Skip to comments.Revealed: how eBay sellers fix auctions
Posted on 01/28/2007 6:38:39 AM PST by COUNTrecount
CUSTOMERS of the internet auction site eBay are being defrauded by unscrupulous dealers who secretly bid up the price of items on sale to boost profits. An investigation by The Sunday Times has indicated that the practice of artificially driving up prices known as shill bidding is widespread across the site.
Last week one of the UKs biggest eBay sellers admitted in a taped conversation with an undercover reporter that he was prepared to use business associates to bid on his goods for him.
Our inquiries found evidence that a number of businesses ranging from overseas property agencies to car dealerships have placed bids on their own items using fake identities.
The cases raise questions about whether eBay, the worlds biggest auction site, is doing enough to protect consumers.
Shill bidding is against eBay rules and is illegal under the 2006 Fraud Act. However, the resulting higher prices on the site boost the value of eBays share of the sales.
Last November eBay changed its rules to conceal bidders identity making it even more difficult for customers to see whether sellers are bidding on their own lots. Since its launch seven years ago, eBays UK website has attracted more than 15m customers. It sells more than 10m items at any given time.
One of the beneficiaries of the boom is Eftis Paraskevaides, a former gynaecologist, from Cambridgeshire. He has become a Titanium PowerSeller one of eBays handful of top earners selling more than £1.4m worth of antiquities a year on the site.
In a conversation with an undercover reporter last week, Paraskevaides claimed shill bidding was commonplace on eBay.
When the reporter asked whether he arranged for associates to bid on his own items, he replied: Well, if I put something really expensive (up for sale) and I was concerned that it was going for nothing, I would phone a friend of mine, even a client of mine who buys from me, and say: For Christs sake, I sell you 100 quids worth of items a week . . . just put two grand on it, will you? The reporter was posing as a seller of valuable antiquities. He inquired whether Paraskevaides could sell them on eBay and guarantee a minimum price.
He replied: Leave it to me (laughs). Dont call it shill bidding. Then I wont be accused of shill bidding. Yes. I mean Ive got people.
Ive got some of my big clients who buy big items off me, I look after them. So I can get on the phone to America and say: Mr XXXX . . . youre a multi- millionaire. You buy a hundred grands worth off me a year. Do me a favour would you. Just put yeah. Exactly.
He claimed eBay would never follow up a complaint against him for shill bidding because he generated about £15,000 a month in commission for the company. Are they going to ban somebody whos making them the best part of 15 grand a month? No, he said.
After being told that he had been talking to an undercover reporter, Paraskevaides denied that he had ever shill bidded on eBay and claimed he was talking about clients who sometimes bid on expensive items if they wished to protect the price.
However The Sunday Times discovered businesses that have been bidding on their own items. One leading dealer from London admitted last week that that he had shill bidded in the past.
A spokesman for eBay said he expected that the company would now launch an investigation into Paraskevaides. Anyone caught shill bidding risks a permanent ban.
The spokesman added: The change to the way bidder IDs are shown has already resulted in a safer environment for users.
And "Froogle" the new items. Most of the time you can find them cheaper.
When I know a user is shill bidding, I just don't bid on his auctions.
This is a problem that can police itself easily.
Never put in a maximum bid you aren't willing to pay for that item.
If you don't like how the transaction goes, tell that in the feedback.
I don't trust Ebay, and won't use it; it's a carney's dream.
>>Shill bidding has been going on since ebay got started.
Actually, since auctions got started (live and virtual).
I've shopped on Ebay for years and am a very savy shopper. I know the value of things and what the maximum is that I'm willing to pay for an item.
I've gotten some terrific buys on Ebay and have found items that are either no longer available or can't find locally. I've decorated most of my home (knicknacks, books, hard to find CD's) with stuff that I've purchased from them.
Have I gotten ripped off there? Yes, a couple of times and fortunately it wasn't for more a than a few dollars.
Buyers simply have to be careful and not go beyond what they are willing and able to pay.
I thought the seller could place a minimum bid or a reserve on an item.
I've had problems twice on eBay since I've been a member (7 years).
Between the eBay reporting system, PayPal, Square Trade and the Post Master General, I've had no problems resolving them.
Things must be pretty quiet in the UK if they consider this a scandal.
I'm sorry, but you can't stop shill bidding. Any seller with any brains at all can do it without even getting noticed. Plus it is very hard to prove. This is yet another thing that makes for a good story, but would be a waste of law enforcement effort to actually investigate.
Just a casual user of e-Bay - but we have had problems - misrepresented articles, seller backing out after a successful low bid, etc. - about 40% of the time. Have had a number of friends who rave about their 'buys' and know one couple that made a pretty respectable 'living' (@100K/year) selling on eBay stuff they picked up at yard sales.
I know that on camera equipment, particularly stuff like the Canon professional quality gear, I never even check eBay. B&H sells it new for less than what some morons are willing to pay for used equipment.
Caveat emptor applies more to stores. eBay has a large selling population of garage sale type environment.
The blame should not be on Ebay. The blame is on the abusers.
The trick is knowing exactly what you want, and exactly what you're willing to pay, and always be willing to walk away.
I would say the experience is the equivalent of going to market kiosks.
And who doesn't love a flea market?
Exactly. Just watch some live auctions and you'll know right away. Personally, I think it's disgusting. The bigger houses with big-ticket items aren't as blatant about it, but go down one level and it is a carney sideshow.
The other big scam on eBay are the PHONY Motorola Bluetooths being sold there. At least 90% of them are lower quality counterfeits. If you see a Bluetooth being sold for $20 to $30 I guarantee it is a fake. Actually MOST of the "Motorola" bluetooths out on the marketplace are fake.
"Last November eBay changed its rules to conceal bidders identity"
Not any more.
I just checked three auctions with bids on them and the bidders I.D. shows.
I have bought on Ebay. I learned early to never bid. I prefer to snipe. It keeps the price down and competitors don't have enough time to respond.
Phony Motorola Bluetooth what? Phones? Headsets?
A carney sideshow is a apt description of some of these jokers. We go to a lot of estate auctions locally, and there are one or two auctioneers that we just don't bother with - because they obviously use these shill bidders.
I've never had any of these problems on eBay though. I did tell a fellow off recently when he was 'bragging' about having a friend that did this for him on his eBay items.
Headsets. Most of the "Motorola" bluetooth headsets on eBay are fake. Buy them at your own risk.
Shill bidding is as old as auctions themselves. And I don't mean online auctions, I mean any form of auctions. It's difficult to spot and almost impossible to stop. eBay set up measures to control the crudest forms -- people creating sock-puppet accounts to bid up their own wares -- but they haven't managed to stop two actual people from colluding outside of eBay, and I doubt they ever can.
There's a mental process in auctions that's similar to gambling -- it's easy to get caught up in the emotion of trying to "win" an auction that you lose sight of the economics.
My mom never set foot into a casino until she was in her 40s. She taught me this, and I've stuck with it -- Set a budget and stick to it. Take your cash and leave the ATM card back at the hotel or up in the room.
You're there to have fun -- it really is fun -- and if you do well, you can have fun for longer. If you happen to make money, that's a bonus, but if that's your goal, they've sucked you in. There is no such thing as a streak, and there is no such thing as being "due." Those are the superstitions the casinos play on.
Online auctions are like that. They play on folks who get the bit in their teeth and hate to "lose," even when folding a weak hand is the rational choice.
Computer parts and consumer electronics are especially vulnerable to this. Most of the time, if I search the price-comparison sites or even go to Amazon, I can find what I want for less than the leading bid on eBay. You should never bid on anything without first knowing what it's worth and establishing what you're willing to pay. And don't get hooked on "winning."
Don't get me wrong; I'm not slamming eBay. For old, rare items, they're the best source on Earth. If I need a Wedgewood demitasse to complete my set or a SCSI-Ethernet adapter so I can put my ancient Mac Plus on the Internet, I could find in a day what I might not find locally in ten years. But like any auction,yard sale or bazaar, if you walk in without a clue, a plan and a budget, you're meat.
I learned this early on, also. I'm always amazed at people that put their bid in with 3 days left. What good does that do? It just drives up the price.
I prefer to snipe too. That way you aren't overbidding on an item. Just wait for the last minute and put in the amount you are willing to pay.
Sometimes tho, it doesn't always work out. But hey!
That's the chance you take.
Only if the item bidding is under $200
I sell items on eBAY...and offer "Second Chance" to next highest bidders on occasion. Uusally when I have more than one of same item...
Saves me the hassle of listing again...
If I can't buy it now, I almost never buy it...
One idea being bandied about - in a "real" auction, there is no time limit, within reason. If bidding is active, then an auctioneer would be silly to stop bidding at a predetermined time. So, it has been suggested that as long as a flurry of bids is coming in - then the auction should be extended by a few minutes, and hour, whatever. "Sniping" takes advantage of the fact that an eBay auction ends at a specific hour, minute and second. I have won a few auctions within 1 or 2 seconds of the ending time. It just has to really crank the poor guy who was #2, but Oh well.
Actually, there are some small sellers who are quite ok; they sell that way because it's the most cost effective. It's the power sellers you have to watch out for.
And if you are trying to get something for nothing, you can be sure you're going to get nothing much for something.
"Only if the item bidding is under $200"
Which post are you referring too?
The 'I.D' thing or the 'sniping' one?
If it's the I.D., then that I didn't know.
Probably because I rarely bid on anything over $200.00
At least, not lately!
You know, sniping auctions used to be the only way I would bid. I was very good at putting a bid in the last minute, sometimes last half minute. Philosophy is bidding early just runs the price up.
I am both a buyer and seller on Ebay.
I have never had any trouble getting ripped off. My biggest problems have been with idiot, non-professional sellers who don't know you can't pack 8 glass plates in a box with 2 pieces of newspaper for "padding" and ship them and expect them to arrive in one piece.
Other than that, snipe away.....
One thing I've noticed is that you can no longer be sure who you are really dealing with or where the goods will be coming from. I won an item advertised as in London England from a seller with an English name, then found I only received a form email in pidgin Enrish from an address in China. All my attempts to contact the seller were unanswered. I finally opened a dispute with eBay after a month, and then a package showed up from China with no explanation. Clearly there was no part of the seller's operation in England at any time.
Shill bidding occurs, no doubt. I think a snow blower that sold for $13,000 last week was bid up by a shill. It was a strange, strange auction.
But what is described in the column doesn't look like shill bidding, it's real people really buying the stuff. Granted, they're buying it as a favor, but buying it none the less.
I used to have a program that would provide me with the capability of sniping bids, but my equipment wasn't fast enough!
I always have a set price I want to bid at, and bid just once (usually sniping in the last ten seconds), so 'shilling' is never really a problem I worry about. I win the auction, or I don't. I never look back in regret.
But I echo the sentiment that the biggest problem with ebay sellers is the poor packing. One time I got a salt-and-pepper set (in the shape of dachshunds) for my sister, for a little birthday gift. The seller just put these two very breakable figurines together in a box, without ANY padding or stuffing whatsoever. They arrived in pieces, naturally.
I've had over 1200 transactions on ebay and very few problems. Most of the people I "meet" there are very nice. Kinda like FR.
The winning bidder still had to bid on the item. If he didn't think it was worth that price, he shouln't have placed the bid. There have been a number of times that I have bought merchandise on EBay by looking for auctions for the items I wanted that were going to close in a few hours or minutes. If the existing bids were substantially below what I thought their value was, I would place bids just a few minutes before the auction closing time. In most cases I would win and still pay a good price but not have to wait days for auctions to close. If you don't bid what you think an item is worth, you are in danger of having someone else come in at the last minute and outbid you.
One coin can be sent "First Class" for 39 cents or perhaps 63 cents. Yet a seller will want $7.95 etc, for shipping and handling for one coin.
That is a $7.00 profit on the sale for sure.
Off topic, but this my "GRIPE" at eBay.