[IP] Surety bonds - A new solution to online auction fraud and transaction risk for buyers
; Note I am an advisor to them and have worked with Jeff for many years (he
is young:-) djf
Dave,
As an avid IPer, I believe this is something everyone may find quite
interesting - "buySAFE" now uses surety bonds to eliminate risk in online
transactions for buyers. While I am the CEO and therefore biased, I
believe the IPers will find the potential of this solution (surety bonds)
to eliminate major public policy problems (online auction fraud) and
fundamental eCommerce problems (trust in transactions) of high interest.
The FTC recently announced it's new Top 10 list of Consumer Fraud
Complaints for 2003. The following link takes you directly to their report
<http://www.consumer.gov/sentinel/pubs/Top10Fraud2003.pdf>http://www.consumer.gov/sentinel/pubs/Top10Fraud2003.pdf
As cited in a 1/26/04 article by Brian Krebs on eBay Feedback Forgers, last
year "the Federal Trade Commission said it received more complaints about
Internet auction fraud than any other online scam. Internet auctions
accounted for 48 percent of all Internet fraud complaints filed with the
commission last year". Despite the best efforts of major online auction
marketplaces, internet auction fraud continues to grow at an alarming rate
- the number of complaints to the FTC has more than tripled in the last two
years.
As covered in the Washington Business Journal
<http://www.bizjournals.com/washington/stories/2003/12/22/story3.html>http://www.bizjournals.com/washington/stories/2003/12/22/story3.html
and the New York Times
<http://query.nytimes.com/gst/abstract.html?res=F70910F83A5C0C748DDDA80994DB404482>http://query.nytimes.com/gst/abstract.html?res=F70910F83A5C0C748DDDA80994DB404482
buySAFE recently launched with an entirely unique solution that eliminates
online transaction risk for buyers. buySAFE.com, in partnership with The
Hartford Financial Services Group, uses surety bonds to completely
guarantee a merchant's performance in an online transaction, thus
eliminating all online auction fraud and seller default risks for
buyers. Surety bonds, having been in use for thousands of years, is a
simple, three-party agreement between a buyer, a seller and a surety
company. The bond says that if the seller fails to fulfill any of the
promises made in a transaction's terms of sale (e.g. non-delivery, product
misrepresentation, refund, return or guarantee failure, etc.), the surety
will replace the item or fully reimburse the buyer for the loss.
With a "bonded" transaction, shoppers know the two things they care about
most - 1) that they are dealing with a reliable and trustworthy seller and
2) that if a problem does occur, they are protected by the most
comprehensive form of protection available online. Very simply, surety
bonds make shoppers feel safer in two ways, via problem prevention (only
very good sellers can qualify) and protection (with the surety bond guarantee).
Sellers pay for the bond, making it completely free (and therefore quite
compelling) for their buyers. Sellers do this to attract more business. For
small and medium-sized online merchants, surety bonds can help them
overcome typical buyer 'trust concerns', enabling them to compete against
nationally branded retailers, thus attracting more buyers, higher prices
and increased profitability.
Very simply, technology now enables this age-old solution (surety bonds)
for eliminating risk in transactions between two parties to solve one of
the most fundamental problems with eCommerce - buyer risk - by guaranteeing
an unknown seller delivers as promised.
We're really excited about the prospects for this solution. Thoughts and
feedback from the IPers is warmly welcomed! Thank you.
Jeffrey E. Grass, CFA, CPCU
CEO & President
buySAFE, Inc. Bid Safe. Buy Safe.
(w) 703-354-6701
(m) 703-861-8318
(f) 703-997-0883
jeff@xxxxxxxxxxx
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