Mention the term "Shill Bidding" in an online auction message forum or chat room, and it suddenly turns into an electronic version of the McCarthy hearings.
Why?
Because shill bidding is one of the most frowned-upon practices in the auction world, both real and online, and like Communism in the 50's, it's often suspected, but difficult to positively identify. Bid shielding (another term for shilling) may still exist at live auctions, yet it becomes less and less frequent as auctioneers become acquainted with the people who attend their auctions.
According to Boston-area auctioneer, Sharon Boccelli, "We do mostly probate. If there's bid shielding going on, it's generally a stranger or a person who is related to the estate. If it is a family member who is bidding, they have every right to try and win an item. What we as auctioneers have to do, is determine if they are bidding solely with the intent of driving up the price of the item."
Where shilling seems to thrive is in the anonymous environment provided by the Internet. Clever sellers who bid shield take great pains to cover their tracks. They might spend months building up extra accounts that they can use as "shills" to bid on their own auctions. A seller who successfully runs these auctions can literally go years without being detected. And yet, some perfectly legitimate auctions can smack of bid shielding.
"There have been cases where eBay has actually phoned a seller whose auctions had an irregular bidding pattern," said eBay spokeperson Kevin Pursglove. "And in many cases we had to apologize to the person because the auction was perfectly legitimate."
So, the question is: should you report a shill, or not?
eBay relies on its users for help. And while eBay doesn't condone a "Posse" mentality, it does encourage users to alert them to suspicious activity on their site. But that's not always a clear-cut decision. "One of the problems is that users may think that they can ID a shilled auction," explained Pursglove. "But at the same time, they're not privy to all of the information eBay has."
That may be changing, though. In Mid-October eBay revised the way bids were displayed in the Bid History pages of each auction. Instead of showing only the bidders of an item, all non-retracted bids are now displayed. This change came about after users requested a more complete view of bidding information, primarily to discourage shill bidding. Ebay's hope is that this new feature will give users a better indication if there is an irregular bidding pattern occurring.
Ebay also institutes a behind-the-scenes technology that tracks bidding patterns on closed auctions. According to Pursglove, eBay has more sophisticated bidding pattern tracking software than any other auction site on the Internet. "There are many sites that don't even use software that tracks bids," said Pursglove. And eBay is upping the ante in its effort to thwart bid shielding. "Right now, only closed auctions on eBay can be analyzed," continued Pursglove, "but soon we will be instituting real-time analysis of complaints of shilling."
Until then, bidders will have to use common sense when bidding on items online. Several eBay users suggested these common warning signs that should, at the very least, make you approach an auction with care:
- Many bids on an auction from different users with 0 feedback.
- The first bid is received minutes after the auction was listed. It generally takes 4-6 hours to have an auction indexed so that it is picked up by eBay's search engine.
- Check where seller/high-bidder come from. Some careless shill-bidders may even register their false ID with an address in their hometown - and when they're sellers/buyers under both names or have partners, they don't have a choice. You can find this contact info on eBay at
http://cgi3.ebay.com/aw-cgi/eBayISAPI.dll?MemberSearchShow. Be aware that if you request contact information about a user, they will also be sent an email with your contact info.
- Same country/server/location/language/terms/registration date.
- An account that has won auctions, but never received any feedback.
- Most sellers who routinely shill use accounts with zero feedback. An even stronger indication is an account that has received feedback from only this seller.
- Both the seller's and bidder's auctions have auction images that are hosted on the same private server.
- Bidders all sign up for eBay within a short period of time.
- Bid retractions.
- High bidder retracts bid after pumping up the bidding.
If you suspect shilling is going on, avoid the auction. If you're the current high bidder, cancel your bid immediately, with the explanation "irregular bidding pattern". If you have proof that shill bidding is going on, contact safeharbor@ebay.com.
NOTE: Thanks to everyone who responded to our request and shared their shill bid experiences!
