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 UK’s 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 world’s 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 eBay’s 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, eBay’s 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 eBay’s 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 Christ’s 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). Don’t call it shill bidding. Then I won’t be accused of shill bidding. Yes. I mean — I’ve got people.
“I’ve 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 . . . you’re a multi- millionaire. You buy a hundred grand’s 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 who’s 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.”
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.
DUH
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...
FWIW-
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!
:0)
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.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.