FOR IMMEDIATE RELEASE:
April 30, 2003

FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327

NEWARK - New Jersey, the Federal Trade Commission ("FTC") and 28 other states have teamed up in a crackdown against fraudulent operators of Internet auctions, resulting in more than 55 criminal and civil cases throughout the nation, Acting Attorney General Peter C. Harvey and Consumer Affairs Director Reni Erdos announced today.

As part of New Jersey's participation in the FTC-led sweep, called "Operation Bidder Beware," two alleged ticket scalpers were required to pay nearly $24,000 in penalties to settle allegations that they used the Internet to unlawfully scalp tickets to eight New York Giants football games held in New Jersey.

In separate lawsuits filed last year, New Jersey sued Thomas Breining of Atlantic City and Alexander Wolf of Mahwah alleging they scalped Giants playoff and pre-season tickets for as much as 488 percent above their face value at Web pages they were operating at eBay, an Internet auction site. The tickets to the games, which were scheduled to be held at the Giants Stadium in East Rutherford, originally sold for between $45 and $89, but were resold at the site for as much as $265 a piece.

Prior to April 2002, when the violations allegedly took place, New Jersey's anti-ticket-scalping provisions under the Consumer Fraud Act prohibited individuals from reselling tickets for more than 20 percent or $3 above the face value of the tickets, whichever was greater. The law was amended January 8, 2002, and took effect on April 8, 2002, to allow licensed ticket brokers and season ticket holders to resell tickets for no more than 50 percent above the price they paid to acquire the tickets.

Under the terms of separate settlement agreements, Wolf agreed to pay $3,750 in penalties and costs, while Breining agreed to pay penalties and costs totaling $20,000. Breining and Wolf, both of whom were not licensed to resell tickets in New Jersey, also agreed to refrain from engaging in activities that violate the state's anti-ticket scalping laws. The defendants denied the State's allegations of any wrongdoing.

"The sweep targeted Internet auction scams that bilked thousands of consumers out of their money and/or merchandise," Acting Attorney General Harvey said. "By participating in the sweep, we are doing our part in a crucial effort to rid the Internet of fraudulent practices and make it a safer place for individuals to buy products and do business."

"We hope that by announcing our efforts, we are raising consumers' awareness about the perils that lurk at some Internet auction sites and are equipping them with the information they need to avoid falling prey to unscrupulous and fraudulent activities at some of these sites," Erdos added.

Auction fraud is the single largest category of Internet-related complaints in the FTC's Consumer Sentinel database, which logged more than 51,000 auction complaints in 2002. At Consumer Affairs, Internet auctions made up 40 percent of the Internet-related complaints filed with the Division in 2002.

Most consumers who complain say that the sellers don't deliver the advertised goods; deliver something far less valuable than they advertised; don't deliver in a timely manner; or fail to disclose all the relevant information about the product or terms of the sale.

As a result of the sweep, the FTC shut down four auction scams and U.S. District courts froze their assets, pending trial. In addition, 29 state and local law enforcers have announced 56 law enforcement actions including lawsuits, cease and desist orders, consent agreements, assurances of voluntary compliance, warning letters, and criminal prosecutions.

Acting Attorney General Harvey and Director Erdos are offering consumers the following tips:

• Become familiar with the auction site. Find out what protections the auction site offers buyers. Don't assume one site's rules are the same as another's.
  
  
• Before bidding, find out all you can about the seller. Avoid doing business with sellers you can't identify, especially those who try to lure you off the auction site with promises of a better deal.
  
  
• If the seller insists on using a particular escrow or online payment service you've never heard of, check it out. Visit its Web site and call its customer service line. If there isn't one, or you call and can't reach someone, don't use that service.
  
  
• Protect your privacy. Never provide your Social Security number, driver's license number, credit card number, or bank account information until you have checked out the seller and the online payment or escrow service, if you're using one, to ensure legitimacy.
  
  
• Save all transaction information.
  
  
• If you have problems during a transaction, try to work them out with the seller, buyer or site operator. If that doesn't work, contact the New Jersey Division of Consumer Affairs at 800-242-5846 to file a complaint. You may also file a complaint with the FTC at www.ftc.gov or call toll-free 877-FTC-HELP (877-382-4357).
  
  
• Check out the FTC's Internet Auctions: A Guide for Buyers and Sellers, available at the FTC's Online Shopping Web site (www.ftc.gov/onlineshopping) for more tips on Internet auction fraud.

The following states participated in the sweep, along with New Jersey: Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wisconsin. Members of California's Computer and Technology Crime High Tech Response team, including the San Diego District Attorney, San Diego City Attorney, Orange County District Attorney and Orange Police Department also participated in the sweep.

Deputy Attorney General David M. Puteska of the Division of Law handled this matter for the State.