Shill Bidding on eBay: Case Study #2

Shill Bidding on eBay: Case Study #2

Shining some light on the more sophisticated and therefore harder to detect shill bidding activity by some “professional” sellers on eBay auctions

This time a spreadsheet analysis of multiple auctions from some "professional" sellers from the US and Australia. Needless to say the analysis demonstrates, once again, that, contrary to eBay's claims, shill bidding by many “professional” sellers is rampant on eBay auctions. The full comment and spreadsheet download links at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24296

And, the earlier case study of blatantly naïve shill bidding at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24033

And my even earlier ramblings on the matter of “hidden bidders”, “eBay introduces absolute anonymity for (shill) bidders” at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=23227

A most disingenuous, unscrupulous, criminal organisation—eBay that is.

 

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This is an absolutely thorough analysis. It will take me hours to absorb your information but from what I have read so far you are very, very correct. All Ebay has to do is look at what is happening and get the guts to do something about it. This isn't the only aspect of Ebay where things are going against the consumer - there are many others.

 

Is 'shill bidding' illegal, or against eBay rules? If so, shame on them. We can spread the word and boycott them. What are our other options?

 

Shill bidding is absolutely against eBay's rules. So long as you can prove it (really prove it, not just present innuendo), report it. If eBay agrees, they will absolutely take action.

 

Firstly, shill bidding is criminal fraud. Secondly, with masked bidding IDs it's not possible for a mere bidder to "prove" anything. Thirdly, eBay won't do anything of a sort even if you are 100% convinced. Unless their primitive tools find something obvious like a common IP address (the real pros aren't that silly), eBay will happily do absolutely nothing—believe me, I've had the experience, as I have no doubt have many others ...

If you want an understanding of the deviousness of this effectively criminal organisation waste an evening and read at least the two OP-linked auctionbytes.com posts on "shill bidding" ...

 

If we, as bidders, just bid the maximum amount that we are willing to pay for the item, and the shill bidding drives it higher, we should feel okay. If the shill bid is the highest bidder, and it's the person selling the coin, then they're stuck with the coin and the associated fees.

 

How is shill bidding criminal fraud? (Not doubting you yet, just genuinely curious)

 

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I am a little surprised that anyone (other than possibly an eBay seller) could not appreciate that shill bidding is fraud; it is no less a deception than is inviting someone to contract to purchase a good with a false description of the good: deception for the purpose of gaining, or even attempting to obtain, an advantage is fraud, and is proscribed as such in all civilized countries.

Even eBay recognises that shill bidding is fraud; that’s why they say it is not allowed. The big difference is that, in eBay’s case, only their words recognise this fact; their actions clearly show that they do not care at all and that it can be quite easily demonstrated (read my posts thereon) that all their pontifications on the matter are totally hypocritical.

For any individual to not understand that shill bidding at an auction is a deception and therefore fraud, I find quite amazing. insult removed

Undoubtedly there are in the US, state and federal laws against such activity. I can only quote you a summary of the laws about fraud in the UK and Australia, but the gist will be the same; summary at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24316

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Several problems: eBay’s proxy bidding system is so open to abuse by unscrupulous sellers that to early-on place a maximum value bid may well be an invitation to indeed pay that maximum amount. Sort of defeats the purpose of having an auction in the first place. Even if the shill wins his own auction he then will avoid eBay’s FVF by claiming the “buyer did not pay”. Well, does any auction-winning shill ever pay? And undoubtedly eBay would be keeping an eye on this “leak” of revenue and they would very well know what is going on.

A most unscrupulous commercial organization—eBay that is.

 

What do UK and Australia laws have to do with US auctions? To the best of my knowledge, there are no laws against shill bidding in the US.

 

E-bay has lost the trust of the American consumer!!

 

The laws of most western countries are based upon the common law of England; there is a common thread; and I can assure you, without being able to quote you a link, that undisclosed vendor (shill) bidding at an auction is unlawful in the US.

Try a google search yourself.

 

We just went through a whole big to-do about Heritage. Unfortunately, some people got carried away and they had to delete the thread. It seems they are doing, in essence, the same thing - legally.

 

You still have not explained why shill bidding is criminally fraudulent. I understand that its against ebay's terms of use, though.

Picture it like this: An auctioneer is selling an item. The bidding is currently at $15. He is willing to pay $30 (to myself, a closed transaction) to keep it. How is the auctioneer different from any other bidder? How are his actions morally reprehensible? I suppose you can make the argument that the bidders didn't know it would occur. But neither are they aware of what anyone else will bid, for that matter.

Furthermore:

Therefore, provided the auction house notifies the bidders in their guidelines, they are free to bid as they wish on their own items.

With regards to your insulting and pejorative jabs at my education, I have forced myself to curtail my original three-word English response. For those of you who ARE educated, here is the same in Latin: REMOVED.

 

Very good write-up Philip, and I agree shill bidding is a major problem on the Bay.

On a constructive note, if I may, I'd be careful in what what images I use in public op's such as you shared with us. Wiley doesn't usually mind people using his images for stuff like that, just so long as a hyperlink is added imbeded in the image itself, and not below. I know it seems as odd comment, but copyright law is a touchy subject for artists. If you like, I can run it by him...I'm sure he'll approve, and it adds to the subject quite nicely.
Guy~

 

There is always Stack's, Teletrade, Heritage, etc. where you might feel more peace in your participation. Welcome to the forum!

Jim

 

A Seller has the right to set an auction "minimum" or "reserve". Failure to do so implicitly declares an auction "No Reserve". For a Seller (or a Seller's agent) to bid on the auction would constitute a blind reserve which (imho) is fraudulent in a No Reserve auction. :hammer:

 

Not that I've ever "shill bid"(had never even heard of it until now), but maybe the sellers are just circumventing Ebays ridiculous reserve fees and beginning bid-based listing fees. Maybe they're just using it to make sure it sells for what they are willing to take while at the same time paying as little in fees to Ebay as possible. Granted Ebay could stand to make more in FVF's by the buyer doing this, but the seller didn't fall victim to thin liquidity and sell a coin for way under value. Hmmm...ethics. Something to think about. I just think there are much more egregious instances of fraud going on on Ebay that both buyers and sellers(of coins at least) should focus on.

 

Goes back to my point that Ebay perpetuates this somewhat. Why charge a fee for a reserve price?

 

Also, whether shilling is right or wrong, don't make statements about fraud and then tell others to Google it when challenged. Come on. We know how forums work! We all know the OP googled it as soon as challenged(that's what all of us posters to forums do!) and obviously he exhausted the time that he had available and couldn't come up with anything, so he puts the burden of proof on those questioning HIS claim.

 

Some interesting articles...

The US law that prosecutes "Shill Bidding"
http://www.law.cornell.edu/uscode/18/1343.html

See item #17
http://michiganauctionsales.com/terms.html

An eBay case from 2004
http://www.consumeraffairs.com/news04/shills.html

Another Auction House Case
http://archives.chicagotribune.com/2008/aug/05/local/chi-sports-auction-probeaug05


eBay examples of "Shill Bidding"
Here are just a few examples of shill bidding activities that are prohibited on eBay:

• <LI class=unorderedList>Jean runs a successful business auctioning items on eBay. Ben, one of her employees, wants to buy some of her products and decides to bid on them. But because he works at her company, he has access to information that wouldn't be available to other eBay shoppers, giving him an unfair advantage.
  
  <LI class=unorderedList>John is selling his extra MP3 player on eBay. During the auction his girlfriend, Jane, bids on the MP3 player even though she doesn't intend to buy it. (They'd like to increase the item's price and make it seem more desirable.) Another person, Dan, whose bid is $5 higher than Jane’s ends up winning the auction, but he paid a higher price than he should have since Jane placed a phony bid.
  
  <LI class=unorderedList>Sally is selling her car on eBay. During the auction, she gets worried that her car might sell for less than the amount she's hoping to get. To make sure that no bidder can win her car for less than what she has in mind, she uses another eBay account to place bids on her own car, increasing the volume of bidding and raising the price to a level she thinks is fair.
  
• Bob is a high-volume seller on eBay and wants to be sure that he never sells at a loss. Rather than use the reserve price feature to set his minimum prices, he has someone place bids on his auctions, setting a hidden reserve price.