Victory for Scammed Kiwi: Trade Me Ordered to Pay $4,900 After Disputes Tribunal Battle
By Lions Roar News Consumer Desk
NELSON, NEW ZEALAND (December 28, 2025) – In a landmark victory for consumer rights, a Nelson small business owner has successfully forced Trade Me to reimburse him $4,900 after falling victim to a sophisticated “hacked account” scam. The ruling by the Disputes Tribunal sets a major precedent, suggesting that online marketplaces may be held liable if their security measures fail to protect members from authenticated but compromised accounts.
Jarrod McGregor, the buyer at the heart of the case, described his months-long battle as being like a “dog with a bone,” refusing to accept the loss after both the police and his bank told him the money was gone forever.
? The “Dream Machine” Scam
In July 2025, McGregor attempted to purchase a top-of-the-range coffee machine. He performed his due diligence, noting the seller had a long trading history and 100% positive feedback. He hit “Buy Now” and transferred $4,900.
The Reality:
- Account Takeover: A scammer had hijacked a dormant but “authenticated” Trade Me account.
- The “Mule” Loop: The scammer used the hacked account to list the fake machine, but provided the bank details of an innocent Auckland resident.
- The Crypto Twist: The scammer was simultaneously “buying” cryptocurrency from that Auckland resident. When McGregor’s $4,900 hit the resident’s account, the resident released the crypto to the scammer, thinking the payment was for the digital coins.
- The Result: The scammer got the crypto, the Aucklander got paid for their crypto, and McGregor was left with no coffee machine and an empty bank account.
⚖️ The Tribunal’s Hammer: “Failure of Care”
Trade Me initially argued that it was merely a platform provider and, under its terms and conditions, was not responsible for losses between third parties. However, Disputes Tribunal referee Jeanette Tunnicliffe disagreed, ruling that the site had failed to provide its service with “reasonable skill and care.”
Key Findings Against Trade Me:
- Security Gaps: The hacker was able to change the account holder’s name, address, and location without triggering any security alerts or notifying the original owner.
- Lack of Mandatory MFA: Unlike global competitors like Amazon, Trade Me did not have mandatory multi-factor authentication (MFA) for high-risk changes.
- The “Weekend” Problem: McGregor provided evidence that while fraudulent activity was reported on a Sunday, the company’s response was delayed until Monday, allowing the scam to complete.
?️ Trade Me’s Response and Future Changes
Trade Me has since reimbursed McGregor the full $4,900. While the company stated it did not agree with every aspect of the ruling, it confirmed it has respected the decision.
Lisa Stewart, Trade Me’s Head of Marketplace, noted that the site has recently introduced “adaptive MFA” and login verification prompts for accounts that have been inactive for long periods.
“Now we have a blueprint for what to do and the arguments to make for a case of responsibility being with Trade Me,” said a victorious McGregor.
As for his “dream” coffee machine? McGregor says he’s decided to stick with his current Breville for now.
