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By David Rothman

eBookAd logoeBookAd says it’s thriving and is paying publishers every penny owed–despite a series of attempted credit card frauds from the Middle East and Asian countries such as Vietnam. I’ve talked to the company at length and so far I find its explanations entirely credible.

“Full royalties have been sent to all publishers who’ve had their cashouts delayed and have their accounts in good standing,” says Dustin Revin, president of the e-book retailer, distributor and Web infrastructure provider with more than 600 small publishers as customers.

Dustin shared with me an indication of the scope of the attempted fraud. Just one fraudster alone, using IP addresses from many locations, employed different cards to charge $4,673.17 in purchases through 24 transactions in just over two months, Dustin says.

A few of Dustin’s points:

–The problems affected just a fraction of eBookAd’s publishers, and the fraudulent transactions were detected early enough to keep losses extremely small–to the point where the main costs were in penalty fees charged by credit card processors. He says the attempted frauds were in the five figures, with only a fraction of that amount successful.

–Out of prudence, Dustin says, eBookAd needed to keep reserves on hand to guard against the uncertainties. He said his “biggest nightmare” was that he would pay small publishers for others’ fraudulent transactions. Then, he feared, they would compensate writers–only to be forced later on to request the money back from the authors or absorb losses.

–eBookAd has offered to pay a small “loyalty bonus” to “reward” publishers for their patience.

–The company has refined its software so that in the future, if transactions are questioned, the money involved will be isolated so publishers can receive other payments as scheduled. “With the new sytem,” Dustin says, “we can mark an individual transaction as fraudulent without the entire account being on hold.”

What’s more, Dustin says the new system would have flagged the man with 25 fraudulent transactions in two months. In fact, it successfully did so as recently as May 24.

–eBookAd does not directly collect credit card numbers of customers, he says, so no one buying books from the company should worry about even the remotest possibility of their numbers being stolen.

I’m buying eBookAd’s explanation. Two members of the eBook Community list complained to the list about eBookAd, and a third contacted me. Other than that, no other publisher emailed me–a stark contrast to the situation when publishers were reporting late payments from OverDrive. What’s more, Dustin says at least one of the complaining pubishers will be returning to the eBookAd fold.

Any other folks with problems? Email me via the information in the contact link at in the upper right of this page. Otherwise I think it’s time to move on to other concerns.

Richard Tuttle, in fact, one of the complaining publishers, has just written me a note that confirms my belief in eBookAd’s explanation:

I had a call today from Dustin Revin of eBookAd concerning publisher cash-outs and lack of communications. He explained that eBookAd has been the victim of a rash of fraudulent transactions. He was extremely apologetic, and his explanations and apologies were warmly received. Dustin also offered to pay extra because of the delay in attending to the cash-outs, but I refused the offer as my concern was more for the continued existence of eBookAd than the money. I am pleased that the [issues] of fraud and lack of communications are now behind us. I look forward to continued good relations with eBookAd as one of the premier ebook retailers and will be relisting my ebooks immediately.

I wish eBookAd and Dustin Revin the best as we all move forward to make ebooks a viable industry.

eBookAd’s revenue and growth: The company is privately owned, so, for competitive reasons, Dustin says, he is not releasing the numbers. But he does say that an indicator such as Alexa traffic counts would not be completely reliable since only a portion of eBookAd’s revenue comes from its own domain.

Further documentation: I’ve asked eBookAd for a statement from credit card people verifying the scoope of the attempted fraud.

Update: The statement just arrived. It’s far from definitive, but based on what Rich and another publisher, Jon Logan, are now saying, I don’t think this matter is worth examining further.

Ed’s paid: From Ed Howdershelt of Albintra Press, another of the complaining publishers, came the following note, dated June 3: “Abintra Press received payment from eBookad yesterday via Paypal for the amount plus a little to defray Paypal’s fee. Apparently eBookad fell victim to some overseas credit card scammers and had to freeze funds while they sorted out which charges were legitimate.”

Reminder: TeleRead and eBookAd are linking partners. Poor Dustin. I went out of my way to make certain the TeleBlog wasn’t playing favorites.

Update, March 29, 2006: As people reading my comments and subequent posts know, I have lost faith in Dustin. It’s for accountants and law enforcement agencies and courts to determine if he’s stealing from anyone. What is clear is that at the very least he is not communicating well with customers. For this reason, if I were a book publisher, I would not do business with him.

 
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