Hydra Sellers – The Terrifying Monsters of Online Marketplaces

The Hydra, in Greek mythology, is a terrifying mythical monster that has the body of a serpent with nine vicious heads. If one head is cut off, two new ones grow in its place. This make the Hydra almost impossible to kill. One of the Hydra’s heads can never be harmed by any weapon.

Just like the Greek mythical monster, Hydra Sellers are impervious to attack. When HMRC chops off one of their Online Marketplace accounts, the Hydra Seller quickly grows two new accounts. The Hydra Sellers unstoppable rampage continues with them selling more VAT free, counterfeitnon-compliant & dangerous goods, sold on the back of fake reviews, to their unsuspecting victims.  Most of their goods will quickly end up discarded and recycled at the tax payers expense.

The Hydra Seller’s head that can never be harmed, often resides in Shenzhen, where it is completely out of reach for HMRC to prosecute.

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Make Online Marketplaces Collect VAT

HMRC must introduce measures that will make Online Platforms collect VAT.

Tackling Online VAT Evasion has now become a top priority for governments and authorities across the globe. The general consensus is to make Online Marketplaces collect the VAT. The EU estimates €5 billion of VAT is lost each year in the EU due to non-compliance on cross-border online sales.

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FBI Says ISIS use eBay to send terror cash

Products listed at astronomically high prices on eBay appear to be real transactions when sold but are in fact methods to launder and secretly send cash. This simple, popular ruse has been used by Islamic State to funnel cash to operatives in the Middle East.

U.S. investigators uncovered a global financial network run by a senior Islamic State official that funnelled money to an alleged ISIS operative in the U.S. through fake eBay transactions, according to a recently unsealed FBI affidavit.

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NON Compliant Goods and WEEE Regulations

A recent study was undertaken by the WEEE Scheme Forum, to check the compliance of products sold through a major online marketplace with the WEEE regulations.  The study showed that 54% of power tools, 76% of LED lightbulbs, and 88% of fitness watches did not comply.

Commenting on the study, Nigel Harvey, Chief Executive of Recolight and Eucolight Vice President said: ‘Evidence shows there is large scale WEEE non-compliance sales through online marketplaces.  High street retailers have, for many years, checked the compliance of equipment producers.  Online operators could – and should – do the same.  There can be no excuse for knowingly aiding the sale of products that break the law.”

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Introduce Third Party Liability for Fulfilment Houses

Overseas Sellers are flooding the UK with counterfeit or unsafe products that don’t comply with EU Safety, Packaging and WEEE standards. These goods can be manufactured at a fraction of the cost of compliant goods.

Under current laws, if a UK consumer dies after buying a dangerous item from a Chinese Seller on eBay, there is absolutely no one that can be held liable. Liability lies squarely with the Chinese seller who is completely out of reach from prosecution.

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Online Marketplaces – Unlawful Anti-Competitive Behaviour

Online Marketplaces are distorted in favour of unlawful anti-competitive behaviour by non-complaint sellers. This has resulted in compliant sellers unable to fairly compete on a level playing field and going out of business.

Online Marketplaces are allowing unlawful anti-competitive behaviour and abuse by non-complaint sellers in the following areas:

  • Allowing a seller to operate more than one seller account, with some sellers operating 32 accounts selling the same products.
  • Allowing sellers to list a single item multiple times
  • Allowing overseas sellers to register multiple UK seller accounts using cloned company details without any verification process.
  • Allowing overseas sellers to list items as being located and dispatched from the UK when the items are in fact dispatched from China.
  • Allowing seller’s Online Marketplaces accounts to be linked to PayPal accounts that belong to a completely different business and legal entity.
  • Taking limited or no action against sellers who clearly sell counterfeit, dangerous and non-compliant goods.  Even when it is reported to them
  • Taking limited or no action against fake and paid for product reviews.
  • Offering fake deals, retail prices and sale prices in order to generate sales.

Unlawful anti-competitive behaviour on Online Marketplaces like eBay must be stopped. It is clear that we can’t rely on the Marketplaces or sellers to do this. New regulations need to be brought in by the government to ensure unlawful anti-competitive behaviour is stopped.

State Aided Chinese Fulfilment Houses in UK

The Chinese government is currently investing heavily in Chinese owned companies to setup fulfilment infrastructure throughout Europe and the UK.

Quote from Chinese Government Website:

“We will support enterprises to build overseas storage of export goods and overseas operation centers.”

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What is a Chinese seller doing with 36 eBay Accounts & 25 VAT Numbers?

The latest Chinese eBay scam; a Chinese Seller operating 36 eBay accounts, has 25 VAT numbers and prices that are too good to be true.

We noticed this best selling Desktop Mobile Phone Stand on eBay for £3.99 including delivery.  This product would be impossible to sell for £3.99 if the correct VAT, postal rate, fulfilment charges, import duty & import delivery was charged. A second class stamp alone would cost £2.71 to send it because it is “packet” size.  So we did some digging and here is what is going on:

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Sellers who have been removed from eBay in last 18 months

We thought we’d share 356 eBay accounts that have been removed from eBay.co.uk in the last 18 months.  Most have only had their UK selling privileges removed & no longer sell stock that is located in the UK.

Some of the sellers are now trading in other EU countries or have stopped selling all together

This list will be updated again soon – we still have more data to work through..

OIG.BUY – GB 240279618




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A Complete Guide on How Amazon Phoenix Accounts Work

Example Amazon ASINNon-EU Overseas Online Retailers can setup a new Amazon account under a completely separate company name. Once a new account has been setup, the seller can attach the account to all their old products listed on Amazon.

Every seller account is given a unique identifier number that is used to identify the seller on the Amazon website and view their storefront, company details and trading history. Every product listed on Amazon is given a unique code called an “ASIN”  short for “Amazon Standard Identification Number”.  These ASIN’s are used to identity products on the Amazon website.  When a product is added to Amazon the ASIN  and product become a permanent part of Amazon’s website catalogue, along with all its sales history, reviews and ranking.

When a seller is removed from Amazon, only the seller account is removed. All their products are left on Amazon and can be found by searching for the ASIN.  This is completely contrary to what HMRC has led the Public Accounts Committee to believe.

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Seizing Stock, Freezing Funds & Block Listings

HMRC has not seized a single item of stock, frozen any funds or blocked any listing from VAT evading overseas retailers using Amazon UK warehouses. These are the only assets in reach of HMRC.

VAT Evading Overseas Retailers are simply shutting up shop and start trading under a new (VAT compliant) company the next day with the same stock, on the same highly ranked product listings without paying a penny of their evaded VAT. If a UK based seller did this they would end up in prison. This is not a level playing field or a fair legal system.

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Make All VAT Registered Non-Eu Overseas Online Retailers Appoint Fiscal Representatives

Non-EU Overseas Online Retailers who hold stock in the UK are totally out of reach from prosecution by HMRC under the current laws. They are safe in the knowledge they can simply disappear without paying any undeclared VAT and reappear under a new company without any prospect of HMRC prosecuting them.

  • HMRC has issued over 43,500 VAT numbers to Non-EU Overseas Online Retailers (mostly since 2014).
  • HMRC estimate Online VAT Fraud is £1.5 billion a year, 60% of which is by Non-EU Overseas Online Retailers.
  • HMRC has only collected £150 million in VAT from Non-EU Overseas Online Retailers; about £37 million per year.
  • £37 million represents 3.89% of what should be collected.
  • This equates to a total of 96.11% or £865 million that is still going uncollected.

The system clearing isn’t working. It is completely and utterly broken.


The UK must follow in the steps of France & Italy who require Non-EU companies to appoint a Fiscal Representative and Bank Guarantee.

  1. Make all Non-EU Overseas Online Retailers appoint a Fiscal Representative and Bank Guarantee
  2. Make all UK Registered Companies owned by Non-EU Residents appoint a Fiscal Representative and Bank Guarantee

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Strengthen Online Marketplace Seller Checks

HMRC’s Online Marketplace Seller Checks do not go far enough and have huge loopholes being exploited by Overseas & UK Sellers.


At present Online Marketplaces such as eBay, only checks an Overseas Sellers VAT number is valid and matches the business name. eBay doesn’t check if the seller is the actual legal owner of the VAT number & business name.

This allows:

  1. Overseas Business Sellers to use and share company names & VAT numbers that do not belong to them.
  2. Overseas Business Sellers to pretend to be UK sellers and use made up company names & address without having their business details verified at all. The seller also doesn’t have to provide a VAT number.
  3. UK Business Sellers can also provide made up company names & addresses. This sort of seller usually sells counterfeit and dangerous goods.
  4. Company names and VAT numbers can be changed daily by a seller on eBay.

Amazon fully verifies a seller business details under the EU Anti Money laundering legislation because Amazon handles all payments.

However eBay does not have to adhere to EU Anti Money laundering legislation because they don’t handle payments; PayPal does.

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Stop Duplicate Accounts & Listings on eBay

Joe Billante, eBay Vice President, told the Public Accounts Committee on 13th of September 2017 that sellers can’t operate multiple accounts if they are selling the same products in same categories and that eBay have internal systems in place to ensure compliance.

Joe Billante statement to the Public Accounts Committee:

“It may look like they have 20 accounts because they put certain categories of certain goods into different accounts.”

“If the same seller wants to operate five accounts because it operates in five different categories, we are able to see that information internally as the seller signs up. We are able to link that together in our systems.”

Reference: PAC Hearing – 13 September 2017 – Tackling online VAT fraud and error inquiry – Oral Evidence Transcript – Q62 & Q67

eBay Duplicate Listing Policy

eBay states it’s against eBay policy to operate duplicate accounts and listings:
“Not allowed; Duplicate listings policy; Selling identical item listed separately by Multiple accounts belonging to same seller”

Reference: eBay Duplicate Listing Policy

eBay Takes No Action against Duplicate Accounts & Listings

eBay does allow sellers to operate multiply duplicate accounts with duplicate product listed in each account. eBay takes no action against these “Bad Actors”, even when it is reported to them. This means “Bad Actors” can dominate eBay & Google Shopping search results with lots of listings of the same product, pushing out the compliant sellers who only list one product. This is putting compliant sellers who play by eBay’s rule book out of business.

Most of the “Bad Actors” are overseas sellers, with many being listed in the Top 10 eBay Sellers in the World and making multi millions in sales. (https://www.webretailer.com/lean-commerce/worlds-top-ebay-sellers/).

eBay is more interested in protecting its revenues, putting its profits before its policies, the UK High St and not ensuring eBay is a level playing field for all sellers.

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Philip Hammond Autumn Budget 2017

Our campaign has now pressured the UK Government to introduce stricter legislation to prevent VAT Fraud on the internet. Introduced in the Finance Bill in November 2017 the legislation makes online retailers such as eBay and Amazon liable for VAT fraud that they know or should know is taking place and it also ensures that VAT numbers of Third Party Sellers are listed. However much more needs to be done (such as confiscating stock and removing fraudsters listings).

HMRC have for many years failed to pursue strong enforcement where the existence of fraud has been obvious.