SCADS - Stamp Collectors Against Dodgy Sellers

Stamp Collectors Against Dodgy Sellers

Are you buying a stamp, or hiring a broker?

chenandcompany's innovation: selling stamps they haven't bought yet

August 18, 2002:

Although chenandcompany's 15 auctions of stamps which he does not yet own were reported to eBay on August 14, they are still on line.

A user who reported these prohibited "pre-sale listings" received an e-mail tonight (Monday in Australia) from eBay Australia Customer Support saying that the listings were 'being reviewed'.

Meanwhile, however, there are no bids yet on any of Chen's auctions, with the exception of the 1962 Mei Lan Fang sheet, being auctioned here by Chen, with the bidding at $1901 but still not over his reserve.

August 15, 2002:

A listing error by chenandcompany led by chance to the discovery that a large number of his auctions featured stamps which he did not own. The scans had been taken from the on-line catalog for the Status International auction which will take place in Sydney on August 22.

A philatelist was inspecting eBay's selection of $5 Columbians (US Scott #245), when he was surprised to discover a $2 Trans-Mississippi, Scott #293 with a left straightedge and a registry cancel on a blue piece. It had been mistitled by the Australian seller, chenandcompany, which usually deals in country packets, topicals, and Australian year sets.

Shortly thereafter, browsing the Status International auction, he was surprised to discover the same stamp!

Other US, Chinese, and Australian examples were soon discovered. The listings all claimed that he had acquired valuable stamps in an 'estate sale'. They had high reserves and were timed to close before the Sydney auction. Persons who e-mailed chen for an explanation were told only, "We will buy this stamp for our clients."

There was some speculation that chen himself might be the owner/consignor of the stamps, but this was denied by Chris Ceremuga, Director of Status International. In an e-mail to philatelist Richard Frajola, he wrote: "I do not think Chen was out to defraud people, but was hoping to 'sell' items for the very high prices listed on ebay and then buy them at the auction for less. Of course this is totally against ebay rules and stealing images from Status website/catalog is totally illegal. ".

chenandcompany was apparently engaging in a practice called "brokerage without consent." If a bidder won the auction on eBay, on which he had put a high reserve, he would then try to buy the stamp at the Sydney auction at a lower price and pocket the difference. If he could not get the stamp at a profit, he might then try to cancel the eBay sale on some pretext, leaving the buyer in the dark as to what had really happened.

This would be a no-lose proposition for chen, since he would not have to lay out money for the stamp in Sydney until after he had gotten more money for the stamp on eBay. However, the buyer, instead of paying for a real stamp, would actually be obtaining the conditional hope of getting a stamp, tying up his assets in a purchase which might actually not be successful.

These listings were in clear violation of eBay's policy limiting Pre-Sale Listings.

On August 14, most of the offending auctions were removed, under pressure from Status, but fifteen of them, mostly People's Republic of China issues, were still active today, including two stamps which are listed twice, and one stamp, the Year of the Monkey issue from 1980, which is listed three times.

In the preparation of this story, chenandcompany was invited to respond to questions, but has so far not responded.