LAWMAKERS focus on Internet auction fraud

<br>WASHINGTON (AP) _ Two House members asked online auction companies Tuesday about how they fight fraud. <br><br>According to a recent study by the Internet Fraud and Complaint Center, over 64 percent

Tuesday, June 26th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ Two House members asked online auction companies Tuesday about how they fight fraud.

According to a recent study by the Internet Fraud and Complaint Center, over 64 percent of Internet fraud complaints in the latter half of 2000 were about auctions. The Federal Trade Commission recently singled out online auctions as one of the most common Internet scams.

In letters to the three largest Internet auction houses _ eBay, Yahoo! and Amazon _ House Commerce chairman Billy Tauzin, R-La., and Rep. Heather Wilson, R-N.M., asked the companies to make a legislative wish list to Congress.

Specifically, legislators want to learn more about the process of ``shilling,'' in which a seller's friends run up the price of an item.

eBay spokesman Kevin Pursglove said that in the early days of the site, eBay allowed shilling.

``A shill was permitted to whet the appetite of bidders,'' Pursglove said. ``As the site grew, more and more people came to eBay with less than desirable motives.''

The company also lets people sell regular items for a fixed price rather than using an auction. Those sales are less prone to fraud and account for about 30 percent of eBay listings. Amazon also encourages fixed-price sales, according to a spokeswoman.

eBay chief executive officer Meg Whitman will meet with Tauzin Wednesday on Capitol Hill to talk about auction fraud. No future hearings or legislation are scheduled, said Jon Tripp, a Commerce Committee spokesman.