The way the scam works, is that a group of people (or one person) register multiple accounts. For each account they put up a cheap item to sell. Each account buys the other's cheap item. They are then able to leave each other positive feedback. They do this a number of times until they get a decent amount. In this case they did it so each of them had 10 positive feedbacks.
Once they each had 10 positive feedbacks, they then put up phony auctions with high dollar items with cheaper BIN prices than anyone else to get people to buy it quickly.
Not everyone looks at the previous transactions that a person has done. They just see the 100% positive feedback and use the BIN feature.
They had auctions going in most territories - USA, UK, EU, etc. But the items' location was China.
No worries about the rant, but out of sheer personal curiousity; why does China get free listings? I don't understand why we have to pay out the ass so that China can list stuff for free? Is there magic involved?! Ancient Chinese secret perhaps???? Seriously though, I am curious about it.
China gets free listing (and pays no final sale fees), because eBay had the hairbrained idea that they could really increase eBay profits by opening up the Chinese market.
Also, there is a China auction site (I forgot what the name is offhand, but Yahoo bought 40% of it - I think it's Alibaba, but I could be wrong), that eBay is trying to 'overtake' in becoming the #1 auction site there. To do that, they decided that all auction listings, stores, and final fees will be FREE.
Ebay also does not require China buyers/sellers to become verified (meaning having a credit card on file to verify your address). Each person is able to register thousands of accounts (yes, for ONE person). Bogus addresses, bogus items, bogus listings.
Not everyone in China who sells is bogus. There are some good people. These good sellers also complain to ebay about the "China Syndrome" running rampant over there.
The situation is frequently talked about on the ebay forum boards.
Hopefully, that helps clear things up a bit for you, Rob!