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.”
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.
I briefly dealt with a jewlery selling.
Magically it appeared he had the same customers who did the shill bidding for him.
It was somewhat obvious with the same "customers" all the time.
It seems if they just use a reserve bid, there is no need for a shill.
I've seen high S&H. I understand that gripe.
But, the S&H should be listed on the listing. If it is not, private message before bidding.
Don't forget, S&H is usually where listers compensate themselves for eBay listing fees and end of auction fees.
(But, you are right, I've seen S&H for DVDs and such as high as $25)
or they were shipped broken and they shipper now claims the insurance.
On the other hand, as a seller, I do add a small amount to the actual shipping cost. I take great care (and use lots of tape and packing materials) to be sure my stuff is going to get there in one piece. My time and materials are not free.
That said, I don't think it's that big a problem. Maybe you need to watch out with those megadealers, but most of the time I just buy old books for $5 or $10 and probably 60% of the time I'm the only bidder. I've been there since 1999 and never once have I thought that someone was crookedly running up the price on me.
Oh, I've seen it rampant on eBay, in certain categories. I had the misfortune of being a seller for a while in a hobby that "took off" when collectibles were the big thing.
I wasn't in to that, had other uses for the "products" - but it was sickening to watch. I didn't pursue it after a few weeks, although I had been counting on the income from selling off what I had collected. Still have all of it, many years later and no way to enjoy it as I once did.
A true auction site out there that does that is bidz.com. Unfortunately they don't sell everything, mostly jewelry. Most items have very few bids until it is almost over but if a bid is made in the last 15 seconds the auction is extended for 15 seconds, over and over til there are no more bids.
That is a true auction to me.
Yes, and when I reported it to EBay and withdrew my bid EBay replied that there was no proof that had happened even tho I offered a lot of proof.
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