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.
"Obviously, it seems to me, there are bots running against certain types of eBay auctions sending out phishing (fake) "Second Chance Offers". I suspect that is what you are getting."
As I recall, I have gotten three "second chance" offers. As I said, I decline them as a matter of principle. However, one was entirely legitimate. There is a funny story about that one. I bid on a new Gravely brush cutter and I was really lusting after it. I even drove two hundred miles to the dealership to see it before I bid. I tried to buy it outright but the dealer wouldn't end his auction although I was willing and able to take it back home with me. Well to make a long story short, I bid on it three or four times below my maximum and some guy nearby kept bidding up the price to the point I threw in the towel. Well, he got it all right after having some second thoughts. That's when my "second chance" offer came. But the buyer completed the purchase and he had it delivered to his home with his six car garage and his ample tool collection. Two months later the buyer put it back on ebay with only two hours on it and took at $1,800 bath. I had a good horse laugh out of that but the seller was legitimate. I later purchased a perfectly good used one from the same dealer and he's a straight arrow. But to be sure most of the second chance offers are scams.
We used to go to an auction house in a small town in the next county. It was a pleasant way to spend Sat. evening and for little outlay we practically furnished our home with very nice things. Anyway we went one Sat evening and they were CLOSED. Seems the auctioneer wasn't paying the people whose items he was selling. He owed mega bucks to them. He was arrested and his license revoked.
OK, so most of the stuff I bid on is .99 cents to start with.
And often I recognize the names of friends that I'm bidding against. For me, Ebay is a place where I can get stuff for my students and classes that are harder to get elsewhere.
Or finish my china pattern.
Or buy saltwater critters cheaper than at the store.
Or get a sari to make bedroom curtains for $90 bucks less than I paid for the one shipped from India.
Or.....OK, so I didn't need the mini fridge, but it was so CUTE!
Anyhow, the only time I've noticed what could have been 'shill' bidding was when no one bid on something, then when I did, someone else jumped in and pushed up the price.
Fine, I quit at that point.
Otherwise, most of my bidding has been against fellow hobbyists.
I'd also be wary of "Tires at Blowout Prices"
My wife sells tupperware on E-Bay. She has a stock of it that has never been out of packages that have been stored very well for fifteen years. Sometimes it goes for a steal and sometimes she gets a real hefty profit.
Once we bought ten place settings and many other pieces of silver for a fraction of what it would normally go for.
So far we have been lucky. But we are careful.
A low-ball bid on eBay is like a self-ping on FR. It flags it for your watch list.
"I sell items on eBAY...and offer "Second Chance" to next highest bidders on occasion."
...which is against eBay rules.
~~~~~~~~~~~~~
Groups of antique dealers agreeing not to bid against each other, appointing one among themselves to bid for the group and then "equitably" distributing the results of the low bids among themselves.
In follow up mailings that list the lots "sold" at a previous auction.
A. Inflating the hammer price.
B. Listing the item as sold when it was not. Happens a lot !
My wife and I own a gun/antique shop, and we sell and buy on Ebay, and it is a large part of our business. On Ebay we have been selling a lot of old military documents, records, books, and shooting/reloading related items and have been fairly lucky with only a few bad customers and one bad seller out of about 1,600 transactions.
You stated, "When you see that those sellers always have the same bidders that never quite seem to make the winning bids you know there is a shill. Look for these buyers on similar auction items and they aren't interested. You have a shill." This is not necessarily true, as I have had bidders that have repeatedly (more than 20 times) bid on similar items of mine and not won them. Most of this is other dealers trying to "bottomfeed" and get lucky on an item for a great price. It is occassionaly successful and therefore worth their effort.
That said, there are lots of lowlifes out there using shill bidders. However, they are in the minority, and we have had many GREAT experiences and made many good contacts and even a few friends. We have shipped items all over the world and have enjoyed ourselves immensely.
I'm an avid Ebay buyer. Shilling is not a problem for me because of my personal buying philosophy. The big problem with Ebay are sellers outrageous shipping/handling charges. I just will not bid on their items. Bidding early on an item is mainly to be on board and find if other bidders are using the max bid system. Sniping is a lot of fun. Winning in the last few seconds is exciting. I never bid more than I'm prepared to pay immediately.
See my previous post #112 for some background.
Yes, it is insane that people charge, and even crazier that people pay those shipping costs.
We charge actual shipping + $2 S&H if we have to supply a box, or $1 S&H if we use a USPS box such a a Priority Mail box.
We sell in some very competitive niches and this policy nets us more sales.
Outrageous shipping/handling charges are the worst things about Ebay buying. I automatically ignore sellers who use S/H to pad their profit.
Thanks for being an honest seller. Reasonable handling charges are not an issue for me. Shipping charges are pretty well set. A $5 item with $10 s/h is generally a scam.
Aye, you USED to see the handles or names of the other bidders. As of last week, no more. It's all "Bidder 1", "Bidder 2", etc. You can only make an informed guess as to who they are by looking at the limited information the new eBay bidding history provides.
Always evaluate the TOTAL cost when bidding, and beware anyone who doesn't post a shipping price on the item.
Absolutely right! I might as well buy locally if the item is available for the same TOTAL price as on Ebay.
I really work for "peanuts".
Yeah, but at least you get the peanuts.
Very nice job in figuring that out. The only question I have is that if you were willing to pay $745 for the laptop why didn't you just follow thru?
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