Series: The Social Machine
How Facebook Plays by Its Own Set of Rules
For years, Carman Alfonsi relied upon Facebook Marketplace to buy and sell used pool tables for his Michigan billiards business. He banked a steady stream of income from the wildly popular online bazaar.
But this July, Alfonsi’s Facebook account was hacked and used to post roughly 100 scam listings for cell phones and vehicles. The Marketplace posts directed buyers to contact an email address controlled by the scammers. When customers were left empty-handed, they sent enraged messages to Alfonsi by phone and Facebook Messenger.
Alfonsi repeatedly contacted Facebook to warn that his account had been hijacked by fraudsters. Instead of fixing the problem, the social media giant banned him from using Marketplace, at one point removing his profile from its platform.
Now Alfonsi carries a gun in his own home. He’s concerned that an angry Marketplace customer might show up at his front door.
“I’m thinking I’m in trouble and someone’s going to come to my house and kick my ass,” Alfonsi said.
Facebook’s Marketplace is unquestionably a business success. It hit 1 billion users a month this spring, and the company recently told investors that it’s one of its most promising new sources of revenue.
That growth has been built, in part, on the company’s assurances about the safety of its platform.
“Marketplace lets you see what real people in your own community are selling. You can see their public Facebook profile, mutual friends and seller ratings so you can feel confident in your purchase,” the company says.
That confidence may be misguided. Facebook says it protects users through a mix of automated systems and human reviews. But a ProPublica investigation based on internal corporate documents, interviews and law enforcement records reveals how those safeguards fail to protect buyers and sellers from scam listings, fake accounts and violent crime.
Marketplace’s first line of defense consists of software that scans each listing for signs of fraud or other suspicious signals before it goes live. But Marketplace workers said these detection services frequently fail to ban obvious scams and listings that violate Facebook’s commerce policies. The automated systems also block some legitimate consumers from using the platform.
ProPublica reporters discovered a network of fake and suspicious accounts posting listings for dubious male enhancement supplements, which violated multiple Facebook policies. Facebook removed thousands of listings and took other punitive action against more than 100 accounts after being informed of the activity. In another case, Facebook temporarily banned the account of an amateur fraud investigator who, an automated message said, was filing too many complaints about scam listings on Marketplace.
As a backstop to its automated systems, Facebook Marketplace relies upon roughly 400 workers employed by consulting firm Accenture to respond to user complaints and to review listings flagged by the software. Until recently, Facebook Marketplace allowed these low-paid contract workers to police its site by giving them largely unfettered access to Facebook Messenger inboxes, ProPublica has learned. This broad access resulted in workers spying on romantic partners and other privacy violations, according to current and former Accenture employees. The employees said the efforts they made were rarely successful in preventing fraud.
The social media giant’s shortcomings in overseeing the service have made it easier for fraudsters to perpetrate a litany of scams. Internal Marketplace documents, law enforcement bulletins from multiple countries and media reports describe frauds involving lottery numbers, puppies, apartment rentals, PlayStation 5 and Xbox gaming consoles, work visas, sports betting, loans, outdoor pools, Bitcoin, auto insurance, event tickets, vaccine cards, male enhancement products, miracle beauty creams, vehicle sales, furniture, tools, shipping containers, Brazilian rainforest land and even egg farms, among other enterprises. Scammers target both buyers and sellers, resulting in financial losses, hacked Facebook accounts and stolen personal information.
Since the start of the pandemic, criminals across America have exploited Marketplace to commit armed robberies and, in 13 instances identified by ProPublica, homicide. In one high-profile case, a woman was allegedly murdered by a man who was selling a cheap refrigerator on Marketplace. The alleged killer’s profile remained online with active listings until ProPublica contacted Facebook.
In many ways, Marketplace’s flaws reflect Facebook’s approach to overseeing its platform. It launches and scales new products rapidly thanks to an unrivaled user base of roughly 3 billion people, and then leans heavily on automated systems, low-paid contractors and a smaller number of full-time Facebook employees to enforce its rules. This approach allowed misinformation to run rampant in News Feed, saw Facebook groups become hotbeds of violent speech and radicalization, and enabled scammers to earn millions by placing ads that rip off users.
Much of the commerce on Marketplace is perfectly legitimate, and all companies that connect local buyers and sellers — called peer-to-peer sales in the industry — experience problems with user safety and fraud and other crimes.
Major law enforcement investigations have uncovered crime rings selling stolen products on Amazon and eBay. By one accounting, Craigslist has figured in more than 130 murders since 2007. The recent spate of murders with links to Marketplace occurred during an overall upsurge in violent crime in the U.S.
Gauging the scale of the criminal activity on Marketplace — or making comparisons between it and its competitors — is difficult. FBI statistics don’t effectively track all online marketplace fraud, nor do they provide incident rates for individual companies. The bureau’s Internet Crime Complaint Center, or IC3 — which collects consumer reports of all types of online crimes — documented nearly 792,000 total incidents in 2020, an almost 70% increase over the previous year.
A Facebook spokesperson said the company invests heavily in automated systems and teams of reviewers to prevent scams and fraud on Marketplace, and that it works closely with law enforcement. He declined to comment on individual user cases or violent crimes linked to Marketplace transactions.
“All online marketplaces face challenges and ours is no exception, which is why we’re always working to prevent new ways to scam and defraud people. Any suggestion that we aren’t trying to solve these complex problems or protect people who use Marketplace is not only false but misunderstands our entire approach to safety,” said Drew Pusateri, the spokesperson. “People use it because their experiences are positive, and to help make sure that continues, we are working to improve our enforcement and deliver the highest quality peer-to-peer online marketplace available.”
Pusateri said Accenture analysts working on Marketplace could view Messenger inboxes in the past, but that this access was recently restricted to messages exchanged on Marketplace.
Marketplace entered the internet classified game years after other companies put in place tools to combat scams and the sale of stolen goods. Yet Facebook, experts and former employees told ProPublica, has failed to create comparable safeguards despite the company’s considerable financial resources and expertise in policing online activity.
EBay, for instance, has been praised for introducing an escrow service and providing refunds for fraudulent car sales. The company also created a program that proactively looks for stolen goods being sold on its platform. After grappling for years with widespread used vehicle fraud, Craigslist began charging users to post car listings, which experts said reduced such offers.
Facebook, eBay and Craigslist, among others, do not disclose data about fraudulent listings on their sites. Craigslist did not respond to multiple requests for comment. Amazon and eBay said they don’t allow stolen goods or scams on their platforms.
“Stolen goods are not tolerated on eBay,” a spokesperson for that company said. “EBay takes the trust and safety of our users very seriously and is fully committed to providing a secure online shopping experience to millions of consumers around the world.”
“Amazon does not allow third-party sellers to list stolen goods in our store, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making law enforcement referrals,” said a spokesperson for Amazon.
Two months after Alfonsi’s account was hacked, he’s still banned from using Marketplace, a situation he says hurts his business.
“I’m dead in the water here, because people won’t use Craigslist anymore. I tell people that the only things left in the world will be Marketplace and Amazon,” he said.
Scammers’ New Favorite
Facebook Marketplace was launched in 2016 after the social media company saw the popularity of local Facebook groups dedicated to trading and selling things. It created the service as a dedicated hub where people could post used items for sale — cars, clothes, boats, toys — and get connected to buyers, usually living in the same area, to complete the transaction. Marketplace was heavily promoted via a prominent tab on Facebook’s mobile apps.
At the time, Marketplace product manager Bowen Pan said Facebook would ban items or sellers that broke its rules. But Pan also emphasized that the company was not responsible for safeguarding transactions. “We see our role as just connecting buyers and sellers,” he told TechCrunch. Pan left Facebook at the end of 2020, and did not respond to a request for comment.
Almost immediately, Facebook was criticized for allowing listings of such prohibited items as weapons, illegal drugs and adult services, causing the company to temporarily pause the rollout of Marketplace.
When it restarted, the service quickly took off among thrifters, small business owners and people looking to buy or sell household items. Less than a year after it launched, 18 million listings were posted to Marketplace in a single month. Marketplace is now available in more than 150 countries and territories.
Marketplace had an instant advantage over longtime players in peer-to-peer sales, such as Craigslist. At the time, more than 1.5 billion people had a Facebook account, and they could instantly create listings that would be viewed by people in their areas. Marketplace also worked seamlessly on smartphones, while Craigslist didn’t launch a mobile app until late 2019.
Marketplace offered another selling point, experts said. As opposed to Craigslist, which allows users to post anonymously, each Marketplace listing is connected to a Facebook account, increasing consumers’ trust by appearing to offer more information about a prospective buyer or seller.
That “lends a little bit more of a veneer of safety than Craigslist, where you can make up an email address, and who knows what you’re going to get,” said Sucharita Kodali, a Forrester Research vice president and principal analyst focused on e-commerce.
By 2021, Marketplace had pulled ahead of Craigslist, its closest competitor, in popularity among U.S. consumers, according to a survey by Forrester. It found that 14% of people had made a purchase using Marketplace, as opposed to 6% for Craigslist. Two years earlier, only 6% of respondents said they’d made a purchase using Marketplace.
What made the service popular with users has also made it popular with criminals and con artists. Marketplace’s ease of use, integration into the dominant global social network and Facebook’s preexisting problem with fake and hacked accounts have made the platform a favorite choice for organized retail crime gangs and international cybercriminals, according to law enforcement, retail security executives and independent experts who closely track incidents of fraud.
Fraudsters come from all over the globe to find victims on Marketplace. Workers charged with helping police the service say many cons are run by organized rings operating from countries in Eastern Europe and Africa. Internal Marketplace documents show that Facebook identified several countries as “high risk” due to the volume of scams run by people based there, and the fact that they often target people in other countries.
Facebook has expanded the service into known fraud hot spots. Benin was one of the countries identified internally as having an “unusually high scam prevalence.” Before Marketplace was even available in the West African nation, cybercriminals there used fake or hacked accounts to post listings for bogus loans and male enhancement supplements targeted at people in other French-speaking countries, according to company documents. Yet Facebook officially launched Marketplace in Benin at the end of August.
To protect Marketplace’s more than 1 billion monthly users, Facebook relies heavily on artificial intelligence that scans each listing before it goes live. Workers said that the system often fails to identify scams. A current Marketplace staffer said the system misses obvious red flags such as hacked accounts and suspiciously low-priced items.
Facebook has roughly 400 such workers employed by Accenture in the U.S., Ireland, India and Singapore. Each worker is typically required to handle more than 600 complaints or help requests a day — a rate of less than one minute per incident — many of which involve Facebook users who’ve lost money.
Facebook said it does not enforce quotas for processing complaints, and the roughly 400-person Accenture workforce does not represent the total number of people working to secure Marketplace. The company declined to provide the number of people working on Marketplace safety and security. Accenture declined to comment.
Multiple Marketplace contract workers told ProPublica they rarely, if ever, stop scams before they happen. The contractors get involved after someone has already been ripped off, banning fraudsters and in some cases helping restore hacked Facebook accounts to their original users.
“It’s 100% reactive, it’s not proactive,” said a former contractor who worked on Marketplace for roughly two years. The person also asked not to be named because of a nondisclosure agreement. “I don’t think I’ve ever stopped anyone from getting robbed.”
Marketplace contractors had access to the Facebook Messenger inboxes of people on the platform. This broad level of access, which enabled them to read all messages sent and received, was abused by workers, according to current and former Accenture employees. Some snooped on former romantic partners and were fired as a result, they said.
“If most people knew how much access these random people on the Marketplace had to their info, it would make them shit a brick,” the former contractor said. “It’s creepy, and we do not need that overwhelmingly intrusive access.”
Inbox access let analysts see if an account was copying and pasting the same suspicious message to different prospective buyers or sellers or directing them off-platform to continue the scam, for example. But the access also opened the door to invasions of privacy, according to multiple workers.
“What shocked me the most is there was not any guidance for data protection in training,” said a former worker. “I was given inbox access six hours after signing my onboarding papers.”
If a contractor tried to look in the inbox of someone in their own friend network, the system cautioned them about such access. There was also a pop-up if a worker attempted to access the account of someone on Facebook’s internal list of high-profile individuals, such as politicians or celebrities, or if they attempted to access the inbox of a Facebook employee. Facebook employees were the only people notified if contractors accessed their Messenger inboxes, according to multiple sources.
Pusateri, the Facebook spokesperson, acknowledged that the workers formerly had access to users’ Messenger inboxes, but said that was no longer the case. He said workers can now view the Marketplace messages sent and received by a user as part of an investigation, but they do not have access to the full Messenger inbox. He also said workers receive data privacy training.
“We have protocols in place, in accordance with local laws, that limit what Marketplace messages can be reviewed, and have a zero-tolerance policy for unauthorized access,” he said. “Anyone found to violate this policy, whether a full-time employee or contingent worker, is subject to termination.”
Internal Marketplace documents obtained by ProPublica reveal that Facebook expects workers to be familiar with dozens of types of fraud across more than 25 countries. New, widespread cons are declared “trends,” and are written up with information about how to spot them and what action to take. There are also country-specific documents about trends that outline common scams and tactics around the world.
As examples, the internal documents cite specific Facebook accounts implicated in scams. The company appears not to have taken action against some of those accounts. ProPublica found 15 that were still active as of September. One such account was cited as part of a widespread Marketplace con in which users claimed to be selling highly sought-after PS5 consoles but never delivered them to buyers. The account belongs to a man in Alabama who manages a page with the name “Playstation 5 Console’s” as well as a Facebook group called “Playstation 5 Orders.” He did not respond to multiple requests for comment from ProPublica.
Facebook does not disclose statistics, but the sheer scale of Marketplace suggests that thousands of face-to-face sales are facilitated by the company on a daily basis. Since the pandemic hit, police forces around the world have issued warnings about scams and about gangs robbing people who respond to Marketplace listings. Loss prevention staff at major retailers are also struggling to stop organized retail crime outfits that steal inventory and use Marketplace to fence it faster than ever before.
“I go on Facebook Marketplace and you can tell some of the things are stolen. There was a guy on there with 200 bottles of Tide. Really? Who has 200 bottles of Tide?” said Rachel Michelin, president and CEO of the California Retailers Association. “We really need to start looking at these online marketplaces.”
Even when users are accused of violent crimes related to Marketplace transactions, Facebook doesn’t appear to bar them from continuing to buy or sell on the platform.
ProPublica found four active Facebook accounts belonging to people charged with murder related to Marketplace transactions. Of those, two still had active listings on Marketplace.
In Pennsylvania, Denise Williams, 54, was interested in buying a cheap refrigerator she had found on Facebook Marketplace. She wound up bleeding to death from multiple stab wounds.
According to court documents, 26-year-old Joshua Gorgone admitted to police that he stabbed Williams when she came to his apartment in April to buy the used fridge, which he’d posted for $160. Then, police said, Gorgone wrapped Williams in a blanket and dumped her on his bathroom floor, where she was “left to die next to the toilet.” Gorgone told police that he stole her 2019 Chevrolet Trax SUV and used her money to buy heroin, court records show.
Currently in custody in the Cambria County jail, Gorgone has been charged with homicide, robbery, abuse of a corpse and other charges. He has pleaded not guilty.
As of this August, Gorgone, who went by the username Thraxx Mula, was still on Facebook with four active Marketplace listings. After ProPublica contacted Facebook, his account was deactivated.
Facebook declined to comment on how its policies apply to accounts that belong to people charged with crimes connected to Marketplace.
“Marketplace is kind of an easy target,” said the former Marketplace worker. “It’s mostly boomers and old people who are just trying to sell something. And every now and then you come across people who are meeting people from Marketplace and robbing them at gunpoint.”
Marketplace’s growth has coincided with Craigslist’s decline, according to Peter M. Zollman, the founding principal of AIM Group, a business intelligence firm that closely tracks the classifieds and marketplace industries.
Zollman said Craigslist has done a poor job handling scams and user safety, but that these issues have “slowed, frankly, because Craigslist has slowed” as a business. Marketplace’s exploding growth makes it a focal point for scammers and the security issues that plague services of its kind.
“There is always going to be a scam or three. Could Facebook be doing more? Absolutely. But are they taking more steps than many marketplaces? Yes,” he said. “And maybe they need to do a lot more.”
Hacked or faked Facebook accounts are one of the biggest issues plaguing Marketplace, according to experts, internal documents and a ProPublica review of hundreds of dubious profiles. Such accounts may give a false sense of security to users, who believe them to be genuine.
In April, Houston police issued a public alert identifying a local man they said had used at least four different profiles to set up bogus Facebook Marketplace deals and then rob the people who showed up to meet him. According to police, the man used a string of different names but kept the same profile picture.
In other cases, cybercriminals compromise Facebook users’ accounts and deploy them to post listings for vehicles, phones and other high-value items. They convince buyers to pay in advance. Once payment is received, the scammer cuts off contact, never delivering the merchandise. Beyond making a listing seem legitimate to the average buyer, using a real account also leaves the person with the compromised account to deal with the victims.
After discovering he had been hacked, Alfonsi, the billiards company owner, reached out to Facebook for help securing his account. Weeks went by with no response. Then people started contacting him about a truck. Alfonsi’s account was again being used by a scammer. ProPublica found 78 listings for three different vehicles on his account.
“I have no idea how they were able to place them,” he said.
Alfonsi again tried contacting Facebook, but didn’t receive an answer — and soon he discovered he’d been banned from posting to Marketplace, cutting off a critical source of revenue for his business. He said the prevalence of hacked accounts on Marketplace could scare off users.
“Now everyone is hacking into Marketplace, so no one’s going to trust it anymore,” he said.
After yet more scam vehicle ads were placed using his account, Facebook removed Alfonsi’s Facebook profile in August without telling him. His account was eventually restored by September, though Alfonsi is still blocked from using Marketplace.
Facebook “never got back to me, it just kept getting worse and worse,” he said.
Alfonsi’s experience highlights another problem with Marketplace, workers said. Facebook’s artificial intelligence systems regularly ban the accounts of legitimate sellers and small business owners. At one point earlier this year, there was a backlog of roughly 700,000 auto-banned accounts whose owners had appealed to Facebook for reinstatement, according to a current worker. They said the system auto-bans accounts for suspicious signals, and has been mistakenly banning legitimate accounts for close to a year.
Facebook said it has automated systems and teams of people focused on banning fakes and investigating hacked accounts across its services. It said it’s hiring more people to assist with reviewing listings and flagging compromised accounts on Marketplace.
Cars: Profit and Peril
In a 2019 earnings call, Facebook COO Sheryl Sandberg singled out vehicle ads as one of the most lucrative segments on Marketplace.
“We’re seeing a lot of interest, especially with retail and auto advertisers,” she said.
Scam artists have also shown a deep interest in the business of used vehicles on Marketplace.
A current Marketplace worker with insight into overall trends said used vehicle fraud is currently one of the biggest issues on Marketplace.
Fraudsters typically post a listing with multiple photos of an appealing vehicle, priced well below market rate. When interested buyers reach out, scammers send a detailed message with information about the maintenance and ownership history of the vehicle. They also may explain that the price is low because the vehicle belonged to a recently deceased relative, or because the seller is a U.S. soldier about to ship out.
The thieves ask potential buyers to share basic personal information so they can arrange what they falsely claim is a secure purchase via an escrow service, or eBay’s Vehicle Purchase Protection plan, which provides up to $100,000 in repayment for losses associated with fraud. The eBay program, however, only works for vehicle purchases made on eBay. Once buyers send money to what they think is a legitimate third party, the seller breaks off contact.
Mark Reeves, an IT consultant in Shreveport, Louisiana, helps run a Facebook group dedicated to outing online marketplace crooks. Many of them, he said, are based overseas and have shifted from Craigslist to Marketplace.
“These people that are outside the U.S. need to be declared economic terrorists because they are getting away with billions of dollars a year in scams,” Reeves said.
Marketplace’s competitors have in recent years implemented measures to rein in con artists. After used vehicle frauds proliferated on Craigslist, the company implemented a policy in 2019 that required people to pay to post ads for used cars. The reform resulted in fewer such scams on the service, experts said.
EBay has taken several initiatives to protect users shopping for cars. Its Vehicle Purchase Protection plan has offered up to $100,000 in reimbursement for fraud since 2016. The company also maintains a partnership with an online escrow firm which acts as an intermediary in vehicle deals, ensuring that sellers get paid and buyers receive the cars, trucks, boats, or motorcycles they were promised. Using the escrow program is voluntary.
At times, however, Facebook has seemed more interested in increasing sales than safety. In 2017, Marketplace rolled out new features, such as listing Kelley Blue Book Values, to expand car sales. To educate users about common signs of Marketplace used car scams, it offers three bullet points of tips in Facebook’s Help Center, and general guidance in a more detailed guide focused on buying a used car. It has not developed features specifically aimed at stopping used car fraud.
ProPublica interviewed an amateur fraud hunter who said he spends hours each day scouring Marketplace for scam vehicle listings and reporting them to the company for removal. The individual, a retiree who asked not be named due to retaliation fears, said vehicle scammers have shifted from Craigslist to Marketplace. He first noticed fraudulent used car postings on Craigslist in 2004 and began contacting the cybercriminals to understand their tactics and waste their time with emails that distracted them from genuine targets.
“The problem just got worse on Craigslist until recently when Craigslist started charging a fee to post car ads ... I began to see the same group migrate to Facebook in the last year or two en mass,” the fraud hunter wrote in an email. “Facebook allows hundreds if not thousands of these every day.”
He continued: “It’s worse than ever. There is nowhere to turn for help.”
He shared several examples of fraudulent Marketplace listings that use a set of photos of a 1998 Chevrolet Silverado truck he previously saw used by overseas fraudsters in scam Craigslist listings for years. “Facebook is now their cesspool of choice,” he said.
In September, Facebook temporarily blocked his account from reporting suspicious listings on Marketplace. An automated message said he’d reported too many listings in a short period, triggering a suspension.
“Facebook has now blocked ME for reporting too many scam sites,” he wrote in an email, adding that the company is “out of control as the scammers post the fakes in Marketplace on an endless loop.”
Experts said that scam vehicle listings typically show a price significantly lower than the value of the truck or car; feature a description instructing prospective buyers to contact the seller by email; and show that the user has turned on the “vacation” feature, which prevents people from using Facebook Messenger to contact the account that posted the listing. Fake or compromised accounts often post dozens of identical vehicle listings targeted at locations all over the U.S.
On the basis of those criteria, ProPublica identified hundreds of potential scam listings for cars, trucks and campers placed by hacked accounts belonging to real estate agents, musicians and other people based in the U.S.
But Facebook’s automated systems, which are trained to ban or flag suspicious listings, failed to recognize and remove the apparent scam postings.
After conducting searches for low-priced trucks, ProPublica was soon being recommended fraudulent truck listings by Facebook’s systems.
“It goes back to Facebook’s complete refusal to take responsibility for pretty much anything that happens on its platform,” said Kodali, the Forrester analyst. “They’re not particularly incented to shut this down. And I think what kind of is the shocking thing about online marketplaces in our entire society is that there’s no rules and regulations, there’s no governance around marketplaces.”
As people struggled to find housing or moved cities during the pandemic, Marketplace also saw an increase in fraudulent apartment and house rental listings, according to police notices, media reports and workers.
Scammers copy photos from legitimate real estate ads and repost them in bogus Marketplace listings, offering homes and apartments at below market rates. Often, the fraudsters use hacked accounts belonging to real estate agents to make their listings appear more legitimate. They may tell prospective renters that the apartment can’t be viewed in person due to the pandemic, but send additional photos and information to put people at ease. The crooks convince the renter to send a deposit via an electronic payment service and promise to use a courier to send the keys, which never arrive.
The scam has claimed victims across the U.S., in Australia, the U.K., and Canada, among other places. A man in Trenton, Ontario, who was selling his house said people showed up at his door claiming they’d paid him a deposit to rent the property.
“One lady said, ‘I sent $1,000 to you,’ and I said it definitely didn’t come to me,” Allan Ballach, the owner, told CTV News Toronto.
Even listings that openly flout Facebook policies have flourished on Marketplace.
While browsing Marketplace, ProPublica identified a network of hundreds of fake accounts that posted thousands of listings for a male enhancement product that violates Facebook’s rules against ingestible supplements and sexually positioned products.
An analysis of account bios, friend lists and posting patterns shows the fake accounts appear to be controlled by people in Ecuador who often say they are affiliated with Omnilife, a Mexican conglomerate that uses multilevel marketing to sell health products. The accounts post Spanish-language Marketplace listings that prominently feature women in suggestive positions and tight clothing.
The listings, which were typically targeted to cities in Texas, are accompanied by text that tells men they can enlarge their penises or last longer in bed. Other listings for the male enhancement products used cucumbers and other phallic imagery combined with attractive women in suggestive poses. Some accounts in the network also used before and after photos — banned by Facebook — in Marketplace listings to market weight loss and male hair growth products.
ProPublica followed up with multiple sellers on Marketplace and was sent details for two Omnilife supplements that one seller said contain “nutrients that the body and limb needs to make a POWERFUL erection.” The price ranged from $129 to $159.99 for two boxes of supplements that each contained 30 doses. Multiple accounts identified themselves as being affiliated with Omnilife or used company products in their profile or background image. Some of the fake accounts claimed to be based in the U.S. and used stolen profile photos, while others listed their location as Ecuador.
Omnilife officials did not respond to attempts to contact them.
Facebook said it disabled some of the accounts flagged by ProPublica, banned others from posting to Marketplace and forced roughly 100 of the accounts to provide additional information in order to help confirm their ownership and authenticity.
The Money Maker
As Marketplace users lose money to scams and dubious products, Facebook earns revenue thanks to a range of increasingly profitable Marketplace advertisements that appear alongside free Marketplace listings.
In 2017 Facebook began placing ads on Marketplace listings from the millions of advertisers that pay to advertise across the company’s products. Starting in 2018, Facebook also allowed users to pay to “boost” a Marketplace listing to ensure it was seen by more people. Those new revenue streams are among Facebook’s most promising, according to company executives.
The company does not break out Marketplace revenue in its financial results, and declined to share figures with ProPublica. A spokesperson said that Marketplace remains a very small fraction of the company’s roughly $85 billion in annual revenue. But the product continues to be touted by Facebook executives as an increasingly important revenue source.
CEO Mark Zuckerberg praised Marketplace’s advertising growth on the previous company earnings call.
“Commerce ads continue to do very well and drive a meaningful amount of our overall business. We built Marketplace into one of the world’s leading services for people to buy and sell,” Zuckerberg said.
Reeves, the Louisiana IT consultant who tracks Marketplace scams, criticized Facebook for profiting from bogus vehicle and real estate ads. He’s spoken to real estate agents and others whose accounts were hacked and used to post advertisements on Marketplace.
“Facebook is an accessory by accepting money for scam ads,” he said.
Facebook said it invests heavily in ad review and that it refunds advertisers if their accounts were compromised and used to buy ads.
The Modern Pawn Shop
Last winter, police in Kansas began circulating an alert: Thieves had hit an equipment rental company three times in recent weeks, stealing two welding machines, two hydraulic pumps and an electric generator.
Their biggest score, though, was a white-and-orange Bobcat brand front-end loader, a piece of heavy earthmoving equipment that can sell for upwards of $50,000.
According to the bulletin, which ProPublica obtained, a man and woman rented the machine from the United Rentals location in Olathe — possibly using fake identification — and never returned it. The thieves then listed the Bobcat on Marketplace, eventually selling it to an unwitting victim for $13,500.
United Rentals and the Olathe police investigator working the case did not respond to requests for comment.
Experts said that Marketplace and other online sales platforms have transformed the business of theft, providing small-time crime rings and larger underworld operations with an easy way to unload stolen items. An August survey from the National Retail Federation, an association of chain and big-box retailers, found that 69% of respondents had seen an increase in organized retail crime over the past year.
“It’s the online marketplaces that are driving the increase in retail theft,” said Lisa LaBruno of the Retail Industry Leaders Association. “The thieves who steal these products en masse need platforms to sell their goods.”
LaBruno, a loss prevention expert and former prosecutor, continued: “You have online marketplaces that offer anonymity. And they have very few checks and balances to vet sellers or make sure that they aren’t selling stolen goods.”
Michelin, of the California Retailers Association, noted that many retailers employ teams focused on stopping the loss of inventory to theft by corrupt employees, shoplifters or thieves who target warehouses and supply trucks. But those loss prevention investigators often get stonewalled or ignored when they contact companies like Facebook to point out stolen goods, she said.
“We need these online marketplaces to be willing to sit down and work with us,” she told ProPublica. “My hope is that they don’t want this type of criminal activity happening on their websites and platforms.”
Loss prevention specialists who spoke to ProPublica said eBay monitors its sales listings far more aggressively than Facebook. The company uses both staffers and automated tools to actively search out suspicious ads and user accounts. In 2008, eBay began sharing information with retailers through a program called PROACT meant to stop the sale of stolen goods on the platform. The company, which says it complies with U.S. and international privacy laws, has also created a dedicated portal for law enforcement agencies seeking information about suspect listings. Last year it received roughly 5,000 requests for information from U.S. law enforcement agencies, according to an eBay spokesperson.
Federal legislation may soon force changes at Facebook and its competitors. The INFORM Consumers Act, introduced earlier this year by Democratic Sen. Richard Durbin of Illinois, is the retail industry’s attempt to bring accountability to online marketplaces. The bill would require online marketplaces to verify the identity of people selling goods on their platforms, among other reforms.
“Marketplaces have become the modern pawn shop, but with no accountability, no transparency and no physical address for law enforcement to investigate,” said Michael Hanson, spokesperson for the Buy Safe America Coalition, a group of traditional retailers pushing the legislation. “The anonymity they provide has made them a safe space for criminals to build a business model around theft.”
Companies including eBay, Etsy and Amazon are publicly opposing the proposed legislation, saying it would burden sellers with new regulations and favor big box retail chains. The Internet Association, a trade group representing Facebook and other large tech firms, has come out against the bill. “Big Retail needs to fix its own problem,” said the association in a statement. “The INFORM Act does not stop crime or counterfeiting in stores or online, but it will expose the private personal information of legitimate small business owners — many of whom are single person companies, often female-owned.”
Along with loss prevention departments at retailers, state and local police often bear the burden of responding to complaints and crimes committed using Marketplace and services like it. In a six-day span last month, police in one county in England reported 21 incidents of theft associated with Facebook Marketplace.
“We are urging those selling high value electrical items online, particularly on Facebook Marketplace, to be vigilant following a number of reports where people pretending to be ‘buyers’ have walked away with the goods after convincing the seller they have paid via bank transfer,” said an August notice from the Hampshire Constabulary.
“Violent Criminal Actors”
The FBI has long warned that Marketplace and similar services could be exploited by criminals looking for easy scores.
In a 2018 bulletin, bureau analysts said that “violent criminal actors” were “very likely” to “use online resale platforms to target victims for armed robberies.” The eight-page intelligence brief encouraged investigators to “become familiar” with Marketplace and 11 other platforms. In the bureau’s view, armed robberies were likely to become more widespread and “victims will continue to be victimized when both selling and purchasing items.”
From crime data, it’s impossible to tell whether such incidents have indeed increased — the statistics are not nearly granular enough. Facebook said it employs a specialized team dedicated to working with law enforcement that provides information and support on a wide range of requests.
But it’s clear that Marketplace is being exploited by criminals across the country. And, at least in some cases, Marketplace’s safeguards haven’t prevented those criminals from using the service to commit one robbery after another.
Early this year a federal judge sentenced a Missouri man to 10 years in prison after he had used the platform to set up three armed robberies. Prosecutors said the robber shot one of his victims in the leg. Ohio police in August arrested a teenager they said was responsible for at least a dozen robberies orchestrated through Marketplace. He was armed with a pistol when officers captured him during a sting operation.
A handful of these robberies have ended in murder.
It was June 1 when Kyle Craig set out from his home on Mississippi’s Gulf Coast and drove north to a small, run-down truck stop just off Interstate 55. He’d made arrangements on Marketplace to buy a used off-road vehicle. Craig was supposed to meet the seller, a stranger, at the truck stop.
When Craig failed to return or answer his phone, his loved ones became alarmed.
The next morning, Craig’s grandmother Debbie Steiner headed out with a small search posse, made up of a half-dozen friends and kin. Using a smartphone app, the group was able to pinpoint the exact location of Craig’s phone in a forest not far from the truck stop outside the town of West, a poor, rural outpost in central Mississippi.
There the searchers found Craig’s corpse lying in a swath of dense woodlands used by a hunting club. He had been shot more than 20 times.
“That’s when our whole world changed forever,” Steiner said. After the coroner hauled Craig’s body out of the forest, Steiner, weeping, bent down and kissed the ground where he’d lain. She didn’t know what else to do.
Much remains murky about Craig’s final hours, but his family believes the Facebook Marketplace listing that caught his attention and led him to Holmes County was a trap used to lure him to his death. Prosecutors have charged five men and teenagers in connection with the murder. All five have pleaded not guilty.
Sheriff Willie March told ProPublica that he believes four of the defendants were involved in a similar crime that occurred approximately a month earlier. The victim in that case was a man who posted a listing for a used ATV on Facebook and was supposed to meet a prospective buyer at a gas station about 20 miles down I-55 from the site where Craig’s body was recovered. But when the victim arrived at the gas station, he was robbed by a group of young men, who stole the off-road vehicle and took off.
March wasn’t sure whether the deal was arranged over Marketplace or through informal channels on Facebook.
“I know they were stealing a lot of four-wheelers, and they were using Facebook to advertise them to sell them,” March said of the defendants. He added that prosecutors haven’t brought charges related to the robbery because they’re focused on the Craig murder case, which is more complex and carries far more severe potential penalties.
Craig was robbed and killed when he attempted to buy the off-road vehicle, March said. According to the family, Craig was carrying at least $5,000 in cash at the time of his murder.
His family said the 26-year-old had spent the better part of a decade scouring online classified ads first on Craigslist and, more recently, on Marketplace in search of vehicles that he could buy and resell for a profit. For Craig, it was a full-time job.
Craig’s fiance, Shelbie Garbutt, didn’t consider his occupation to be particularly risky; her main worry was that he might get in a car wreck while traveling to acquire or drop off a vehicle spotted on Marketplace. “It kind of was just like any other job to us,” she said. “I never imagined something like this would ever happen.”
She recently celebrated the first birthday of their son, Brantley, without Craig. “Losing Kyle is so, so devastating to me,” Garbutt said. “It’s hard to even get out of bed some days.”
Disclosure: Craig Newmark, the founder of Craigslist, and the craigslist Charitable Fund have supported the work of ProPublica. One of the authors of this article, Craig Silverman, edits a book series for the European Journalism Centre, which has received funding from the Craig Newmark Foundation. Newmark is a shareholder of Craigslist but has not been involved in the day-to-day operations of Craigslist since 2000.