EBS International, one of eBay Australia’s largest sellers, is under investigation for leaving hundreds of customers out of pocket following the collapse of the company.

The company, which traded under the eBay username ebusiness-supplies, sold exercise equipment, pocket bikes and furniture.

One of the biggest mysteries surrounding the event is why eBay let the seller continue trading – despite allegedly receiving a number of complaints dating back as far as 2006.

In the three months before its collapse, EBS International sold approximately AUS $1 million worth of goods, none of which seem to have been delivered. The company directors have moved to China, telling liquidators that the company collapsed because an agent there took money without delivering goods. Although the company received more than 450 negative feedbacks, it was only yesterday (when the negatives finally reached 650), that eBay decided to shut down the ebusiness-supplies account.

eBay has set up a dedicated PayPal fund to refund buyer’s their money – but for anyone who purchased via credit card or bank transfer, the message so far is “sorry, but too bad”. On the eBay forums, many people are decrying the apparent bias toward PayPal users. Many believe that if eBay don’t do anything about refunding buyers who used alternative payment methods they will soon face a court case. And it gets worse. In what has been described by eBa

And it gets worse. In what has been described by eBay seller Robert Vandermeer as “…a growing case for negligence against eBay”, it has also been revealed that EBS International was blatantly flouting PayPal’s rules by promising to deliver items within 30 days of purchase. Yet PayPal specifies that sellers must guarantee delivery within 20 days. Unfortunately, this means that buyers who received items after the 20 day period are not entitled to refunds under PayPal’s buyer protection program.

What is going on here? We’ve all heard plenty of stories about eBay taking swift and decisive action over more minor transgressions – yet this one appears to have been allowed to continue right under their noses!