EBay Faces N.Y. Probe Amid Fraud Complaints

EBay Inc., a San Jose-based Internet auctioneer, is being investigated by the New York City Department of Consumer Affairs over users’ complaints about fraud. Regardless, EBay shares gained $20.75, or 11%, to close at $217.50 on Nasdaq after a study by researcher Jupiter Communications said online auctions will sell $3.2 billion worth of merchandise a year by 2002 as the number of consumers bidding online surges more than sixfold. EBay, which doesn’t sell any merchandise itself, makes money by charging listing fees and taking a cut of each sale. The N.Y. agency hasn’t concluded whether EBay could be held liable for the actions of people who use its service to buy and sell collectibles and other items. The agency is investigating complaints from consumers who claim they were cheated through person-to-person online auctions. “It has always been EBay’s practice to offer to fully cooperate with any investigation involving improper items on the site,” EBay said in a statement, adding that the New York agency hadn’t contacted the company before the probe was reported in the New York Post.