Friday, May 06, 2005

Craigslist and fraud

The AP's running an interview today with Craigslist founder Craig Newmark. Much of the information about his new interest in community journalism -- which AP led with and which is the angle most other sites have breathlessly picked up -- is not particluarly surprising (given all the hints he's been giving out in his blog musings lately, plus earlier interviews with and the Mercury News), but there is one interesting nugget: The wildly popular mostly free classified ad site has so much fraud in New York that it's thinking of charging for apartment ads there:

Craigslist CEO Jim Buckmaster says fraudulent postings - from Nigerian money laundering scams to solicitations for multilevel marketing pyramids - represent less than one-tenth of one percent of listings. But the New York section is now so rife with con artists that they may begin charging landlords to discourage illegitimate listings.
In the interview, Newmark had briefly mentioned some problems with New York brokers, but did not elaborate much. The AP story says Newmark, who sits on a three-member management board, spends about half of his 40-hour workweek sifting through e-mailed complaints of scams and fraud, most of them "bait and switch."

That giant hissing sound you hear in Columbia, by the way, is the air being let out of the local classified ad market. Craigslist has added more cities, among them Columbia. Not sure how long it's been up, but I seem to recall checking a couple weeks ago and not seeing it. It already has 308 services ads, 146 items for sale, 119 housing and 321 personal. That last is interesting, since the personals in the local alternative paper, the Free Times, have dropped noticeably of late. Right now, it looks as though the Columbia site is being used for a lot of listings throughout South Carolina.

I let a few newspaper folks know -- some weren't aware -- this afternoon. The response from most of those I could reach: Thanks for ruining my weekend.



At 5/6/05, 8:13 PM, Anonymous Anonymous said...

This is not news. Craig has been talking about charging for New York apartment listings since last July.

What is news is that journalists across the country willingly suspend disbelief when dealing with Craigslist and swallow and repeat all sorts of patently incredible junk.

1/10th of 1% fraudulent postings? Ridiculous. Even a passing familiarity with real estate markets is enough to understand that the numbers in New York are far, far, far higher.

I pine for the good old days when we had real journalists, who would have ridiculed this so-called community and openly mocked a leader so ineffective that he spends the better part of a year dithering over whether and how to protect his sheep from the ravenous wolves.

Is there anyone in the journalism community who's willing to begin taking a realistic look at what really goes on on Craigslist? One would think that self-interest alone would impel such an examination.

At 5/6/05, 9:49 PM, Blogger Doug said...

I don't read the AP story as saying it's 0.1 percent in New York, but overall. It's apparently much higher in New York, though the AP fails to tell us exactly how much higher. And that nationwide average could be depressed by the continued opening of new sites. It seems to be the rip-off artists are likely to wait for a new site to become established before stepping in.

Your thoughts were, in part, my reason for discounting the journalism stuff ("Much of the information about his new interest in community journalism is not particluarly new ...") and emphasizing the fraud. That, to me, seemed a much better story that was not pursued. It's a valid point and a good business story that gets brushed over.

I hadn't seen the N.Y. stuff as far back as July, nor had I seen as pointed an acknowledgment of the fraud problems. But good to know. Thanks.

At 5/6/05, 9:51 PM, Blogger Doug said...

BTW, Joe, we should note that as chairman and founder of Data Based Ads Inc., you do have a dog in this hunt.

At 5/6/05, 10:16 PM, Anonymous Anonymous said...


I'm hoping to have more than one dog in this hunt, and hoping that an energized pack helps newspapers bring the Craigslist beast to bay.

I thought my interest in the hunt would be clear from the link to my Web site. If not, thanks for highlighting it.

All that to the side, we all need to take a closer look at the Craigslist "community" for what it is, not for what an idealized Craig would like it to be.


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