Pa. drops case against Internet retailer

A Pennsylvania agency dropped its prosecution of Internet retailer and former-stay-at-home-mom Mary Jo Pletz for selling on eBay without an auctioneer's license, according to a letter mailed to her home.

But the state is not retreating from a crackdown on eBay sellers who accept commissions for selling items online for others, state officials said. Those sellers need an auctioneer's license, they say.

Department of State spokeswoman Leslie Amoros said the agency that licenses professionals recently learned that Pletz had closed her business a year ago, leading to the decision to cease prosecution. "We are dropping this case," she said, "because the facts of this case changed."

Pletz and another Internet auction retailer, Barry Fallon of the Harrisburg area, are considered test cases of whether Pennsylvania's 1980s-era auctioneers law extends to cyberspace.

Fallon said the state was still prosecuting him for operating an Internet drop-off store without an auctioneer's license.

"I haven't heard a thing" about charges being dropped, Fallon said. He closed his store, iSold It, in 2007 after the state investigated him, he said. Fallon now works as a consultant for the company that bought his business.

Critics of the crackdown say the auctioneers are seeking to protect their business from the threat of eBay sellers by insisting on licenses.

But advocates of licensing say eBay sellers should be licensed to prevent consumer fraud, noting that the Internet was rife with illegal activity.

EBay itself opposes state regulatory action on Internet auctions around the nation and warns that it could threaten the livelihood of an estimated 430,000 people.

There are roughly 400 so-called Internet retail drop-off stores in Pennsylvania, according to state officials, and an estimated 14,000 state residents who earn most of their annual income selling on Internet auctions.

To resolve the issue, Pennsylvania legislators have introduced two bills on Internet auctions. One would create an electronic-auctioneer's license, costing $100 a year. As part of the license, the eBay Internet retailer would have to purchase a $5,000 bond, which would cost $40 a year.

A second bill would leave Internet retail auctions unregulated.

State Rep. Michael Sturla (D., Lancaster), who is chairman of the House Professional Licensure Committee, said negotiations continued on his bill to create a license and registration process for electronic auctioneers.

"At a minimum, we need to know who these people are and where they are located," he said.

In 2004, Pletz opened her eBay business, D&J Virtual Consignment, to stay at home with her infant daughter, Julia, who was diagnosed with a hypothalamic hamartoma brain tumor.

An investigator for the Department of State visited her in late 2006, telling her it was illegal. Within a week, Pletz shut down D&J Virtual Consignment. But the state filed a complaint against her in April. Then in December, it filed an amended complaint.

The first complaint said she faced a $1,000 fine for each violation of the state law and then separately noted that she had conducted 10,000 sales, leading her to believe she could be fined a maximum $10 million.

The state said her maximum fine was $2,000.

Pletz said the Feb. 1 letter stated that Pennsylvania dropped the actions because she had stopped advertising herself as a trade assistant on eBay and had stopped accepting commissions from others for selling on the Internet site.

The Inquirer profiled Pletz on Jan. 30 in a story on the crackdown on eBay sellers.

Pletz said she was now working in three different dental offices to help pay bills at home.

"I'm grateful there's an end to it," Pletz said of the state prosecution. But, she added, "I lost money to lawyers, and I have a few more gray hairs, and I lost my business."