy and sell on the site.

“We were under a lot of pressure from trading standards to do something about the sale of knives on eBay.

“A journalist bought three illegal knives on the site and held us to account. We now don’t allow the sale of knives – you can’t buy Swiss army knife on there now. We don’t take decisions like that lightly.”

As with most businesses which deal with online payments, identity fraud is a risk which needs to be managed by tight security.

“EBay accounts that have not been used for a long time can be at risk of being taken over by criminals to make fraudulent transactions on the site.

“In order to stop this and protect our members, we have shut down six million dormant accounts so that they can no longer be used in this way.” Another step to ensure that buyers and sellers are who they say they are is the requirement that all sellers trading on eBay are using recognised computers.

“If you are going to buy and sell something we have to know that you are using one of the computers that you usually use.

“If you are trying to trade in Lagos, we will say no, and you will have to check your email and answer security questions.”

In its assistance with the police, eBay is often called on to go above and beyond in bringing cyber criminals to justice.

Three years ago eBay was contacted by Wiltshire Police regarding a large stolen items case and ultimately the firm provided evidence and made its in-house investigators available as court witnesses. It helped convict Matthew and Donna Hobin for listing up to £70,000 worth of stolen goods on eBay.

In another case, eBay helped Greater Manchester Police in the case of Donna Flannery who used the auction site to con £20,000 from music fans.

But there are requests from law enforcers which eBay draws the line at.

“One thing we always get asked is for covert accounts.

“Every spy wants them but we can’t do that. If you want to work secretly on the internet, you need someone to check you are who you say you are.

“If you wanted to do that, we would have to create hundreds of accounts.”