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How eBay Sellers Fix Auctions 556

Boj writes "The Times online is carrying stories on fraud carried out on eBay using shill bidding. Citing eBay's changes to security as aiding the shill bidders and this fraud: "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.""
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How eBay Sellers Fix Auctions

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  • by lecithin ( 745575 ) on Monday January 29, 2007 @10:45AM (#17799390)
    Ebay knows about this type of fraud and other types and they do very little to combat.

    Go to ebay and do a search on 'wholesale list'. You will find people attepting to deceive the buyers, I'll even say that much of this is fraud.

    I would bet that among the 'power sellers' (and others) there were organized 'teams' of people that artifically jack up the prices for profit.

    Now, if ebay KNEW about these practices and did nothing to stop them, could they be found liable?

    I have been a victim of Ebay fraud, complained and heard nothing back. I sucks, but I now expect that from both ebay and paypal.

    "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."

    What this also does is it keeps people that wish to help fix the problem from doing so. IE, I see an obvious fraud attempt on EBAY and try to contact the people that are about to be screwed. I can't do it.
    • Only pay what you can afford and what you think something is worth. If a seller out bids you on their own product. Fine, let them keep it.

      Personally, I avoid eBay like a plague. it's got sucker written all over it.

      • by miskatonic alumnus ( 668722 ) on Monday January 29, 2007 @12:07PM (#17800476)
        Personally, I avoid eBay like a plague. it's got sucker written all over it.

        Well, that may be. But they stay in business for a reason. If I have something to sell, I can reach a larger market than I can locally. And when I'm looking for some uber rare item that it would take years and thousands of dollars in gasoline to find by scouring every used record store, book store, person's home, etc., ebay comes in very handy.

        I've only been burned a couple of times (out of several hundred transactions) and then only for low value items.

        My own personal strategies for a succesful transaction include:

        1) Never bid on camcorders, computers, automobiles, or any other high dollar item.

        2) Always do an extensive check of the seller's feedback.

        3) Don't bid early or get involved in bidding wars. Snipe instead.
        • by JudgeFurious ( 455868 ) on Monday January 29, 2007 @12:42PM (#17801006)
          ebay is a great place to find automobiles but admittedly you have to be careful and you have to be willing to get up off of your butt and go look at the car. I've bought two cars off of ebay and in both cases it took me a long time to find the vehicle I was looking for. When I did I was entirely comfortable paying that sellers "Buy it Now" price and in both cases I went to look at the car in person.

            For basic transportation it's not necessarily the way to go. Chances are most people have at least as good a selection within driving distance of them at various dealerships in their area. If you want something a little out of the ordinary though it's a good place to find it.
        • Re: (Score:3, Interesting)

          by The-Bus ( 138060 )
          I still fail to understand the argument about overpaying for stuff on eBay, at least on a personal level. If you have perfect information on the item (which is impossible but easier for some items than others) then you can never get ripped off. Let's say I'm a complete assbag and thus want the new Rod Stewart CD. I could get it for about $9 shipped from one of the Amazon marketplace sellers. I could also go to my local Jerk Store NBooks & Coffee and get it from the douchelord CD section for $15 with tax
      • More to the point (Score:3, Interesting)

        by goldcd ( 587052 )
        not only has the seller lost a sale as he got greedy, he's then got to pay ebay their cut of the sale (or embark upon reporting his alias for non-payment and enter the general hell that is ebay support)
    • As long as Ebay makes money on higher prices they have no incentive to stop this type of fraud.

      Yes, everyone run around and complain as much as you want, this isn't going to change.

      Whatever, I never trusted auction sites anyway.
    • by peragrin ( 659227 ) on Monday January 29, 2007 @10:55AM (#17799550)
      As another poster said ebay makes money off ALL auctions. Fraudalent auctions earn ebay the same amount of money as real auctions.

      Just remember Ebay is a flea market. The kind most people wouldn't enter if it existed as a real building. Treat going there as such and you won't get burned.

    • >Now, if ebay KNEW about these practices and did nothing to stop them, could they be found liable?

      What CAN they do to stop them though? (Without completely destroying their business)
      How is it possible for Ebay to tell the difference between an account that just doesn't bid all that much because they're trying to be cheap vs. an account that is shill bidding?
  • Reserve Not Yet Met (Score:5, Interesting)

    by eldavojohn ( 898314 ) * <eldavojohn AT gmail DOT com> on Monday January 29, 2007 @10:45AM (#17799394) Journal
    Am I the only one failing to see the damage done here?

    Ok, so I've used eBay and I know there's a "Reserve Price" option for an auction. You set it when you start the auction and if the bids never crest that benchmark, you are under no obligation to provide product/service for amount tendered.

    Now, that said, I will concede that a "Reserve Not Yet Met" sign on an auction will cause me to over look an auction. I feel less like I'm getting a deal if that phrase is staring me down. I will also mention that the more bids on an auction the more desirable it is to me (childish, I know, but hey I'm human).

    Now, on the other hand, if I were an seller, I could think of a thousand ways to simulate bids. Configure a friend's computer on the other side of the country to forward my internet traffic, for one. And then the cat and mouse game between eBay and I would begin. And what would happen? eBay would have to spend a lot of time investigating this stuff. A lot of time and resources. Only to do what? Send me a nastygram asking me to use Reserve Prices next time? Place a black star next to my name to let bidders know I've been known to use shill bids? Social stigmas of some other sort?

    In the end, who cares? eBay should keep it in their TOS & simply let people know that professional seller often practice this. You're not going to find the same deals on eBay that you'd find at some middle of nowhere country farm house liquidation auction where you have to show up in person and stomach 8 hours of farm tools and the worst BBQ lunch sandwiches you've ever tasted.
    • Re: (Score:3, Insightful)

      by rblancarte ( 213492 )
      The damage is that this is fraud. And it does inflate prices on things you are trying to purchase. For example, if I want a something on eBay, and I put a bid of $100 on that. But the going rate is only $50, so my bid sits at $50. Then right before the auction ends, a shill bidder comes in, and jacks the price up to $95. I am now paying $95 for a product I should have rightly only paid $50 for!

      The biggest thing against reserve prices is that it is an option you have to pay for (as a seller). The whole
      • by PFI_Optix ( 936301 ) on Monday January 29, 2007 @11:18AM (#17799836) Journal
        How to sell your product for the price you want without paying for reserve pricing or shill bidding:

        Set your starting price at what you want to make. Instead of trying to lure in buyers with $1 auctions and a $100 reserve or shilling a $1 auction up to over $100, try just starting the auction at $100. Gee, there's a thought.
        • by corbettw ( 214229 ) <corbettw&yahoo,com> on Monday January 29, 2007 @11:40AM (#17800112) Journal
          You'd be surprised how poorly that tends to work. First off, when you set a higher starting price, you pay higher listing fees. Second, when the price is set low initially, it can help trigger a bidding frenzy. Especially when someone decides they're willing to pay $100 for your item, so they put that in as their max bid, but their initial bid only shows up as $1. So when someone else enters a bid, it quickly starts going up and up and up. Next thing you, people are bidding hundreds of dollars because they're now emotionally invested in getting *that* item.

          The psychology of eBay is pretty fascinating. I used to buy and sell on there quite a bit, and have a friend who started his own sell-it-on-eBay company, using just the tactics I described above. Sometimes you'll end up selling for less than you wanted, but more often than not you make a killing.
        • by CallistoLion ( 651747 ) on Monday January 29, 2007 @11:41AM (#17800120)
          eBay's listing fees mean you pay more to list an item with a higher starting price. Simply put, it costs the seller more to have $100 auctions than $1 auctions. Same thing with reserve auctions, the seller pays for the privilege.

          In a very real sense, eBay is encouraging shill bidders with their listing fees. They'd be gone overnight if listing fees were the same irrespective of the auction start value. After all, eBay is still getting their ending value fees.
      • i am not defending the shill bidding practice at all.

        if you bid 100$ on something that means you are willing to pay up to 100$ for it. if the auction ends at less than 100$ you get it for that amount, exactly as the system is supposed to work. If you dont want to pay 100$ for the item, dont bid 100$.

        Simple, easy, and totally within the spirit of an auction.
        • Re: (Score:3, Insightful)

          by rblancarte ( 213492 )
          Shill bidding is most certainly NOT in the spirit of the Auction. I am supposed to be competing against people who want the item I want. A shill bidder is there to drive up the price, with zero interest in the product.

          In a real auction, I only bid when I am not winning. Once interest beyond mine drops, I get that price, even if it is $100 less than my max price.

          But with eBay's proxy bidding, I put in my max price. Again for the above $100. Legitimate interest dropped off at $50. So my rightful price i
        • by honkycat ( 249849 ) on Monday January 29, 2007 @11:51AM (#17800276) Homepage Journal
          If you bid $100 in an ebay auction, that means you'll pay up to $100 for it, but less if there is no competition for the item. Manufacturing false competition to drive up prices is fraud and against the spirit of the auction, even if no one is forced to pay more than they're willing to pay.

          If the rules were simpler and you simply entered a fixed bid, then what you say would apply. However, the rules say you'll only pay a small amount more than the next highest bid. Pumping that up via fake bidding breaks the system.
        • Re: (Score:3, Insightful)

          by Ctrl-Z ( 28806 )
          The reason a lot of people bid their maximum is to avoid being beat by snipers in the last seconds of bidding. Shill bidding is fraud. Just because I would be willing to pay $100 for something doesn't give the seller the right to take my $100 if no one else thinks it is worth that much.
      • duh? (Score:3, Insightful)

        by RMH101 ( 636144 )
        if you don't want to pay more than $50 for an item, DON'T BID MORE THAN $50 FOR IT. for christ's sake, this isn't rocket science.
        • Re:duh? (Score:5, Insightful)

          by honkycat ( 249849 ) on Monday January 29, 2007 @11:56AM (#17800354) Homepage Journal
          The point is not that people pay more than they're willing to pay, it's that they pay more than the legitimate auction price. Any way you look at it, it's fraud. The bidder is offering to pay up to $X to defeat honest competition, but the rules say that he pays less if there are no competing bids. If the seller just pushes that up to his limit, he's breaking the rules under which that offer was made. It breaks the system.

          That's not to say it would be wrong to implement a straight bidding system where an offer of $100 is an offer of $100. But that's not the system that's being used, so shilling is fraud and tantamount to theft of the difference between the price due to legitimate bid competition and the shilled-up selling price.
      • by djh101010 ( 656795 ) * on Monday January 29, 2007 @11:27AM (#17799934) Homepage Journal

        The damage is that this is fraud. And it does inflate prices on things you are trying to purchase. For example, if I want a something on eBay, and I put a bid of $100 on that. But the going rate is only $50, so my bid sits at $50. Then right before the auction ends, a shill bidder comes in, and jacks the price up to $95. I am now paying $95 for a product I should have rightly only paid $50 for!

        Then, why in the world would you (a) bid $100 for it, and then (b) complain when you didn't get outbid?!?!?!

        In the end, I care. I occasionally buy stuff on eBay, and I want to know I paid the lowest price for what I want to buy. At the very least I want to know that I am not being cheated.
        If you really mean this as an example of being cheated, I'd suggest that perhaps you could modify your bid strategy to not include bidding $100 for something worth $50. Not defending shill bidders, don't get me wrong, I'm just saying do your research of what something is worth before you set the number, _or_, overbid and know you're going to be highest. But don't complain about it if you use the latter approach.
        • Re: (Score:3, Insightful)

          by rblancarte ( 213492 )
          Don't get me wrong. My example is a very extreme case, but it is designed to demonstrate a point. That you can have a max price, have that price never match by legitimate interested parties, and then have shill bidders drive my price up to my max bid. Be it $5 or $50, if I am paying higher prices because shill bidders drive up my price, then that is flat our fraud.

          BTW - to those of you who pointed out that whole "Why pay $100 for something worth $50?" Again you missed the point, that was an example, an e
        • Re: (Score:3, Insightful)

          by Qzukk ( 229616 )
          Then, why in the world would you (a) bid $100 for it, and then (b) complain when you didn't get outbid?!?!?!

          Why does anyone bid on anything? Hell, why have auctions in the first place? Why don't we simply have everyone write down what they want to pay, turn it in, and the highest number wins? That would save everyone time and angst, and all those fast-talking auctioneers can go get jobs reading the fine print at the end of commercials.
      • by arete ( 170676 ) <areteslashdot2&xig,net> on Monday January 29, 2007 @01:15PM (#17801502) Homepage
        I had a shill bidder push me up, then literally bid OVER my price, winning the bid themselves. And I stopped bidding. Then they RETRACTED their bid (which is supposed to already be suspicious) to make sure they didn't win.

        I reported them to Ebay, back when the names showed, along with various evidence that the accounts were tied together. (The previous-name of one of them was real-name type username with the same last name as the real-name type username the other one was using... from the same city.)

        I did not get my money back - although it was only $1, and it was still a reasonable deal on the item. And I wasn't willing to refuse to pay because I didn't want to screw up MY feedback, and I didn't have enough transactions to make it unimportant.
    • Re: (Score:3, Insightful)

      Am I the only one failing to see the damage done here?

      It's plain and simple fraud. And "Reserve Prices" don't have anything to do with it. There is nothing dishonest or fraudulent about selling something with a Reserve Price, because the buyer is notified of it. Shill bidding is not an honest practice in the slightest.
    • Re: (Score:3, Insightful)

      by ThePhilips ( 752041 )

      Am I the only one failing to see the damage done here?

      You are not alone - count me in.

      To me, eBay was always a gambling site. There is NO other point in auctioning.

      I personally look only at "Buy It Now" marked wares. Rest? Not for me. If I wanted to gamble, I'd rather went to arcade/game center/whatever.

  • by 140Mandak262Jamuna ( 970587 ) on Monday January 29, 2007 @10:45AM (#17799396) Journal
    Am writing this book. Pre-register to buy it on Ebay! now.
    • From real auctions to online, I try to research the items and set a value to me without looking at the expected prices. Then I write down the max I would possibly offer for something and in the auction, I stick to it regardless of frenzied bidding. If someone else wants it worse than I do, I let them have it. It keeps me from overpaying at auctions.

      Sometimes I spot a nice item I don't have a need for and sometimes toss in a token bid. That's how I got my punch bowl set with 12 glasses and a silver ladle
  • Circumvention (Score:5, Insightful)

    by UbuntuDupe ( 970646 ) * on Monday January 29, 2007 @10:47AM (#17799420) Journal
    Correct me if I'm wrong, but it doesn't seem to matter all that much if you can't see the identity of the bidder. Isn't it pretty trivial to have some small network of people that agree to shill bid for each other?
    • Re:Circumvention (Score:5, Informative)

      by clickety6 ( 141178 ) on Monday January 29, 2007 @10:58AM (#17799572)
      Because you can look at the user feedback and see if there is a lot of cross-feed-backing going on between the involved parties and also you can see if these are low-feedback users raising the bid.

      I had this happening to me once. I'd put in a bid and then somebody would raise it and raise it again until just topping my bid, then withdraw the highest bid. Complained to EBay but they did nothing. In the end, I waited a while after the shill's last bid, then put in a bid of my own. The shill really quickly raised it again a few times then withdrew his last bid that topped mine. At which point, I withdrew my last bid and left the shill in the winning position with a few seconds to go and a bid that was too old to withdraw. So he ended up paying EBay for the privilege of selling the item to himself ;-)
    • by daeg ( 828071 )
      For small-time sellers, yeah. But if you're, say, frequently buying Product X from Seller Y, and you always see Buyer Z bidding on the products you buy but never, ever winning, you can at least deduce that you're being scammed.

      Without seeing the identity of the bidder, you have no chance.

      The good days of eBay are long gone -- eBay is filled with crap from "sell it now!" type rip-off stores, "wholesale" sellers that aren't really selling wholesale, defective merchandise, and scams... all topped off with horr
      • by jandrese ( 485 )
        You fail at 4th grade math class, you know, the one where you learned how the greater than and less than symbols work?
    • In which case is not trivial to create an algorithm that would spot this as a trend in auction activity ?
      Especially where the seller is creating a lot of bids and item sales.
  • It seems like for every listing I see, reserve price == Buy it Now price.
  • by antifoidulus ( 807088 ) on Monday January 29, 2007 @10:52AM (#17799496) Homepage Journal
    Perish the thought!
  • by hal2814 ( 725639 ) on Monday January 29, 2007 @10:52AM (#17799506)
    The way eBay pricing is set up (percentage of winning bid amount plus flat fee), eBay welcomes the shill whether they act like they do or not. eBay still gets their piece of the action and the seller is still stuck with the item they need to sell. The seller could just create new shills each time they're needed and cry dead bidder to eBay, but once you start to hurt eBay's bottom line, I'm sure they'll notice and take action.
  • People must be pretty dense if they didn't know this.

    It is also pretty common for sellers to pose as different entities - if you follow enough links for similar sales, you'll pretty quickly find that they al lead back to the same store.
  • Since there's nothing whatsoever to prevent you doing this of course its going to be widespread.

    At the last office I was contracting in the whole lot of them would bid on each others auctions to push the price up, they were even having a competition amongst themselves to see who could push the price the most above the actual price of the item and still have someone buy it.

    I've only ever sold one item on E-Bay and it's a very tempting course of action, the only reason I didn't bid myself is because the price
  • by MSFanBoi2 ( 930319 ) on Monday January 29, 2007 @10:56AM (#17799552)
    Then what the seller does is send you a "second chance" email if you are the last bidder saying that the original bidder didn't pay or what not and lets you pay what they were offering for the item. The Second Chance is now an offical Ebay thing... which of course is being abused by the Shrills...
  • What stinks the most with eBay is that now sellers can sell their items at fixed price. It sorts of defeats the purpose of auctioning an item.

    if now sellers do shill bidding eBay should simply remove the auctioning possibility and just call themselves eFleamarket or something.

    But they're much too happy selling at a high price with shill bidding or even higher when the item is rare.


    The only good thing about eBay is the possibility of finding rare/no-longer in production items. That's probably i still g
    • That's probably i still go from time to time even when i know i pay more than what its worth.

      Assuming that you attach meaning to your words, what you've described is impossible.

      And that's the reason why Ebay can justify their inaction against shill-bidding: bidders on Ebay never pay more than they consent to. Shills merely exist to prevent bidders from getting a better price.

      You know that the bidders are all hoping to rope that rare item in for $1. While I find the concept of shills to be offensive, a

  • by King_TJ ( 85913 ) on Monday January 29, 2007 @11:02AM (#17799612) Journal
    I tend to agree with the people saying "Who cares?" about this practice. When placing bids on eBay, you should know from the start how much you're willing to pay for the product you're interested in. If you think "Cool! I'm winning this radio for only $5.00 and it's easily worth $200!" and then the seller enters a number of shill bids, bumping the price up to $150 - fine. He/she is *really* saying "Sorry pal! I'm not letting go of this $200 radio for only $5.00!" Fair enough. The auction hasn't ended yet. The worst he/she really did to you was get your attention with the artificially low starting price and make you think for a little while you were getting a "steal" on the radio.

    Now, you have to make a decision. Will you pay a "fair price" for this radio, or will you duck out, saying "Oh well, I don't want one THAT bad. I was just hoping the seller was going to lose his/her ass on the sale." ? It's still completely up to you. And if you bail out, the seller has a real good chance of not getting a buyer at all, causing him/her to pay the listing and re-listing fees for nothing.
    • by 0rbit4l ( 669001 ) on Monday January 29, 2007 @11:30AM (#17799968)

      If you think "Cool! I'm winning this radio for only $5.00 and it's easily worth $200!" and then the seller enters a number of shill bids, bumping the price up to $150 - fine. He/she is *really* saying "Sorry pal! I'm not letting go of this $200 radio for only $5.00!" Fair enough.
      Good thinking. While we're at it, I should be able to retract my bids if I detect shillery going on, right? Or if I decide that this bid isn't working out (the way your would-be seller decided this auction isn't working out)? Maybe bidders should be able to say, "Sorry, pal, I'm not letting go of this $150 to a dishonest retailer who most likely is going to try to screw me again!"

      The problem with shill bids is that there's no similar recourse for the buyer. If the buyer's bid is a contract, then why shouldn't the seller's offer to agree to the honest outcome of the auction also be a contract?

      • Re: (Score:3, Interesting)

        by simm1701 ( 835424 )
        Look at the distance selling act for the uk - if you bid on an item, but then choose not to buy it... well you just excercise your rights under the distance selling act - say you don't want it and dont pay. You can even ask for yout money back up to 7 days after the day it arrives - and unless their ts&cs have said otherwise its up to them to arrange to pick it up. (exceptions if its custom work)

        No admittedly getting a refund is going to be hard work if they dont want to give it - but saying you wish to
  • by jsimon12 ( 207119 ) <tzzhc4@yahoo. c o m> on Monday January 29, 2007 @11:03AM (#17799640) Homepage
    You ultimately vote with your dollar on this one.

    -If an auction costs more then you want to pay, DON'T BID.
    -If a seller looks like they are cheating, DON'T BID.

    And ultimately if you feel you have been cheated don't pay, sure you might get a negative feedback but why put up with unfair pricing. If you don't pay people will STOP doing it because they won't sell.
  • now wait a sec... (Score:5, Insightful)

    by theheff ( 894014 ) on Monday January 29, 2007 @11:08AM (#17799692)
    Shill bidding or not... the buyer still enters their maximum price that they are willing to pay for that particular item. If you don't want to pay that much, then don't bid that high! The complaints seem a little misplaced to me. Plus, the fact that everybody and their brother uses eBay now doesn't help prices.
    • Re:now wait a sec... (Score:4, Interesting)

      by Se7enLC ( 714730 ) on Monday January 29, 2007 @11:30AM (#17799970) Homepage Journal
      Let's say there's an auction for an item you want. Nobody has bid on it, yet, so you throw in a $50 bid. You would pay $50 for it, but for the moment, it's sitting at the $10 starting price.

      You end up winning the auction for exactly $50. Is it because the other guy only wanted to spend $49.50 and you happen to have outbid him? No, it's because the shill bidder put in increasingly higher bids until they outbid you, then canceled the bid saying "oops, I put in the wrong amount". Or they keep the bid, default on the payment, and the seller will use eBay's "Second Chance" bid to allow you to pay for it at your previous bid (which was the $49 or whatever).

      If the seller wants to guarantee a minimum price, they should use the reserve price. Or better yet, use the STARTING BID. You're not fooling anyone listing an item at $1 and then setting a reserve for $30, just start it at $30. If it's worth $30, somebody will buy it. In my opinion you should be required the validate by address, credit card, bank account or other form before you are allowed to have an eBay account. That way fraudulent bidders can be held accountable.
    • a fair auction isn't one where you pay the maximum price *YOU* would be prepared to pay for something... its where you pay the maximum price *THE NEXT HIGHEST BIDDER* would have payed for it.

      Shilled auctions DEFRAUD the bidder of the difference between those prices. Period.

      Oh and btw (not directed at parent poster...) shilling is NOT equivalent to setting a reserve price on an auction. Reserve prices are set before an auction starts and represent the lowest price the seller would be willing to sell for. Not
  • I quite often see items where the bid goes above the price the item would cost new retail, or at the "buy it now" price from another seller. Now I have a pretty low opinion of Joe Public's intelligence, but that's pushing it. Surely most people have enough sense to check what things are actually worth before bidding, in which case a lot of those overly high bids must be this kind of fraud?
  • Hmm (Score:4, Interesting)

    by Anon-Admin ( 443764 ) on Monday January 29, 2007 @11:16AM (#17799802) Journal
    I don't have a problem with it. It has happened and will continue to happen. What I have the biggest problem with is the "Second Chance Offer." I have bid fair price on many (one of a kind) items only to get out bid by something that looks like a shill account. After the auction ends the seller makes a second chance offer to me at the price of the highest bidder.

    So I bid 10$ on an item that I am willing to pay 10$ for, Some one outbids me and the number goes to $11, I up the bid to $15 and am again outbid 1$ at a time. At this point I walk away. I then get a second chance offer to buy the item for the 17$ high bid. What makes me even more suspicious is when the same item is then relisted and the pattern repeats itself.

    In all honesty, it's e-bay, It is not worth getting worked up over! You win some and you loose some. If you think the seller is a ripoff, add them to your favorite sellers list and put a note stating your opinion of them. Then make sure you do not buy from them again. It would be nice if E-Bay offered a way to tag sellers you do not want to do business with and let you ignore there listings.
    • Re: (Score:3, Interesting)

      by chuck ( 477 )
      Let's work on your logic skills:

      So I bid 10$ on an item that I am willing to pay 10$ for

      I up the bid to $15
      f'n why???
  • Suppose that I'm selling a valuble widget that I want to sell for $6. However, the highest bid so far is $4. Suppose I bid $5 on my own auction. Then there are two possibilities:
    1. No one bids more money. I end up paying Ebay to sell it to myself.
    2. Someone bids the $6 I want and I sell it to them. Clearly they are still willing to pay $6 for it so I don't think I've 'harmed' them.
    Basically, if I bid up my own auction I increase Ebay's profits, harm no one else, and potentially hurt myself. W
  • Shill bidding isn't illegal, its just against ebay's terms and conditions.

    The same goes for the cure against shill bidding - bid sniping - which if done with software is against ebay's terms and conditions.

    Either way though - pick the amount that you are willing to pay fo the item and bid it. Don't bid more than that.

    If everyone did that then the system would work perfectly, alas the problems start when you add humans to the equation.

    Now if you'll excuse me I have a mobile phone to ship to a guy in nigeria
    • Re: (Score:3, Interesting)

      by AtomicBomb ( 173897 )
      I do academic research on online auction (although not on the legal side). I believe I have a bit to say upon this topic.

      Shill bidding is illegal at least in UK. In fact, making any artificial distortion to an auction market is illegal. I can make two examples and most will agree while collusion between bidders/sellers *should* be classified as a crime. First example: in a fish market, the fish buyers form an illegal cartel. Only one of them bid for the whole lot of fish at the min price and divide the
  • yay ebay politics (Score:3, Informative)

    by Danzigism ( 881294 ) on Monday January 29, 2007 @11:36AM (#17800042)
    just wanted to share a little ebay story.. I purchased a 60gb Seagate Harddrive for $25 buy-it-now from a Seller with 100% Positive Feedback (47).. Not bad, so I figured I'd give it a try.. He only accepted money orders, which I thought was a little suspicious, but I figured he has been doing this for a while, so there's nothing to fear.. also, he used a fancy checkout system from MarketWorks.. I sent the money order via priority mail so it'd get there super quick.. The next day eBay emails me to say that the Seller I bought from was actually a hacker that took over somebody elses account, and they cancelled ALL his listings, and suspended the account.. They apologized numerous times, and I explained to them that I already sent the money order.. They "recommended" that I file a dispute right away so I can get my money back.. I go to file a dispute and it says that I need to wait 10 days after the start of the transaction to determine its a valid dispute..

    its just ridiculous because they're already determined its a valid dispute.. the stupid bastards cancelled all his auctions and suspended the seller's account.. doesn't that give me the right to automatically start this damn dispute so I can get my money back? of course not.. I could of stopped payment on the Money Order, but I rather keep this fight with eBay going.. there's still quite a bit of work they need to do to stop all this fraud.. I've filed formal complaints with I3C and with the USPS for mail fraud..

    I guess what is equally as ridiculous is the fact that someone would go through so much time listing auctions for a measley 30 bucks, and having the possibility of getting charged for mail fraud and being under investigation by the IC3..

  • by erroneus ( 253617 ) on Monday January 29, 2007 @11:54AM (#17800332) Homepage
    Never bid higher than you think something is worth. Further, I would suggest just bidding once: the maximum bid you would make... adding cents to the bid is often helpful to that end. (ex: max bid of $20, I might make it $20.03 or something like that)

    Another rule is never risk more than the amount of money you feel comfortable risking. Determinations for that level of risk vary from person to person, but don't decide how you feel about it until you have read that seller's feedback and looked at the other items this person has bought or sold. If you still get a good feeling about it, then great!

    *ALWAYS* look at the forms of payment accepted. People get caught up into uncomfortable payment situations when they don't notice beforehand.

    *ALWAYS* know what the shipping costs are. This is a great one to pay attention to. If you think a PS3 for $20 is a great deal, check the shipping cost. It might be well over $500 or something ridiculous like that. Shipping costs are rarely, if ever, refundable.

    These may seem like common sense for everyone, but common sense goes out the window when a buyer "really wants something" bad enough. It's that "really want it" disorder that really gets people mixed up into things they shouldn't... this "really want it" disorder is the reason spammers are so successful. Most sane people know they shouldn't buy from people who hide their identities, but when they "really want it" common sense just fades away. It's really like religion and beliefs in gods... they really want it, so logic, reason and common sense just fade away where that issue is concerned.
  • by dpbsmith ( 263124 ) on Monday January 29, 2007 @12:10PM (#17800540) Homepage
    Yes, it does matter, because dishonesty is dishonesty and fraud is fraud, but it seems to me that there is a perfectly simply buyers' algorithm:

    a) Look at the item. b) Ignore any minimum bids, reserves, "buy it now" prices, current bid, history, etc; look only at the item itself. c) Decide how much you are willing to pay for it, shipped; d) determine the shipping cost; e) bid your maximum less shipping; f) take no further action whatsoever. Do not change your bid in response to any other ongoing bidding. If you are willing to raise it later, you weren't being honest with yourself when you determined your maximum earlier.

    It seems to me that this makes you completely immune to sniping, shill bidding, etc. The only issues that remain are: a) the possibility of frequently being disappointed by not winning the auction; b) the unfairness of being unable to distinguish in advance between honest sellers, with which you may have a chance of getting a bargain if there are few other interested bidders, and dishonest ones, where there are always other interested bidders (i.e. shills).
  • by Bones3D_mac ( 324952 ) on Monday January 29, 2007 @12:19PM (#17800680)
    I have to say that trying to claim someone somehow *forced* you pay too much for an item, after you already agreed to it by entering a maximum bid is pretty laughable. How does creating the illusion of high demand for your useless junk amount to criminal fraud? Sure, it might seem unethical, but how is it any worse than writing a clever description for an item that makes it seem better than it really is? (Just like all those other modern advertisements you're exposed to hundreds of times each day.)

    If you've actually been a "victim" of a shilled auction, maybe you should focus on becoming a more intelligent buyer, rather than accusing the seller for being creative enough to draw you into a legally binding sale. Nothing illegal has happened here. You lost no more money on the item than you were willing to pay for it. The only thing that did happen is that greed/hoarding instincts or need for instant gratification overruled your judgement for that fraction of a second where you clicked the "submit bid" button before looking for any other sellers offering the same item.

    A sucker truly is born every minute... and no place shows it more than eBay.
  • by madsheep ( 984404 ) on Monday January 29, 2007 @12:28PM (#17800812) Homepage
    I see all kinds of accusatory posts which I would have to disagree with. I've been a long time eBay user and that's mostly as a seller (a silver powerseller for a chunk of it). Now I never participated in shill bidding and would even ban friends of mine from bidding on my auctions. Occasionally I'd shoot them a link to just show them what I had posted and they'd bid on it (usually to get it started) thinking they'd be doing me a favor. For example, if I was selling a $500 monitor they might have bid $40 or something. However, I want absolutely nothing to do with this and I will add their user IDs to be banned from bidding on my auctions the second I see this.

    Why? Because I have seen/spoke with people that took part in shill bidding. This will include people that just did it every few auctions and were Gold Powersellers, with well over 1000 positive feedback. Guess what happened to them? Two different things - automatic account termination and/or warnings. I've seen a huge seller (makes $$ for eBay you know) have their account closed, no questions asked. This (AFAIK) was not as a result of a complaint either. We're not talking these retards that bid up the auction and then cancel once they see what the first place bidder's amount was.

    Anyway, I would say eBay does a good deal to try and stop this practice. So I'd ask that some people not post unless they know what they're talking about. It seems like a lot of people are talking out of their asses. It can be difficult to catch everything on a site that busy. Why don't you just go solve the problem for them instead of posting useless bullshit here.
  • by dfnr2 ( 567350 ) on Monday January 29, 2007 @12:37PM (#17800954)
    I see a lot of posts claiming not to understand the problem with shill bidding. I'll give you a scenario. The key here is that INFORMATION is MONEY.

    Imagine your wife's grandma's heirloom china set is worth $400 on the market, but priceless to her. You have recently dropped one plate, and it's irreplaceable. The plate is worth $80 on the market. 6 months later, you see the plate on Ebay, drawing insipid bidding, reflecting relatively low demand, stuck at $40. Your web design business has been doing well, and you can afford $200 to get back in grace with your wife. You therefore bid $200, raising the current bid to $42. On the final day, you see a series of bids in , all by the same person, raising the price to $160. This is the point at which the shiller did not dare to raise the bid for fear of outbidding you.

    Effectively, he got free information about how much you are willing to bid. Information is money. It's like when you're bargaining on a used care--you start with your offer. You don't tell the salesman how much money you brought, and then start bargaining.

    In the example above, you pay less than the item is worth TO YOU, but more than market, because the shiller was able to tease that info out of you.

    • Re: (Score:3, Interesting)

      by paeanblack ( 191171 )
      Imagine your wife's grandma's heirloom china set is worth $400 on the market, but priceless to her. You have recently dropped one plate, and it's irreplaceable. The plate is worth $80 on the market. 6 months later, you see the plate on Ebay, drawing insipid bidding, reflecting relatively low demand, stuck at $40. Your web design business has been doing well, and you can afford $200 to get back in grace with your wife. You therefore bid $200, raising the current bid to $42. On the final day, you see a series
  • by Draconmythica ( 1057150 ) on Monday January 29, 2007 @01:08PM (#17801406)
    Ok guys I know this has probably been said a hundred times already but why don't you really think about it. Why is this a big deal? You go on Ebay, you bid on something. You then win it or not, nobody is holding a gun to your head making you bid more till you get it. SO WHAT IF THE SELLER UPS THE PRICE YOU DON'T HAVE TO PAY IT. You only pay what you want for the item! It is ridiculous to even call this fraud and you should all grow up and think for yourselves.
  • by ajs318 ( 655362 ) <`sd_resp2' `at' `'> on Monday January 29, 2007 @01:23PM (#17801636)
    The practice of shill bidding has been going on since forever, anytime anyone has ever sold anything for a negotiable price. One strategy is to place a phone call from a pub or café, ostensibly begging to borrow some money to purchase an item from a nearby antique shop or market stall which is claimed to be on offer at a price much lower than its true value (which is invariably mentioned, possibly along with the name of a potential purchaser) and about which the caller is clearly rather excited. Of course, the "caller" is part of the scam, in league with the seller; and fully expects to be overheard by someone, who then departs quietly and purchases the item (in reality worth very little and marked up) before the loan can be completed.

    Of course, the scam only works because of the eavesdropper's greed -- they get so carried away by the thrill of listening in on a private phone call and discovering a little secret that they weren't supposed to know about, that they totally forget that it might not even be for real. You can't con an honest person.

    Just remember, fools and their money are soon parted. Treat eBay just the same as any other form of gambling, and never spend more than you would be prepared to lose. If the bidding goes above what you wish to pay, walk away. If the seller does win their own item back, they will still have to pay the listing fees, plus PayPal's cut, which can provide some measure of disincentive against shill bidding ..... but only if buyers keep their cool and don't get auction fever.

Don't tell me how hard you work. Tell me how much you get done. -- James J. Ling