eBay: Selling Recalled Products Illegal

Online Marketplace Threatens Sellers With Site Ban And Fee Forfeiture

(CBS/AP)  EBay Inc. said Tuesday it is sending notices to sellers hawking recalled items, warning that they could be kicked off the Web site and may have to forfeit their fees.

The San Jose-based company, which listed 559 million items worth $14.46 billion last quarter, is also asking shoppers to be extra diligent about e-mailing or talking directly to sellers, and it's providing links to the government's database of recalled goods.

The warnings come after Mattel Inc. and smaller toy makers issued several high-profile recalls over the past few months involving at least 21 million toys because of concerns about lead paint or tiny magnets that could be swallowed.

On Tuesday, a random check showed 111 listings on eBay for Thomas & Friends Wooden Railway, made by Oak Brook, Ill.-based RC2 Corp. That product was recalled late last month for excessive levels of lead. Sellers listed more than 6,000 Mattel items, including numerous products covered by government recalls.

EBay, which said it cannot police the millions of new and used items for sale on its site, is providing a tip sheet and hyperlinks to a recall database on its product category pages and in popular forums such as the Toy & Hobbies discussion board.

It's also partnering with the U.S. Consumer Product Safety Commission to educate buyers about recalls.

"We see extra education as part of our responsibility in light of the recent toy recalls," said Catherine Schwartz, eBay's toy and gadget director. "Listing items on eBay which have been recalled is strictly prohibited and if the CPSC asks eBay to remove an item, we will take it down."

EBay, an online marketplace established in 1995, does not have its own inventory and prohibits numerous items but has little legal liability for products listed on its U.S. site.

Government watchdogs acknowledge they're still trying to figure out how to police and publicize recalls in the age of e-commerce.

"The rapid growth of online shopping exposes consumers to a different set of challenges in identifying potentially recalled or defective products being sold online," Acting CPSC Chairman Nancy Nord said.

EBay shares closed at $39.33, down 33 cents or less than 1 percent. In after-hours trading, they gained back 8 cents.