IF YOU are happily buying and selling products over eBay, don't forget there are risks involved.

A business that was among the largest in Australia selling on eBay has collapsed.

The owner has reportedly gone to China while thousands of buyers could be poorer by hundreds of thousands of Australian dollars.

Fraud investigators are reviewing 13 complaints against the company, according to Australia's ABC News.

The Queensland-based seller went by the name of ebusiness- supplies on eBay, but was registered with the Australian authorities as EBS International Pty Ltd.

It had sold over A$1 million (S$1.3 million) in just the last three months over eBay, making it the seventh-largest eBay customer in the country.

The business had customers from around Australia, hawking a bewildering array of products - everything from gym equipment and furniture to electric guitars.

But it was wound up last Friday, reported the Brisbane Times.

Some customers had paid using PayPal, which is owned by eBay; they are the lucky ones, since refunds will be funnelled to them through a fund established for this incident, Paypal said.

For the rest, there is little hope of refunds or ever seeing the products they had ordered. eBay had been notified weeks ago of complaints about the business but did not move to disable its user account.

Said PayPal spokesman Andrew Pippolo: "We're actually not liable for it, but it's something that, because of the circumstances of this particular seller, the impact on such a large number of buyers, we made the decision to make a fund available to pay the expense."

He said thousands of customers had bought items in the last few months.

The first signs of trouble had emerged in April, when EBS International had claimed to be under new management.

Orders were backlogged, sparking feedback from irate buyers.

Earlier this month, after numerous customer complaints, the company explained that there had been an "unexpected problem" with the arrival of containers that had been expected in June or July.

It promised a full refund to anyone who had ordered before June 1, while orders placed after June 15 would be filled by the end of this month.

But the company has stopped responding to e-mail from buyers, no refunds appear to have been made and now even its listed telephone number has been disconnected.

The liquidator, Mr Terry van de Velde of SV Partners, was reported in the Brisbane Times as saying that the director of the company is "in China at the moment so I haven't actually spoken with him".

"The reason they are telling me is that they sent money over to an agent in China... the agent hasn't sent the goods, the company's owed a substantial amount of money by the Chinese agent."