PlayStation 2 frenzy spawns Web scams
A Canadian man was in court for a bail hearing Monday after being charged with fraud. He is accused of selling the popular PlayStation 2(PS2) consoles on two Web sites but never delivering them to customers, according to Royal Canadian Mounted Police (RCMP) Cpl. Mario Turcotte.
In Florida, police said they are investigating after a Web site said its supplier did not deliver promised consoles. In California, state and federal officials said they are investigating a Web site that took orders for up to 3,000 PS2 units and then did not deliver.
Canadian officials said they arrested Scott Byers, 20, Friday on two counts of fraud at his home in Moncton, New Brunswick. Byers ran two Web sites, PS2storeusa.com and PS2storecanada.com, that sold the PS2 for between $394 and $599. But customers said they never got the consoles, and last week, the main chapters of the Better Business Bureau in Canada and the United States issued warnings about the Web sites.
In the Florida case, police stepped in after a family-oriented Web site was forced to issue refunds after a supplier did not deliver thousands of PS2 consoles.
"It is absolutely 100 percent evident that we were scammed," said Mark Thurman, chief executive of Families On Line.
In a message posted on Families On Line, Thurman said the supplier promised to ship the consoles to the company by late November. After taking about 9,000 orders, the Ft. Lauderdale, Fla.-based company never received the goods.
Thurman, who said his site is an Internet service provider geared toward "filtering out the evils of the Internet," is working with the Ft. Lauderdale Police Department's Economic Crimes Unit on the case.
Sgt. Bob Farrell confirmed Monday that detectives are looking into the matter, but he declined to give specifics.
Parents and players searching for the elusive PS2 have touched off a consumer buying frenzy similar to those that had Beanie Babies and Cabbage Patch Kids flying off the shelves.
Some PlayStation 2 shoppers have unleashed "shopping bots," computer programs that automatically prowl e-commerce sites, to find the consoles. While the bots are effective, some e-tailers complain they are overloading their systems and causing site outages and slowdowns.
Besides the bots, the sheer demand for the PS2 has clogged the Web sites of several online stores. Sites including Amazon.com, Best Buy, and Kmart's BlueLight.com stalled or had other site problems because of the vast number of people logging on.
In California, police, U.S. Postal Service officials, and the FBI are investigating Gametek, a 2-month-old company that advertised consoles for a price of $349.99, according to a detective with the Fountain Valley Police Department.
Gametek allowed customers to send payment via online money-transfer site PayPal. According to company spokesman Vince Sollitto, PayPal became suspicious of Fountain Valley, Calif.-based Gametek in October when customers began to complain about not receiving their products.
After conducting its own in-house investigation, PayPal alerted the Palo Alto, Calif., Police Department in early November, Sollitto said. The U.S. Postal Service served a warrant on the unidentified owner of Gametek two weeks ago, Sgt. Jim Perry of the Fountain Valley Police Department said.
"As of last Monday, none of the consoles had been delivered to potential customers," Perry said, adding that no proof could be found that Gametek had ever had any of the consoles in stock.
Perry also said Gametek accepted between 2,500 and 3,000 orders. Police have yet to make an arrest in that case.
A shortage of computer chips has resulted in fewer consoles, according to Sony (sne). As Christmas nears, the demand for the scarce console has heated up, and some game enthusiasts and parents hoping to snag a console for their children have gone to rummaging the Internet's version of back-alley operations.
"Some parents abandon common sense when they're on the search for hard-to-find popular toys, and scam artists know this," said Ken Hunter, president of the U.S.-based Council of Better Business Bureaus.