London Coins-- another suspicions of shill bidding thread

I won a coin from London Coins for the first time over the weekend. I was slightly annoyed that there was no transparency about the bid system (like updated pre-bids on biddr, or anyplace to watch the auction live). And, when I received my invoice this morning I was somewhat surprised to find out that the lot sold for exactly my rather arbitrarily placed max pre bid of £230. Per the title of this thread this automatically raised my suspicions of shill bidding on the part of the auction house.

One instance could of course be a coincidence, which is why I'm coming to you my fellow cointalkers, to see if there's a pattern. Has anyone else bid with London Coins and experienced something similar?

 

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Here's an article I found that discusses suspected shill bidding at London Coins. Evidently the consignors sometimes bid on their own coins, though if London Coins sees this they'll remove the bids. Also, there's no way for the consignor to see your max.

After trying a few experiments at several different auction houses, it's my belief that shill bidding is real. There are certain companies I suspect more than others, but I've moved to placing no pre-bids and to do all my bidding in the live part. Unfortunately, even that doesn't completely protect against shill bidding because those companies with their own software can easily perform it automatically to ensure that whenever you submit your bid, you'll always pay near your max.

As a buyer, I really think there's only three things I can do to combat shill bids:
1) Send all of my bids live
2) Understand that, at certain auctions at least, I need to be prepared to pay my max.
3) For auctions I suspect to have automated shill bidding, only bid if there's something I know I'm not going to find elsewhere.

 

Is this the same dealer as London Ancient Coins on V-Coins? If so, I didn't know they also did auctions.

 

I don't believe they're related.

London Coins
London Ancient Coins

FWIW, I've bought from London Ancient Coins and was very happy with them.

The same company that owns London Coins also owns a grading service.

 

I've probably bought more coins from London Ancient Coins than any other dealer, and also have only good things to say about them.

 

I haven't won many lots in London Coins auctions, but I know a couple of them hammered at below my max. One time I also had the max bid but didn't get the coin because it had an unpublished reserve.

 

I've won things at my max on occasion, but also at hundreds below my max at other times. I've also lost at my max to a prior commission bid at the same level

A bit of context would be helpful here, such as the coin in question, how popular the item is, and what other similar things are selling for in the current market.

A lot of psychology goes into bidding and the number of people bidding on coins has increased disproportionately since lockdown, leading to some eye watering prices in the case of live auctions where shill bidding is virtually impossible. If you had a coin that was say a £500 coin and you wanted it, you might bid 1000 (or higher). The thinking person might then go 1050 or 1100 in an attempt to eliminate the person who also wants it badly. You might even go an extra increment to eliminate that thinking person. When the price is only a couple hundred pounds, you will likely have a large number of people bidding at this level with an eye to reselling on ebay or facebook, particularly when prices appear to be rising inexorably across the board. With bidding increments of £10 at this level, you are likely to have a good number of similar commission bids. As I said above - context.

 

The only way to "defend" against shill bidding is live bidding.
I am not using prebids anymore. Basically because I found out I waste too much time checking the coins where I prebid. Is my prebid still leading? ah good, but somebody raised it a little? etc.
Somehow a prebid also "raises the attention" so why should I do that.

I also stopped using proxy bids because of biddr system (not sure if it's the same on other platforms). I lost a few coins where my proxy bid I put before the auction was identical to a live bid and the live bid won the coin. I understand this is normal - well OK, even if it doesn't seem fair. Whatever - if I wanted the coin, I should have raised the bid live....

I was mainly using pre and proxy as I said I might be busy in the auction day but for me this was not applied - when I am interested in an auction I find time.

Best idea is to bid live and set a limit - I want to pay 100 EUR for this coin. No more.
I have not bought from London coins but in my years of collecting, I saw shill bidding more than once.

 

In the past if you've submitted a pre-bid with a highest bid (say, $175) that was above the minimum ($150) but below the estimate ($200), some dealers would charge you your max bid ($175) even if no one else bid on that coin. Not exactly shill bidding, but it might as well be.

I don't know if anyone still does this.

 

A careful reading of auction terms can be enlightening. I have no experience with London Coins but as an example of what one might find generally, the following is quoted from the online terms page of a major US auction house. I have substituted [the company] for the actual name of the firm in the text:

"We reserve the right ... to bid on behalf of [the company], to bid on behalf of the consignor, to permit the auctioneer to bid on his own behalf, and to permit the consignor to bid on his own lots. [The company] may loan or advance money to consignors or prospective bidders, and may have an interest other than commission charges in any lot. [The company] may bid on its own account as an “insider” with information not available to the public."

 

Ouch!

 

Hi

They no longer offer a grading service. I recently checked (I live in UK) as I wanted to get some coins graded and asked them. They have still to update their website though!

Steven

 

Re-reading the post and article on shill bidding, I'm not convinced a bidding pattern where you are repeatedly outbid, confirms shill bids. If the auctioneer picks up a consignor bidding, then that's all well and good and the checks are working, but genuine buyers can repeatedly outbid another, and do so. As noted, there are several ways in which auctions operate and also different ways of bidding for buyers.

If I place a bid prior to the sale, I am informed by email immediately when I have been outbid. If I want the lot, I might bid again and so you would see the same person outbidding you how ever many times this happens. Alternatively I could enter a bid of say 500 leaving me as the high bidder at an opening of say 100. You bid 200 and it should come back with me having outbid you at 210 or whatever. You go 300 and I apparently immediately outbid you at 310. This would happen until my max is surpassed. The delay in registering you have been outbid would be determined by the speed of the automated software, or if the prices have been input manually. Alternatively a reserve might not have been reached, in which case you will also be outbid by the same id if it doesn't show a message saying reserve not reached. Some auction software is a bit clunky. In the case of commission bids entered by an auction house, there is the unknown question of whether they use their 'house name' as the online id. All winning commission bids in the room at DNW for example are knocked down to 'Wood' as opposed to the online bidder number which is verbally communicated. Spink used to use 'Goddard', Glendinings used 'Graham'.

Whatever, repeatedly being outbid by the same id shouldn't necessarily indicate the consignor is shill bidding on his lot because not every genuine buyer enters their max and walks away. I know I have returned to the table half a dozen times on a particular lot on more than one occasion.

I think it is important not to get paranoid. I avoid places where my max commission bid is always the winning price, but these are few in number.

 

I agree that being outbid doesn't confirm shill bids, but what I've been finding is that my max bid or one below my max bid is being hit more often than one would expect statistically.

Yes, I do get outbid, but my suspicion is those are real people and they're paying their maxes too. There was a recent auction in which every coin I won either went for my max or one below my max. On one coin I lost, it went for 6x my max. This max was based on what I'd paid recently for a similar coin (also received at my max). Sure, I understand that obviously someone wanted that coin far more than I, but he placed his max bid at the very end, and someone put a slightly lower bid immediately after him. That seems very suspicious.

I hope to avoid this auction in the future, but the problem is they tend to have really nice coins. Live bidding won't help in this case because I suspect it's done by software. So, if I do find something I can't resist, I'll just put in my max and understand that if I win the coin, that's what I'm paying.

(Disclaimer: these are just my suspicions. I have absolutely no proof to back this up, but I'm certainly not the only one who's noticed this)

 

I wondered which company this was. A quick google search reveals that it comes from everyone's darling, CNG:
https://auctions.cngcoins.com/conditions-of-sale

 

Was that on eBay? Apparently there's a type of scam where someone puts in a high bid to deter other bidders, then withdraws it at the last minute to expose a lower bid they've also entered. At least one of the sniping services now counters this by still submitting bids lower than the current max just in case the max bid is withdrawn in this way. I'm not sure how this would look in the bid history.

 

This was not EBay. It was on an auction site many here use.

FWIW, the following is the "experiment" that I tried: I bid on 16 different coins at 4 auction houses (none were EBay since I have 0% trust in them).

House 1: Did pre-bids for two coins. Bid last minute on two others. Of the two pre-bids, I was outbid on one and received the other at my max. The other two I received at the opening bid price.

House 2: Bid on one coin with a pre-bid and won it at my max.

House 3: Bid on 10 coins with pre-bids and won 5. All five I won were at the max or one below max.

House 4: Bid last second on one coin, and won it at 30% below my max.

There seem to be two possibilities here:
a) I've become awesome at predicting hammer prices.
b) Shill bidding is real.

 

I'm curious why a lot could sell for less than someone's maximum bid. I don't understand that.

 

The only reason it should happen would be if the max bid wasn't a full bid increment above the hammer price.

 

Umm... If I bid $10,000 on a Gallienus and the auction isn't named Heritage or Stacks, then I'd expect to win the coin significantly below my max.

Winning at my max should be statistically less common. It means someone either wanted the coin exactly as much as I, or (in some auctions) one increment less than I.