Five Ways To Detect Shill Bidders On eBay So That You Don't Pay Absurd Prices
Posted: Monday, July 25, 2005
by Sydney Johnston
The Auction Queen
Shill Bidding: How Scumbag Bidders Rob Honest Sellers Like You
Shill bidding deal is a 21st century version of a confidence game. The purpose of shill bidding is to buy merchandise at an artificially low price which can then be resold for a healthy profit. It involves either two different buyers or one buyer who possesses two different eBay IDs.
Shill bidding is often easy to detect and therefore is usually more successful with an inexperienced seller who doesn't know what to look for. We can't know for certain, but most likely shill bidders look for sellers with low feedback because they know a more experienced seller might realize what is going on.
Shill bidding is only worthwhile with an expensive item. If you are selling many low priced, high-volume items, shill bidding will not be a concern of yours.
Let's use an extreme example so that sellers can easily identify the shill building pattern and be aware of what it looks like. Forewarned is forearmed, and all that.
Let's pretend that a seller has an antique doll for sale. She has seen a few other dolls similar to hers and she knows she can expect approximately $300 for this doll. Our unscrupulous bidders also know that $300 is a reasonable and legitimate price and they want to get it for much less. The seller decides to open the bidding at only $9.95 to encourage collectors to flock to her doll auction.
Basically the way the scam works is like this:
Buyer A will open the bidding at $9.95.
His confederate, Buyer B, will offer an inflated bid, above and beyond the true value of the doll. Let's say he builds $350.
The purpose of such a high bid is to discourage all legitimate prospective buyers from even getting in the game. Obviously, genuine collectors and buyers will not be interested in paying in excess of $300 if that is what the doll is really worth.
There may or may not be a few intervening builders between the placement of the opening bid and the absurd one. If there are any bids, they will be nearer the opening bid of $9.95 and therefore will not raise the price very much. In fact, our dishonest pair might be happy if someone else bids, because more bids make the auction look more legitimate.
The auction will hang there in eBay limbo until only hours before the closing deadline. Shortly before the conclusion of the auction, Bidder B will retract his $350 bid. Since he and Bidder A are in communication with each other, Bidder A will know the exact moment that the high bid is canceled. He will then raise his bid just above the highest one, if any, so that he is now the highest bidder.
Our dishonest pair hopes that no other sellers notice this last minute retraction and place bids. If an honest bid is placed, they can afford to top them because they still have lots of financial room to play with. After all, even if the bidding rises to $150, they can still double their money on a $300 doll.
The result: the dishonest bidders won the doll at a fraction of its value. The shell-shocked seller is left in a daze, wondering what happened to her glittering auction profits.
In a variation on this practice, Bidder B may allow the auction to expire with his bid of $350. When the seller contacts him for payment, he will ignore her requests until she gives up and realizes she is never going to get her money.
eBay has a "Second Chance" program. In the event that a buyer doesn't live up to his obligations, the seller can offer the item to the second highest bid - which belongs to Bidder A and is artificially low.
If an honest seller sees this kind of pattern in one of her auctions, she can recognize the possibility of some dishonesty going on and take steps to verify the extraordinarily large bid. Sometimes such a high bid is totally legitimate because it is from a collector who is determined to own the item for sale.
Fortunately, shill bidding deal is relatively easy to detect and it isn't common anymore. At one time it was much easier to pull off this kind of fraud than it is now. Any seller who has a question, however, should feel totally justified in contacting the high bidder and asking some tough questions. Without satisfactory answers, it is certainly wise and prudent to contact the Bay and discuss the situation. In this way, no seller will never be ripped off by dishonest shill bidders.
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Hi, Technically speaking, this isn't shill bidding. eBay call it "bid shielding" - obviously because buyer B is shielding buyer A's low bid. If there are no intervening bidders, Buyer B is very likely to cancel their bid before the end of the auction, leaving the seller obligated to sell to A at the artificially low price. FWIW, shill bidding is when the seller bids on their own auction, to push the price up. HTH.this does not happen because ebay does not work like this. if buyer A places $9.95, buyer's B bid cannot be $350 (That's his maximum bid) the automatic bid will go around $0.50 higher than bidder's Aso buyer's B bid will go to $10.50$350 is B's maximum bid which is automatically raised if someone else bids higher and higher than $10.50
eBay introduces absolute anonymity for (shill) bidders Revised 13 April 2008 A comment principally on the whole-of-auction absolute anonymity of bidders recently introduced to Australia (and more recently to the U.K.) by eBay, including responses to the various, sometimes nonsensical, statements being offered by eBay in support of this decision—with apologies to all the shill bidders out there. For those of you with a very short attention span I will summarise my comments on my principal concern, the issue of “shill” bidding: It is said that “Justice must not only be done; it must also be seen to be done.” It follows therefore that “eBay must not only be free of shill bidders; users must also be able to see for themselves that it is free from shill bidders.” Putting aside for the moment eBay’s existing “shill-bidders’ hide” facility, “User ID kept private,” if eBay thinks that making all bidding aliases absolutely anonymous (ie, “Bidder n”) will not make shill bidding easier or that experienced eBay users will now trust eBay, of its own volition, to rid eBay of the shill bidding that will undoubtedly now run rampant, then eBay management is living on a different planet to that on which I reside, and I have no doubt that such anonymity will ultimately have a detrimental effect on eBay’s business. Actually, they are on a different planet: they have already stated elsewhere that “… we do not immediately remove a member from our site if shill bidding is detected” because eBay believes “… that people are basically good and sometimes people need an opportunity to be educated instead of removed” (ie, eBay needs to protect its income stream). The problem with this policy is that it appears that the only shill bidding eBay is ever going to recognise is that which is so blatant and habitual that such sellers do not deserve and should not get further chances! And, what then about the extra consideration these shill-bidding cheats have taken from unsuspecting buyers who have bought in good faith (and trusted eBay)? Clearly, eBay does not have any automated processes for the detection of shill bidding (we all can direct eBay to obvious instances of such activity); eBay apparently relies solely on the reporting of such suspected activity by users—yet eBay has just removed the user’s capacity to more easily notice such activity ... Dah! Further, I would not be surprised if eBay could not be held to be complicit in any shill bidding that can be proven as eBay, for what would appear to me to be a petty if not a disingenuous reason has chosen to lessened the capacity (to practically zero) for buyers themselves to be on the alert for and thereby attempt to protect themselves from such despicable activity. If the various governmental “Offices of Fair Trading” had any backbone they should have the power to make eBay undo this absolute anonymity nonsense as the simple fact is even a half-wit knows that the change from a user-specific bidder alias to a totally anonymous bidder alias serves no purpose other than as a blatant hide for shill bidding—in which eBay appears happy to be complicit. For those of you with a longer attention span, the full detail of this and some other eBay matters at: auctionbytes . comWell done....it is beyond belief what eBay policy has done...it has opened the door to dishonest practices. They support it. I know of individuals that are consigning their items to friends, then they will bid their own items up at their consigned friends site. What a shame...In some cases the consigner has had to purchase his item back, but most cases the honest bidder continues to bid...and ended up paying for his / her desire to own it. I can't wait for another site to arrive that will compete with eBay...I would love to see a off site eBay where we could post dishonest shill bidders...so all can review...and perhaps law enforcement may take an interest. eBay has no interest in catching these individuals. You are right...they will 'smack their littler fingers' and then say bad boy...and then will continune. Oh I didn't know that was illegal. My suggestion, before anyone sell on ebay, they should be required to take the shill bidding exam, sign it so they will know. the first time they are caught...law enforcement is called.I cant begin to count how many times i have been a victim of this practice....but guess what..... that's the name of the game.... if YOU want somthing bad enough.... you'll Pay for it..... the world doesnt revolve around everyone getting somthing for nuthing..... A wise auctioneer once said.... " If You're Not Sure, DONT BID! " no body twisted your mouse finger and forced you to out bid a high fixed bid..... YOU wanted it... YOU went for it..... YOU bought it..... IT was WORTH what you were willing to PAY for it.....
I've made really bad bids... and took the loss.... if there's a way to make money...people are going to do it..... EBAY gets a cut of every sale no matter what... THEY ALSO are in business to make money..... so why would they prosecute their best money makers........ it's up to you to learn how to be savy about what you commit to..... i dont see any gambling casinos closing up cause some guy didnt win big......Most ebay sellers are surprised to find that what ebay calls "shill bidding" -- that is sellers bidding on their own items -- is allowed in most real world auctions. It is not a crime as ebay claims. Check the terms on real auctions and you will almost always find reference to "consigner reserves the right to participate" or "auctioneer may place bids on behalf of the consignor." Ebay even allowed it at one time but realized that people used it to avoid paying reserve fees.No, you're wrong! 'Shill' bidding is now an illegal method cuz 'Why would you bid consistenly on your item's auction itself?' if there's already a valid reserve price method that sellers should follow instead! -- It's unfair for some buyers because they usually expects their wanted item to be in a fair suitable amount under their maximum bid but they would finished losing it cuz their absurd sellers exceeded & pushed the price the way they want! Every auction sites have requiring fees cuz, OF COURSE.. they 'help' to sell your item(s) conveniently...The "Free Auction" site Listia puts Ebay to shame. That site has AUTOMATIC DETECTION of shill bidding and they've only been around for a couple years (AND THEY DON'T CHARGE FEES!). So if a newbie site, which makes no money from user fees or anything can do auto detection of shill bidding, why can't Ebay? I believe the answer is...it doesn't want to...why? coz they get a cut (Final Value Fee) of the shill bidding profits.
If you don't believe how easy it is for a little start-up auction site to auto-detect shill bidding...just create an account with Listia, list an item and try to shill bid...try even using different computers and different locations...their software can detect it very well. So I'm sure, if they wanted to, Ebay can do this. But THEY DON'T WANT TO.
Let me share my "shill bidding" nightmare. I sell on consignment for friends and family as they don't have the time in their busy lives to do so. I left the work force to do ebay full time and even took the plunge and opened a small storefront. All was going wonderful and I became a "Powerseller". A new customer ( who was the friend of someone in my family) came in with some scuba diving equipment which I listed without a reserve. He kept in touch and asked was his "reserve price" met. He never mentioned a reserve and I didn't think it needed a reserve I assumed it would sell for about 300.00 as the others I watched did. This man did not leave this equipment with me in the store he took it home with him for safe keeping. An hour before the auction ended he called. The item had only hit 112.00 and he was furious! I tried the "end this listing" option but it was too late. As many of you may know we sellers live in constant fear with the new policy changes. We fear our stars will get out of alignment or hit with negatives with no warning whatsoever. If the man refused to bring me this equipment to ship it would have been a nightmare. I knew what I was thinking was wrong but I was in a panic. I called my son to bid on this item and win it. And he did. I ate all the fees, called the man and told him it did not hit the reserve and if he wanted to sell it for 115.00 I would do that for him. He refused and never paid my fees to list and I ate that too. This was the one and only time I did this. I am not a criminal and have been on ebay since the very beginning. I know what is right and what is wrong. I got a warning (slap on the hand as you say) and took the shill bidding tutorial. For 2 weeks I could only list "Buy it now" which was no problem I deserved that. I had learned my lesson and would never do that again. I always check the Vero list if I think merchandise might be questionable to sell ( fear and paranoia now loom in the mind of ebay sellers) and this other new item's company was not listed. I checked ebay and at that time there were 284 of the same exact item all with bids so I felt assured it was okay and I listed it. Wrong! I got suspended. I got hit with copyright infringment and a 7 day suspension (it's been 10 days now and nothing) I'm assured they just wanted one little thing to push me over the edge and they did. All my auctions were gone. I'm getting battered with phone calls and emails.... "Where's my this? Where did you go?" I have customers coming in and taking merchandise back with them as now and I quote one customer "This is all too fishy for me, I don't want to be involved anymore". I have a negative paypal balance of -335.00 because everyone and thier mothers sees I am not a registered user and even though I'm sure (delivery confirmation) they already got there merchandise opened disputes Item not recieved. When your suspended everyone assumes your a scam artist and thief which I am not. Everything that was due to be shipped was. As the disputes come in I escalate them to a claim and add the delivery confirmation number for them and Paypal to see. I'm standing in the middle of this huge avalanche with no where to run. Ebay took all there fees at once and now my bank account is also overdrawn. To get everything straightened if ever I will have to borrow money which I vowed I would never do. Some of you might say "Boo hoo you deserve all you get" and sure. I took my "shill" punishment but because they say we get the benefit of the doubt they just find something else to hit you with to get you gone. I've read on other blogs people say powersellers never get hit like the little people? Well here's one powerseller who got hit. Don't shill bid even if you think it's for a good reason (I should've chanced it with the winner and that rude man) and even if you check the Vero list and the company who made the merchandise isn't on it don't assume you can sell it even if there's a million of them listed!! Stick with the flea market and garage sale items.....oh wait....nix that. The new ebay will no longer resemble a flea market or garage sale! So now what???ebay of course collected their fees its a scam all right not by the sellers or bidders but the money vacuum ebay they cancel listing with no proof i might add they just decide to find violation end listing and keep the fees is this not the United States Of America innocent untill proven guilty not accused and condemed by ebay. nobody sees it they abscond millions of dollars keep the listing fees. 99.9% of listings have violations in fact i see no disclaimers on any listings. how they randomly attack is beyond me one thing i notice is is always a member with perfect feedback. i believe this is because they know the money is there. seems like around 4000 rating they hit with full force.Don't ever think you can count on ebay to intervene and do the right thing. They don't care about you, or your feedback, or your business. They will not hesitate to throw you under the bus for no good reason. As for cancelling your auctions and not reimbursing you for the listing fees again demonstrates what a bunch of ___holes they are, not to mention all the people wanting to buy something that had their time wasted too.
Obviously shill bidding is when sellers bid up buyers, not buyers placing fake bids to 'swindle' a seller. On eBay, a buyers cannot retract a bid without the sellers consent.
Sellers are the ones who have their friends bid up buyers automated bids. They are easy to catch because these sellers always 'tend' to relist items AND gives the previous buyer, who did not buy, a positive! Just review the feedback and have a look at the items sold. You'll see the activity. These sellers are creating false accounts where they pretend to be active buyers, who don't actually buy anything, ever. The more obvious shill is the 'zero' bid that very quickly raises the bids of an active auction.
I got stung selling a motorcycle by some scumbag who did this - I thought at the time, that bid's way over but greed won out and I let it stand. He cancelled the bid at the end and although I didn't lose money as such as I just pulled the auction I had to relist and annoy genuine, honest bidders. Turns out he was selling the same make of bike and was afraid of the competition. Ebay did nothing. Be warned.