eBay Goes Phishing

If you have tired of watching your email inundated with identity theft scams by virtual thieves posing as popular online sites -- or find yourself an unfortunate victim in an unguarded moment -- you know all about phishing. Years ago the practice dealt Time Warner's (NYSE: TWX) America Online a heavy blow with fraudulent emails and instant messages alerting subscribers that their accounts had been breached and that they needed to resubmit their account logins. AOL found partial solutions by rolling out spam folders and tagging all of its official email with a blue envelope, border, and official seal.

But over the past few years, phishing has moved on from the AOL pond to the world wide waves of the Internet as a whole. Surely you've received emails trying to pass themselves off as official sources from financial institutions like Citigroup (NYSE: C), SunTrust (NYSE: STI) and Washington Mutual (NYSE: WM), asking you to click on a bogus site and enter your banking account access information. You may not have accounts at any of the institutions or even have registered under the email address the notice was sent to, but that's the point of phishing. Unlike AOL, these companies are at the mercy of the recipient's gullibility because they have no way of controlling how to distinguish their official correspondence from the fake stuff.

That's why everyone hates phishing, especially eBay (Nasdaq: EBAY). After all, both its PayPal and namesake auction site are popular targets. Everyone knows about eBay, and a third of the country has a registered PayPal account.

While the practice may be tough to eradicate completely, eBay is taking a stab at it by rolling out its My Messages inbox. Pitched to eBay members over the weekend as the place "where you can be assured you'll receive only secure messages directly from eBay," the company promises more administrative content and functionality with the service as the year ages along.

Naturally it's not the perfect solution. You can already hear scamsters pecking away at the next wave of fraudulent emails -- rife with misspellings -- introducing the eBay My Messages service with a link to log in and check it out from their fake data-acquiring Web address.

User education is the only real solution. Once your account has been bled dry or your credit card information has been compromised, it's a little too late to learn that baddies lurk online too. At least you have to give eBay some credit for realizing what AOL figured out years ago: When you are the home team, it is easier to regulate the spectator experience. Phishing isn't going away, but consumers and companies both need to smarten up together.  

Have you ever fallen for a phishing scam or know someone who has? What else can eBay do to fix this problem? All this and more -- in the eBay discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user --with 100% favorable feedback through 143 transactions. He does not own shares in any of the companies mentioned in this story and he is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its stage of defiance.