Advertisers find that on Craigslist, it's survival of the sneakiest

Doug Kelley was perplexed when Craigslist ads for his Sacramento carpet-cleaning business started disappearing from the popular Web site. Every time he re-posted one of his classified ads, it would vanish – often within minutes.

After competitors' ads started showing up, some of them openly denigrating his company, West Coast Carpet Care, Kelley knew he had a problem.

Since then, Kelley estimates he has spent $11,000 in attorney's and court fees fighting his online business adversaries.

"You'd think (Craigslist) would want to get rid of the tweakers and keep good-quality, licensed business people who are productive members of society," he said.

Like other small businesses worldwide using the free classified Web site, Kelley stumbled last year onto a little-known dark side of Craigslist.

Some critics say it's a situation where anything goes, including slanderous attacks and competitors ejecting each other's ads in a process called "flagging."

Using conventional software to circumvent Craigslist rules, some individuals have figured out how to quash competition by removing ads of their rivals, whether they're house-cleaning services or real estate sellers.

Craigslist employs an automatic tool that yanks offensive or false ads if enough different users flag them. The problem: Single users can cheat the system with software that makes the flagging appear to be from multiple users.

It's a different form of Internet advertising sabotage, similar to "click fraud" where individuals repeatedly click on a rival's paid Web advertisement on Google or other search engines, to run up their rivals' costs.

They're also slamming each other with accusations of false advertising, bad business practices and even criminal activities.

"They're cyber-trashing each other, whether bumping each other's ads off or defaming each other's products," said Parry Aftab, executive director of WiredSafety, a volunteer network dedicated to Internet security issues.

She said it's much more likely to occur on a more freewheeling site such as Craigslist.

"They can't do that if they're trying to buy an ad in your paper. They can't do it on eBay because … you'll get in a lot of trouble with eBay. There is less moderating and less oversight of what users are doing on Craigslist."

In an e-mail, Craigslist's chief executive officer, Jim Buckmaster, said, "We are continually updating our systems to combat 'black hat' software of every kind."

He also said "remedial measures, including account suspension, are routinely taken against those violating site guidelines."

That's of little comfort to Kelley and other Sacramento-area business owners who rely on the free advertising offered by Craigslist. They say they've spent scores of hours fighting the flagging practice.

Last May, after tracing the person he believed was killing his ads, Kelley filed a lawsuit in Sacramento Superior Court against James D. Smith, owner of Mother Nature's Clean Green house-cleaning service.

Smith could not be reached for comment. The cell phone number listed with the county licensing division is out of service and his business address is a Florin Road apartment where no one answered the door Wednesday.

Kelley said he filed the lawsuit after Craigslist officials would not respond to his repeated complaints about unfair flagging. He sued for libel, defamation and unfair competition charges, his attorney said.

"We subpoenaed Craigslist last October," said David Barrett, Kelley's Sacramento attorney. "We gave them specific ads that were flagged and this guy's posts and wanted his IP (Internet address) information. We wanted to make the connection. … They never responded."

A Craigslist official said in an e-mail the company can't comment on a pending lawsuit.

When Smith failed to appear, Kelley won a default. A trial is set for June, but he is unsure whether he'll pursue the case.

Another Sacramentan, Kevin Koutney, who runs a used vending machine business, had a similar experience. When he tried expanding to Reno and Las Vegas, he encountered opposition from a competitor who he said repeatedly flagged his Craigslist ads.

Koutney said he recently spent 15 hours over a weekend re-posting his ads.

"I don't want him to drive me out of business," Koutney said. "I've probably re-posted over 400 ads."

Marianne Kim, a Coldwell Banker real estate agent in Roseville, says she too was a victim.

"My ads would be flagged immediately," she said. "We tried to locate the person who was doing it but haven't figured it out. Once I took my name off my ad, it would go through. It was so irritating."

Like Kelley and Koutney, Kim said she complained to Craigslist but got nowhere. "I e-mailed Craigslist several times asking how to get them to stop. I got no response at all," she said.

With 30 million new classified ads posted monthly, Craigslist is bound to get a few complaints. CEO Buckmaster said his firm always responds quickly.

"All abuse reports made through our 'abuse@craigslist. org' channel are handled by humans, typically within minutes or hours," he stated in an e-mail.

Asked if the 25-person company, which operates from a San Francisco house, has sufficient staffing to deal with complaints, spokeswoman Susan MacTavish Best said, "We definitely do."

Others disagree.

"Craigslist," said attorney Barrett, "is the freakin' Wild West."

About the writer:

• Call The Bee's Mark Melnicoe, (916) 321-1976.