More than 500 people across the country paid for items auctioned through the Yahoo site -- such as liquid-crystal televisions and digital cameras -- but did not receive the goods, said Noboru Mizuno, who leads the group.

"Yahoo knew about the fraud but let it continue," Mizuno said.

The group has taken the case to Nagoya District Court, demanding ¥115.6 million in damages.

A spokesman for Yahoo Japan said the site had warned users against possible fraud and compensated for it in proven cases.

"Yahoo is a system that links auctioneers and bidders," the Yahoo Japan spokesman said. "It is fundamentally the users' responsibility."

Since 2001 Yahoo has promised to pay 80 percent of the bidding price up to ¥500,000 in compensation to defrauded bidders if they are proven to have followed Yahoo's warnings.

The payments Yahoo made to those victims amounted to an almost ¥700 million in 2004, the spokesman said.

The Japan Times Weekly: April 9, 2005
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