Shill Bidding on eBay: a Case Study

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Shill Bidding on eBay: a Case Study

(Or, the facilitating and concealing of fraud by eBay)

With critical comment on the mechanics of eBay’s auction platform

31 March 2009; last revised 31 August 2009

Synopsis

The purpose of this narrative is to demonstrate that:

 very little of the auction system security, that eBay claims to offer buyers, exists in fact;

 contrary to their claims, it can be demonstrated that eBay has no “proactive” nor “sophisticated” system in place for the detection of undisclosed vendor (“shill”) bidding, and indeed eBay does nothing about such criminal activity except as a reaction to a user’s report of such activity, and even then eBay’s ultimate response will be nominal;

 eBay has no effective matter-of-course verification of users: unscrupulous users can apparently have as many user IDs as they may have email addresses;

 many of eBay’s “rules”, concerning the retraction of bids, cancellation of auctions, etc, are nominal only and are no bar to the machinations of the unscrupulous seller;

 as a result, eBay’s “proxy” bidding system is so open to abuse by such unscrupulous sellers that to use it, as eBay intends it to be used, can be an invitation to pay the maximum you have indicated you are prepared to pay;

 by the lack of any effectual system to proactively detect shill bidding, eBay has ever effectively, and knowingly, “aided and abetted” unscrupulous shill-bidding sellers to defraud naïve buyers; by so doing, eBay benefits from a higher “final valuation fee”;

 the masking of bidding IDs with non-unique, absolutely anonymous aliases serves no purpose other than to further obscure all but the most blatant of shill bidding, and defeats any attempt at programmatic analysis of bidding patterns to expose such activity;

 the quarterly changing of even these non-unique, absolutely anonymous, bidding aliases serves absolutely no other purpose than to stop even experienced eBay users from attempting to even manually track suspicious bidding activity over time;

 the anonymous, individual bidder Bid History Details pages, supposedly supplied to offset the absolute masking of bidding IDs, although better than nothing, will usually present an ambiguous view and, in such circumstances, are of little value;

 anyone naïve enough to make other than a last-moment “snipe” bid on a seller-elected “private” auction (ie, “User ID kept private”), on the balance of probability, is going to be defrauded—and eBay knows it;

 when suspected fraud is reported, and is found by eBay to be proved to their satisfaction, eBay will conceal that fact from the victim of the fraud; this then is the concealing of a crime after the fact—surely, a crime in itself;

 eBay will never acknowledge to a victim that a fraud has been perpetrated, nor indeed will eBay acknowledge that such fraud is even a problem on eBay auctions; eBay therefore sees no reason to provide any mechanism to aid in the recovery of any monies so defrauded;

 if eBay did have any proactive and truly sophisticated system in place for the detection and control of shill bidding, we would not now be having this debate;

 for those buyers (and honest sellers) who embrace eBay believing that eBay acts as an “honest broker” between buyer and seller, I can only say that you may as well believe that there are fairies at the bottom of your garden too; and

 the most outrageous aspect of this matter is that, quite rightly, we all would be annoyed if our local auctioneer, from whom we had been buying, was found to have been facilitating and concealing such criminal activity—and here is eBay, knowingly, doing just that to the whole world!

Foreword

The original, very brief, version of what has developed into this detailed criticism of eBay lasted only a couple of hours before it was pulled from the eBay Australia “Round Table” forum—that alone should make it worthy of a read.

eBay is a listed public company; it’s only reason for being is to maximise the wealth of its stockholders, and on the basis of any improved performance is calculated the “performance” bonuses paid to the senior executives who make the decisions that produce any such improvement in wealth. Needless to say the managing executives of eBay are currently not receiving any performance bonuses—at least not “above the table”.

Some cynics even suggest that recent events in the world of commerce would indicate that the purpose of such public companies is actually to maximise the wealth of the managing executives; that any consideration for stockholders is incidental. Now, how could anyone possibly get that impression?

Non Sequitur by Wiley

Regardless, in attempting to maximise that performance, such executives should not be allowed to knowingly facilitate the defrauding of the “buying” users of eBay’s service by those unscrupulous shill-bidding “selling” users, nor conceal such crime after the fact—which can be demonstrated to be presently the case.

Regrettably, eBay has become a classic representative of the uglier aspect of the free enterprise system; the statements produced by eBay’s “Department of Spin” could lead a thinking person to believe they were actually dealing with one of the tobacco companies.

eBay has most successfully exploited the internet; I think then that it is appropriate that that same medium be used to expose eBay for what it, as a public company, has become—or, probably, has always been.

As well as one can from the outside, I have examined the detail of eBay’s auction mechanism. Much of what I see I do not like. I think that eBay’s effective facilitating, and subsequent deliberate covering up of fraud on its buyers by unscrupulous sellers, is outrageous and needs never to be forgotten, and users should maintain pressure on eBay via the media and the various governmental consumer affairs regulators until eBay desists from such unconscionable behaviour.

And, please don’t misinterpret my reasons for publishing this criticism of eBay. I enjoy dabbling on eBay but I really do object to eBay’s knowingly exposing me to being defrauded by its unscrupulous shill-bidding sellers while, at the same time, disingenuously assuring me that their system is fair and secure. In fact, eBay is ever going out of its way to further obscure such criminal activity.

I am predominantly a buyer and so these comments are primarily from a buyer’s perspective; the problems honest sellers have with eBay, frankly, are simply too many for a mere “buyer” to comprehend and deserve their own narrative.

Frankly, I have to wonder, where are all the governmental consumer affairs regulators in this matter? Has eBay “bought” them all? I had the impression that the days of the unscrupulous “robber barons” were long gone, at least in the first-world countries. Apparently, I was wrong: it appears that our old friend Gordon Geko is alive and well and at the helm of the good ship “eBay”.

This is a “living” document. I will update it from time to time as more holes are found in eBay’s “clunky” auction structure. If anyone (including eBay) would like to dispute any of the facts that I here present or the conclusions that I drawn therefrom, they are welcome to do so, or if anyone can point out any other flaws in the eBay auction system, and would prefer to communicate directly, my email address is formset@exemail.com.au.

I would also ask anyone who has noted suspicious patterns of bidding on any auctions, that have ended within the past 90 days, to supply me with the auction numbers and the ID of the suspect bidder. Of course, I am particularly interested in collecting examples of blatant shill bidding, ie, many auctions/bids with high percentage with one seller.

Introduction

Obscured now by eBay’s introduction of “hidden bidders”, undisclosed vendor bidding (ie, “shill” bidding) now appears to be running rampant on eBay. Never before have so many “newby” IDs (and some not so new) been seen bidding on multiple items from the same sellers. And these are only the naïve shill bidders that are now the only ones that can still be detected without any great effort. With the introduction of “hidden bidders” (particularly in the non trackable “Bidder x” form still is use in the UK) I think that it can be said that the more sophisticated shillers can now go about their craft with very little fear of detection.

However, with some effort, on sites using the “a***b (x)” form of alias, they can be found, and I have noted more shills than genuine bidders bidding on some sellers’ auctions: these are the more sophisticated shills and possibly a group of dealers colluding to bid on each other’s auctions. (But, don’t you worry; eBay with all their shill detecting tools will stop these naughty shill bidders from defrauding you …)

This case study initially involved two auctions from the same seller and I believe it demonstrates beyond any doubt that—contrary to eBay’s claims—eBay does not have any “proactive” system—let alone a “sophisticated” system—for the detection of even such blatantly obvious and naïve shill bidding as is contained in these following several examples and, again, such examples can only reinforce the conclusion that, notwithstanding eBay’s statements about shill bidding being prohibited on eBay (it’s fraud and therefore it’s a crime, anyway), eBay appears to be concerned about shill bidding only to the extent that they cannot obscure it totally without appearing to be even less principled than they already appear to be, that is, without going into negative values for the measurement of such matters.

Auction 1

Seller ID: salguerosartsngifts
Auction Nr: 350181526972
Auction ended: 29 March 2009; 15:28:18

The “bid history” details that suggest that this underbidder is a shill are:

Bidder Information

34

30-Day Summary

190

41

100%

So, in the preceding 30 days this underbidder made 190 bids on 41 items, of various types of goods, all from this one seller only. This underbidder also stopped his “nibble” bidding at the point when he equaled the maximum proxy bid value of the ultimate buyer (we know that because the genuine bidder’s bid did not automatically advance any further, and so this nibble-bidding shill did not even need to retract an “overbid” to reinstate the genuine bidder as the winner).

At that point the underbidder would also have understood that only one more incremental bid was required for him to win the item; but he did not make that one more bid. What then is the chance that this underbidder is not a most naïve and blatant shill bidder? Absolutely none!

In this particular instance the only genuine bidder’s bid was artificially increased from the starting price of $49.00 to the bidder’s final maximum proxy bid value of $205.00, and the effect is that the buyer was defrauded of the difference, $156.00.

And, what then about the many other items from this same seller that it is indicated that this same underbidder placed bids on but undoubtedly failed to win?

Have a look at the below auction Bid History page (Fig 1) which displays one of the most blatant and naïve examples of “nibble” shill bidding that could possibly be observed, and then have a look at the “Bid History Details” page for this underbidder (Fig 2) whose masked alias was at the time “h***r (133)”, but will be different in real time next quarter. (I’ve not been able to find an eBay announcement regarding this periodic changing of these already masked aliases, nor the reason they give therefor; the cycle of change appears to be quarterly.)

Fig 1: Auction 1 “Bid History”

Fig 2: The underbidder’s “Bid History Details”

Auction 2

Seller ID: salguerosartsngifts
Auction Nr: 350181570367
Auction ended: 29 March 2009; 20:41:20

In this subsequent auction, that finished five hours later, the shill made 25 nibble bids and stopped his nibble bidding at $200.00 and the high bidder won the item at $202.50.

Knowing from the previous auction that the same genuine bidder had bid a maximum of $205, the shill obviously thought it prudent to not go the whole hog again. Still the buyer was defrauded of a further $153.50.

And still the genuine bidder did not tumble to what was going on. But have no fear, eBay with their “sophisticated, proactive” shill-bidding detection tools will protect us, after all “shill” bidding is prohibited on eBay; we know that because eBay tells us so!

Fig 3: Auction 2 “Bid History”

Auction 3

Seller ID: salguerosartsngifts
Auction Nr: 350210763708
Auction ended: 16 June 2009

This same seller appears to be still at it (see Figs 4, 5, 6, below); the underbidder “_***9”, a newby, is, on the balance of probability, another naive shill; of the 17 items that he has bid on, 11 of them are from this one same seller, all of different types of goods. On this auction, it’s only a petty single-bid shill, but the point is that with “hidden bidders” the more sophisticated shillers are now undetectable, and eBay is, in effect, knowingly aiding and abetting them.

In this instance the shill has been bidding on more than one sellers’ items. eBay does not flag this seller’s auctions in the bidder’s 30-Day Bid History list—we have to try and work that out by ourselves, and it is only possible to ascertain that the shill is bidding on eleven of this seller’s items by tediously comparing the item “category” on the Item page with that of items on the Bid History Details page, and even then they don’t match exactly, the Item page indicates the category is “Antiques > Furniture > Chairs” while the only possible match in the Category column on the Bid History Details page is a truncated item description “Antiques > Chairs”. Further, the anonymous seller aliases (ie “Seller 1, 2, 3, …”) change on a daily basis as the information “rolls over” the 30-day summary period. How much more ambiguous and/or obscure can eBay make it?

This seller is still trading on eBay (albeit without any more blatantly obvious shill bidding from bidder “h***r”; but we can’t be sure of that as we cannot ascertain the shiller’s unique anonymous ID, so we can’t look up his feedback, nor track him over time). And, not even restricted to fixed-price selling. Let’s face it, eBay cannot afford to de-register all the shill bidders, as I suspect such an action would have a noticeable detrimental effect on their bottom line, and more importantly, those executive performance bonuses: you know, those “performance” bonuses that they aren’t presently getting—because they aren’t performing!

Fig 4: Auction 3 “View Item” page

Fig 5: Auction 3 “Bid History” page

Fig 6: Auction 3 “Bid History Details” page

The generalities of the matter

This ever diminishing transparency of the bidding process serves only one purpose and that is to obscure matters, the effect of which, if not deliberately to aid and abet the fraudsters, is to hide such activity so that eBay does not have to do anything about it. But, then, if you don’t know that you are being defrauded, what’s the worry?

Let’s not bother asking eBay why they cannot proactively detect such blatantly obvious shill bidding activity from such damning statistics because most of us already know that eBay simply is not concerned about shill bidding—it has, per se, no detrimental effect on eBay’s “bottom line”—at least not in the short term. The long term, surely, will be another matter. One can only conclude that, so long as such abuse of the system is not noticed and reported by users, eBay sees no problem—for them that is! An unconscionable attitude: quite unbelievable—well, maybe not!

With respect to enabling genuine bidders to protect themselves from shill bidders, the current periodically-dynamic alias (ie, “a***b”) is only marginally better than the original, outrageous, absolutely anonymous, per-auction dynamic alias (ie, “Bidder x”) that was previously in use (and is still in use on the UK site).

I would not then be surprised if the next devious step by eBay in “solving the problem of shill bidding” was the removal of the bidder’s accompanying feedback count so that, in combination with the periodic changing of these masked aliases and the fact that these aliases are not unique and may therefore be duplicated, it would then be impossible for anyone to track a suspected shill bidder over any period of time. Even with the supposed balancing of the lack of uniqueness of these aliases, by the addition of the ever-changing feedback count, it is still possible, however unlikely, to have two bidders with the same alias.

The shill-bidding seller with a little more “grey matter” can very easily develop bid histories for his shilling IDs (arrange feedback too, with some like-minded friends) and rotate them during the (too short) 30-Day Summary period.

And, now that the “winning” bidder also has been masked, other alert users cannot easily warn an unsuspecting “winner” that they have been taken to the cleaners. (And is it not strange that, notwithstanding the reasons given by eBay for the masking of the “winning” bidder elsewhere, in the UK the “winning” bidder was not there similarly anonymised until six months later in May 2009? And what does that tell us about the genuineness of eBay’s given reasons?)

Although an experienced eBayer would undoubtedly notice and be concerned about the activity of the underbidder in these two particular auctions, many unsuspecting buyers (including the winner of both these auctions) will not realize that they are being defrauded.

Also copied below is the “Bid History Details” page (Fig 7) for this same shill bidder as it appears seven weeks later on 21 May. Notice that all the 30-Day Summary and Bid History information that was previously so suggestive of shill bidding is no longer present. This shows how limited is the value of this information and how simple it is for an unscrupulous seller of any sophistication to manipulate same over a relatively short period of time.

The winning bidder’s “Bid History Details” page (Fig 8) indicates that he had the misfortune to bid on (and he ultimately won) two items from this seller, “Seller 1” in this case. Notice also that the data presented could actually lead some to think that this winner could be a shill for the seller. What better example does one need to appreciate that such data, when viewed in isolation on individual pages as it is currently presented, is of dubious value?

eBay spends a great deal of PR effort in the media and elsewhere trying to convince users of the “security” of their system and that eBay is “a safe place to trade”. It would therefore be unfair to call anyone who makes use of eBay’s “proxy” bidding system to early-on lodge a maximum value bid, a fool; I would simply say that, given that eBay’s proxy bidding system is so clearly open to abuse by unscrupulous sellers, you would have to at least be naïve to the ways of eBay to do so.

Non Sequitur by Wiley

The outrageousness then of this situation is that if a genuine bidder does not make the effort (and it is an effort) to dig into the other bidders’ individual Bid History Details pages and therefore is not made aware of (or, due to the sophistication of the shilling, cannot be made aware of) and does not report any suspicious activity, then eBay does nothing! That deserves repeating, eBay does nothing!

In three of these four studied auctions the human brain can very easily ascertain—beyond any doubt—that the underbidders are shills. I can appreciate that it is not simply a matter of a bit of “if, then” analysis of the auction data for eBay to produce an effective “shill probability” evaluation that could be applied to all bidders so that buyers could be more easily forewarned of any possible underlying untoward activity, but eBay has had many years to do something about this scourge on their system and, demonstrably, they have chosen to do nothing!

Much is said about the sensing of IP addresses. What would be the point: a matching IP address is not necessarily a definitive indicator of shill bidding: you could, for example, be on a dial-up connection, sharing the same IP address as your ISP; nor does everyone on a broadband connection necessarily have a static IP address. A matching IP address should be only one indicator that may indicate untoward activity. Such primitive record matching is probably what eBay refers to as their “sophisticated” tools. If the various user forums are anything to go on, eBay wrongly accuses many users of shill bidding on this basis.

It’s “bidding patterns”, not simply the matching of IP addresses (or the presentation of potentially ambiguous data), that best exposes the various levels of likelihood of shill bidding: a shill could just as easily be operating from another country. The detection of such patterns requires that an algorithm of some sophistication be applied to the “live” data. The simple fact is, eBay, notwithstanding (or because of) its dominance of the industry, offers its buyers no such effective protection (some would suggest just the opposite). And that really should be unacceptable.

Fig 7: Auctions 1 and 2 underbidder’s “Bid History Details” +40 days

Fig 8: Auctions 1 and 2 winner’s “Bid History Details”

Auction 4: The surreptitious shill setting of a “reserve”

Seller ID: nobledepaul99
Auction Nr: 160344678456
Auction ended: 5 July 2009

As a matter of interest, this auction (see Figs 9, 10, 11, below) is an example of a shill bidder (“d***d”) who uses a single shill bid to surreptitiously set a “reserve” on his own auctions, in this case $899 (a “losing” type value bid). Additional information (as indicated further below in Fig 14) on the Item View page about this bidder would have, while he was the high bidder, immediately exposed such suspect activity. And, most of the individual Bid Histories of the bidders on this particular auction look somewhat abnormal to me. …

The winning bidder, “s***m” ultimately paid USD909. Figure 10 shows that the next highest genuine bid (by “e***e”) was USD300. Had the shill reserve not been set by the seller, which falsely gave the impression that there was interest in the item by others, the buyer may well have won the item at one increment above that amount (ie, USD310), which means that the winner was effectively defrauded of USD599.

Now, I know that some may say that the buyer paid no more than he was prepared to pay, and to that I can only respond that if you think that that is the way a sale by auction is supposed to work then you are undoubtedly qualified for a job at eBay—assuming that you are not already working for eBay (or you are a shill-bidding seller).

Not all eBay sites are the same, for instance, in the US it appears that a seller can put a reserve on almost any item (for a fee, of course), whereas in Australia a reserve can only be placed on items in the Motors category. Not that the unscrupulous sellers would worry about that as they prefer to surreptitiously set a reserve with a shill bid; that way they can also, dishonestly, represent that there is other interest in the item.

Fig 9: Auction 4 “View Item”

Fig 10: Auction 4 “Bid History”

Fig 11: Auction 4 “Bid History Details”

Bid retraction

Any practical examination of this bidding system will expose how easy it is for unscrupulous sellers and their shills to manipulate the system: the shill only has to “ask” his shill-master if he may retract his then highest winning bid to reinstate the previously highest bidder as the winner.

To be fair to the other genuine bidders, any such highest bid retraction should void all other bids by that bidder, and any other genuine bidders’ highest bid(s) should revert to what they would have been had all the voided bids never been made—and the other bidder(s) notified accordingly. If that was the case such “nibble” shill bidding would be pointless (unless multiple shill bidders were involved), but eBay’s final value fee (FVF) may then be somewhat reduced and we can not have that now, could we?

But, apparently, this is not the case; if a then highest bid is retracted all that bidder’s other lesser bids still remain effective, and the underbidder becomes the high bidder once again at his last automatic “proxy” bid.

This is a mechanism that is grossly unfair to “buyers” and is, in effect, the aiding and abetting of fraud on them—and eBay knows it …

Further, I am led to believe that a “mutually agreed” retraction of a bid is not recorded on a bidder’s Bid History Details page as a “Bid retraction”: only unilaterally withdrawn bids are so recorded! If indeed this is the case, what purpose then does that statistic (that may be of interest to a seller) serve for buyers who have to look at these pages to try to protect themselves from the shill bidders and where any bids that have been retracted by a shill will, of course, be “mutually agreed” retractions? If this indeed is the case, that is simply one more of eBay’s disingenuous and deceptive mechanisms that buyers have to suffer.

Of course, the only time that such a bid retraction would appear be of any real concern to eBay is the mutually agreed retraction of a winning bid after the auction has ended, thus effectively voiding the sale and putting at risk eBay’s “final value fee” (FVF).

Can an unscrupulous seller ascertain a high bidder’s maximum proxy bid without resorting to nibbling? Yes, and it’s even easier and less obvious: the shill simply places a ridiculously high bid, he is then displayed as the winning bidder, one increment above the proxy maximum of the previous highest bidder, he then retracts his high bid with an excuse such as “incorrect amount”. Some time later he then places another bid at or just below that maximum proxy amount of the genuine bidder. Of course, it would look less suspicious if the shill used yet another ID to place the subsequent bid.

And eBay would have us believe that this proxy bidding system is fair and secure—fair and secure for them, maybe.

Auction cancellation

Another trick that can also be used by the unscrupulous seller is to “cancel all bids and end auction early” (Fig 12). That way the seller can see what the bidders were prepared to pay because, would you believe, when an auction and bids are so cancelled, eBay’s system then publishes not the highest “system-placed” bid(s), but the actual maximum bid amounts that the bidders were prepared to pay!

What possible purpose could the publishing of bidders’ maximum bid amounts serve other than to disadvantage them? Unbelievable. Even if we give eBay the benefit of the doubt and assumes that this is a programming error, how many years does it take to fix such an error? So, what is it then, disingenuousness or simple negligence?

You will notice also that this particular seller is also using eBay’s classic, seller-selected, shill bidders’ tool, “private listing – bidders’ identities’ protected”. Anyone who nibble bids on and wins such a seller-elected style of auction, on the balance of probability, will have been defrauded.

Fig 12: A “Bid retraction and cancellation history” page

“Hidden Bidders”

This is formally referred to by eBay as “Safeguarding Members’ Identities” (SMI). Some people naively believe eBay’s story that eBay introduced “hidden bidders” to, and I quote, “help keep the eBay community safe, enhance bidder privacy, and protect our members from fraudulent emails”.

This reason was always patently disingenuous: the problem of fraudulent “Second Chance Offers” (SCO), or any other scam emails, being targeted directly to underbidders or winners was effectively solved by eBay’s blocking of access to users’ direct email addresses.

I have never received a fraudulent SCO. The only SCO that I have ever received was a “genuine” one that resulted from a seller’s failed attempt to shill bid me higher on a piece of unique artwork by an artist whose surname just happened to also be part of the previous user ID (traceable at that time) of the winning bidder who subsequently “did not pay”. Needless to say, when I reported the matter to eBay, eBay reported that they could see no connection.

And, I am not interested in hearing the nonsensical story about people who, even after access to users’ direct email addresses was blocked, were supposedly still being taken in by fraudulent text messages being sent to them via the eBay text messaging system. You would have to be a total idiot to be taken in by such a text message from another “registered” (ho, ho, ho, see “Verification of users” below) user who was identifiably not the seller, and such a user’s mental defect should not be eBay’s problem.

The fact is that the replacing of the unique bidding ID with a non-unique ID makes it impossible for users to track suspicious activity by sophisticated shill bidders. Even with the additional information that has been supplied in lieu (the Bid History pages), it is now only possible to detect suspicious bidding by particularly naïve, habitual, shill bidders.

Whatever the real reasons for this action, eBay could just as easily have used a unique alias; but then users would have been able to keep track of suspected shill bidders over time and, clearly, that does not suit eBay.

And, of course, the latest devious action by eBay—if you have not already noticed—is the periodic (quarterly?) changing of even these non-unique, masked, bidding aliases, ie, “a***b”. (The “Bidder x” form of alias, still in use in the UK, changes every auction!)

What possible purpose could the periodic changing of this already anonymously-masked bidding alias serve? Absolutely no purpose, other than to make it impossible for genuine bidders to keep track of suspected shill bidders over any extended period of time.

The introduction of “hidden bidders” has also stopped third-parties (eg, Goofbay) from providing sophisticated “shill probability” analysis services to eBay buyers—a service that eBay itself should be providing to protect its consumers, but doesn’t.

The conclusion then must be that the introduction of “hidden bidders” never had any purpose other than to do what, in fact, it does do: obscure all but the most naïve of shill bidding, stop the third-party sophisticated analysis of such data, and stop the manual tracking of such activity over time. Undoubtedly so that eBay can avoid having to waste any of their valuable resources doing anything effective about it. (Indeed, in October 2008 eBay announced 1600 redundancies to come mainly from the area of customer service.)

Non Sequitur by Wiley

Having said that, the convoluted “Bid History” pages, introduced supposedly to offset the masking of bidder IDs, at least makes it marginally easier to spot the habitual, blatant, naïve, shill bidder. But even that information, presently spread over multiple pages, is difficult to absorb and could have been more effectively presented, as is suggested further below.

“Winning” bidders also hidden

Then there is the equally disingenuous reason given for the subsequent further anonymising of the “winning” bidder also. Once again, as eBay has blocked access to users’ direct email addresses, a winning bidder was no more likely to receive a scam email targeted directly to them than was any other registered eBay user. Indeed, regardless, a winning bidder is still going to receive the same non-targeted scam “eBay” emails that even non-eBay users regularly receive. The masking of winning bidders therefore, serves no other purpose than to simply further obscure matters.

eBay’s classic shill bidders’ tool: the “private” auction

This is another outrageous, devious, eBay device: the seller-selected “User ID kept private”; what I describe as eBay’s “classic shill bidders’ tool”. If ever a device shouted “I am a cheat, and if you bid on this auction I am going to cheat you”, this is it—and eBay knows it.

Now that bidders on all auctions are anonymous, what possible purpose can be served by eBay retaining this devious device—other than to continue to enable unscrupulous sellers to completely obscure their shill bidding? And, if ever there was a totally useless “Bid History” page, this is it (see Fig 13).

Even sans the “private” auction, who then would want to go to the trouble of looking up a seller’s feedback to try to identify a buyer of a particular item? And then, even if you found the buyer, you still have only an anonymous (albeit unique) user ID and a vague geographic location; you still don’t know who the buyer actually is; you could, of course, then send them a message through the eBay messaging system, and ask them who they are, but why would anyone bother?

If a buyer is so concerned about their privacy maybe they could choose to have “private” feedback (if that is indeed the purpose of choosing to have private feedback). When the seller chooses such “privacy”, I say, buyer beware, on the balance of probability, if you bid on such an auction you are going to be “taken to the cleaners”.

Surely, only the most naïve of buyers would “nibble” bid on such an auction; then, such naïve buyers are probably the ones who are the least likely to notice that they may be being shilled, regardless. If the eBay forums are any indication, some don’t even know what “shill” bidding is, let alone that it appears to occur much more often than eBay is prepared to acknowledge.

The only purpose that was ever served by eBay’s introduction of “private” auctions was the aiding and abetting of unscrupulous sellers to hide their shill bidding activity, and I have no doubt that this device has always been given a great deal more use by shill-bidding sellers than by any seller genuinely concerned about the “privacy” of the buyer.

You may also notice that that when a “private” auction ends, if there happens to have been no bids thereon, the fact that it was a “private” auction is no longer publicized.

You may also notice that, invariably, such “private” auctions that attract any interest will invariably have many more bids thereon than a “standard” auction. Now, I wonder why?

You have to ask the question, can the people running eBay all be so incompetent, negligent, or simply stupid? Surely, those at the top cannot all be so handicapped, and therefore the reason for the creation of such a devious device has to be simply disingenuousness and unscrupulousness.

Fig 13: Private auction “Bid History” page

Verification of users

There is, as a matter of course, no verification of users on eBay; any verification that there is, is of a secondary nature. That is, a “seller” may at least have to supply details of a bank account or credit card from which eBay will draw its fees (likewise to open a PayPal account). Whereas, an unscrupulous seller, never intending to actually buy or pay for any items bid upon with his shilling ID(s), pays no eBay fees and has no need for a PayPal account, and will therefore, apparently, never be “verified” in any way, and can therefore have as many “bidding” IDs as he may have email addresses.

Shills can develop a bid history by simply bidding early on every 99c item that they come across (even it they won one, no seller actually wants to sell a 99c item at that price; too much unpaid effort involved in dispatching same).

Conspiring users can even develop a feedback count by “buying” 99c items from each other, but no money actually changes hands so not even a secondary eBay “verification” results therefrom. Some are even blatant enough to advertise for such feedback on the internet, see
http://www.getafreelancer.com/projects/marhber_458813.html

Buyers should therefore be particularly careful when bidding against any bidder with zero or very low feedback as this could be an indication that the bidder is a shill.

Does anyone think it is ever likely that eBay would consider showing whether or not a bidder had been “verified,” by at least such a signing up for PayPal? I doubt such a move would be contemplated as it would not immediately improve eBay’s bottom line.

Defending against the shill bidder

The point then is not simply that a bidder should “bid only what he is prepared to pay” but that they should never lodge a maximum value “proxy” bid early on in the auction, and only bid a maximum bid at the latest practicable moment, for to do otherwise can be an invitation to indeed pay the maximum that the bidder has indicated that he is prepared to pay. Of course, “sniping” defeats the concept of the open bidding process that one expects at an “auction” and turns it into a type of closed tender process.

Buyers should always look at all the Bid History pages for any auction in which they are interested and also, at least, the primary Bid History pages for other auctions from the same seller, particularly the nominal-start auctions: watch for the appearance of any common bidders that could indicate that shill bidding may be occurring.

Programmatic detection of shill bidding

For anyone that is interested, there is a brief discussion on “Using Data Mining to Detect Fraud in Auctions” at http://www.tgc.com/dsstar/00/0627/101834.html, vis:

Another interesting (old) article on shill bidding, quoting Dr Jarrod Trevathan, can be found on the ABC Science website, at:
http://www.abc.net.au/science/articles/2005/10/05/1467138.htm
This article is dated October 2005, and gives some indication of the attitude of the online “auctioneers” to this problem (being somewhat akin to the old Monty Python “dead parrot” skit); in particular the attitude of the major player, eBay, who has apparently consistently ignored Dr Trevathan’s advances.

I have corresponded with Dr Jarrod Trevathan from the Discipline of IT, School of Business, James Cook University, Queensland, Australia who, with Wayne Read, claims to have developed algorithms that would proactively help to detect and control such shill bidding, and I quote Trevathan:

If anyone is interested, papers on these shill detecting algorithms by Trevathan and Read, appear at:
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.61.7728
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.61.7072.

Clearly, this is the course that a principled organisation would be taking to detect and control the scourge of shill bidding, and it is a sad reflection on the ethics of eBay that they appear totally disinterested in doing so.

Non Sequitur by Wiley

Indeed, it appears that eBay is not prepared to acknowledge that shill bidding is a problem at all, I presume because to do so, and to then allocate resources to the task of doing something effective about it, may detrimentally affect their “bottom line”. Why else is any mention of specific cases of obvious shill bidding usually removed so quickly from the eBay forums? Yes, I know, “privacy”. Even general discussions of shill bidding that expose eBay’s disingenuousness in this matter are usually removed. The fact is, with the introduction of “hidden bidders,” sophisticated shills now have sufficient “privacy” to practice their craft with very little fear of detection.

In eBay’s “phony” war on shill bidding, eBay regularly reminds us that they have access to much more information (ie, registrant information such as users’ unique static IDs, email addresses, IP addresses, credit card / bank account numbers, etc) than the genuine bidder can ever have access to. Indeed, eBay does have all the records necessary to detect with some certainty all but the most sophisticated examples of such criminal activity; yet it can be demonstrated that eBay chooses to do nothing proactively, and will only act after a user, on the basis of the much more limited information available to them, reports a suspicious pattern of bidding.

If you have ever reported any suspicious bidding activity, you may recall that, if eBay cannot confirm to their satisfaction that anything untoward has taken place, they will advise you of that finding; however if the activity is such that even eBay cannot overlook it, then they may get the “feather” out and take some action—who knows what—but they will not tell you anything! Why is that so? Because they don’t want to actually admit that shill bidding is taking place. This is effectively the concealing of a crime after the fact, surely, a crime in itself.

On a seller-elected “private” auction (ie, “User ID kept private”), there is no way to ascertain if you are bidding against a “fly on the wall” as eBay supplies no information from which a genuine bidder could make such a judgment. Suffice to say that you may notice that a “private” auction will usually have a far higher number than usual of bids thereon which, on the balance of probability, indicates that someone is most probably being defrauded—and eBay knows it!

Clearly, these auction examples demonstrate that eBay does not have any “sophisticated” tools for the detection and control of shill bidding; it would appear that their only “tool” is some primitive post-auction data matching of records between seller and bidder(s), and then only if a user reports the matter. If there is no report, or no matching data, and there won’t be if the shill is at all smart, then there is no problem—for eBay …

And then, even when there is matching data, blatant offenders are given multiple thrashings with the feather (“because people are basically honest …”) before any serious, albeit temporary, sanction is applied. I suspect that the people behind an “ID” are truly banned only when there is media coverage of such criminal activity—and it is criminal activity.

I could even accept that eBay has no idea of how much shill bidding goes on. How would they know? Demonstrably, they have no proactive nor sophisticated tools to evaluate the problem. And why would they care anyway: successful shill bidding increases their final value fee (that is, when stuff sells these days), and unless a user reports suspicious bidding activity, it’s no problem for eBay—indeed, it’s an asset!

A comment on the structure of the “Bid History” pages

Because of the anonymity of the information on bidders’ Bid History “Details” pages and, particularly, the “rolling” nature of a bidder’s 30-Day Summary and Bid History list—the anonymous seller aliases (ie, “Seller 1, 2, 3, …”) change on a daily basis as the information “rolls over” the 30-day summary period—this information can be of dubious value: there is no way of knowing even if any of the auctions in the list are still current or have ended; only, apparently, that a bidder is/was winning an auction (the green numerals) at some stage in the past 30 days; what purpose does that serve if you don’t know if the auction is current or not? And of what value is the “Last Bid” time, again, when you don’t know if the auction is current or not? And how are we supposed to know which of the anonymously listed sellers is the seller in the particular auction? Or is that simply another deliberate hurdle placed in the path of genuine bidders trying to protect themselves? And what purpose does such anonymity of the sellers serve anyway—other than to obscure matters?

Bear in mind that, alone, a high percentage of “Bid activity (%) with this seller” may or may not be an indicator of shill bidding: 100% of bid activity on only one auction with this seller, may not be significant; 100% of a total of 190 bids (on 41 auctions) with one seller only is obviously very significant. Certainly, as the number of auctions of the seller that a bidder is bidding on increases, regardless of the number of bids on each auction, the probability that it could be shill bidding increases.

I wonder why it is then that eBay does not also supply that simple statistic (ie, “Items bid on with this seller”), nor why it is that they do not directly identify the seller in the “30 Day Bid History” list (you have to try and figure that out yourself)? Could I be so cynical as to suggest that the information is supplied in such a clumsy format deliberately so as to make it as difficult as possible for genuine bidders to work it all out?

Bear in mind also that it is usually not possible to identify a shill with any great degree of certainty; it can usually only be “proved” on the “balance of probability”: that’s good enough for the civil courts. However, having said that, in some instances the shill bidding is so blatant that not only it can be proved “beyond reasonable doubt” but “beyond any doubt,” as is the case with the auctions 1, 2 and 4, the subjects of this study.

Unfortunately, the sophisticated shill can very easily work around this 30-day cycle (see Fig 7, above) and develop appropriate bid histories for his shill IDs under such a scheme. Completed auction data is available online for 90 days and, clearly, these Bid History Details summaries should cover, at least, that same 90-day period, but eBay supplies only a 30-day summary. I wonder why? Regardless, the Bid History “list” contains a maximum of only 30 items.

All bidders are now completely anonymous so that it is impossible to check a bidder’s feedback for any historical indications of untoward activity with a particular seller. We are now limited solely to the information supplied on the Bid History Details page—a retrograde step if ever there was one.

All in all, these Bid History pages are a shambles that, in my humble opinion, could only have been designed by either a disingenuous or thoughtless person. If they were not deliberately designed to obfuscate the issue, that certainly is the effect.

Frankly, I think that these Bid History Details pages, as they are currently presented, can be ambiguous in the extreme, can, at a glance, too easily give a false impression that a genuine bidder is a shill, and they are undoubtedly doing more damage to eBay, in the eyes of buyers, that even eBay deserves. (Well, maybe they deserve it anyway, for their total disregard for their consumers.)

Now, if eBay had actually intended that this information be of any real value in making it easier for buyers to notice at least the suspicious patterns of bidding of the naïve shill bidders, instead of burying this information on multiple pages, deep where many won’t see it, they could have, just as easily, also included the most material of this bidder information on the primary “Bid History” page (see Fig 14); and some of that same material information for the current high bidder could have also been included on the primary Item View page to aid in exposing a shill bidder who has surreptitiously set a “reserve” (see Auction 4 above).

Fig 14: What the primary “Bid History” page could have contained

Fig 15: What the primary “Bid History” page should contain

Just about anybody can learn to query a database and produce such, mostly unattractively laid out, “reports” such as those of which most of eBay’s pages comprise. A truly sophisticated algorithm for the analysing of bidder activity is all together another matter. Clearly, eBay’s database programmers do not have such ability, nor is eBay apparently interested in even talking to anyone who has such an ability, because, as eBay regularly disingenuously reminds us, there is no problem with shill bidding on eBay …

But, as I have previously stated, the facts suggest that “hidden bidders” was most likely introduced primarily to indeed obscure all but the most embarrassingly blatant shill bidding, because that is the only shill bidding, when detected and reported, that one gets the impression that eBay will do anything, even nominally, about. Shill bidding that goes undetected simply increases eBay’s FVF.

So, I would not hold my breath waiting for anything logical to emerge. eBay management is presently busy trying to figure out how they can get the next quarterly financials to give the appearance that eBay is actually making progress when, of course, most regular eBay users know the very opposite is now the case, and anything that could, however slightly, reduce their Final Value Fees is going to get very short shift …

In conclusion

The most outrageous aspect of this situation then is that eBay’s has ever had a disingenuous attitude to the crime of shill bidding, and eBay has either deliberately and unscrupulously (or stupidly) exacerbated the situation with the introduction of “hidden bidders”, undoubtedly with the misguided idea that the further obscuring of such activity will enable them to continue to avoid having to do anything about it. Undoubtedly this action will hurt both the honest sellers and eBay itself in the long term.

eBay’s management, apparently, is intellectually incapable of understanding that eBay’ principal asset is its sellers and the buyers who want to buy from those sellers. That Donahoe is naive enough to think that he can turn this well-established formula upside down and actually grow this business indicates that this man is a fool, and a particularly arrogant one to boot.

Then, eBay is still making a lot of money, very easily, too easily, apparently, to be worried about their de facto facilitating, and subsequent deliberate concealing, of such fraud on their users. But, the financial accounts of this public company are now indicating that the chickens are starting to come home to roost, and the indications are that it is not simply the economic situation but the poor decision making of these unscrupulous and/or incompetent executives that is tipping this once-greater company down the toilet. Of course, the eBay shareholders have every right to allow this downward spiral to continue but, in the meantime, eBay should not be knowingly aiding and abetting nor concealing the defrauding of its buying consumers.

The Australian Competition & Consumer Commission (ACCC), assuming that they actually read and understood the gist of my earlier submission to them on “hidden bidders” [link thereto], has expressed the opinion [link thereto] that the eBay auction operating structure is “sufficiently transparent” and therefore not something that they are prepared to do anything about. Obviously, they have a peculiar idea of what the word “transparent” means. So much for the protection of consumers from unscrupulous traders and their facilitators. And what about all the other consumer protection agencies throughout the rest of the world? Are they doing anything? Apparently not.

Regrettably, in the final analysis, when you peel away all the eBay “spin”, eBay is exposed as a greedy, most unscrupulous, disingenuous and unprincipled organisation that is quite prepared to do absolutely anything (or nothing) to protect its “bottom line”, and is quite happy to “aid and abet” unscrupulous shill-bidding sellers to defraud consumers, because they are not prepared to waste any of their valuable resources to do otherwise. eBay simply has no incentive to remove fraudsters from their “bulletin board” because these fraudsters contribute to eBay’s revenues, and if users don’t notice any such untoward activity, then eBay does nothing. Quite unconscionable!

For people buying on eBay, eBay is definitely no longer “a safe and fun place to trade.” Not that it ever actually was that, but it’s simply much less safe now.

In constantly editing/adding to this post I have reached the maximum size allowed for an individual post (61k bytes?); please see the “Postscript” continuation below.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

Tradguy · Joined: 15 Sep 2002 Posts: 524 Location: Florida

Just because you give it a nice header and date it doesn't make it "new".

Just another pointless whine.

richr · Joined: 31 Mar 2009 Posts: 1

I hear where you're coming from; I don't like spending more money than I have to (otherwise, why would I bother to buy on eBay?). But, as long as the shill bidder is unable to retract his last bid, I can understand if eBay doesn't see it as a problem worth pursuing. It's pretty much a victimless "crime."

First of all, no one is being forced to part with money unwillingly. The shill bidder does not cause the honest bidders to bid more than they're willing to bid; the honest bidders never lose total control of their own bids.

Secondly, as we all know, higher bids mean more money for eBay. Therefore, eBay obviously stands to profit when shill bidding happens. Sure, honest bidders tend to despise the idea that someone is 'running up' their bids; so, eBay has to weigh that against their increased profits and decide how much shill bidding they can stand before it starts to hurt their income.

Whenever I've seen shill bidding (maybe twice in 10 years), I've reported it. But, I'm not losing any sleep over it, even if I'm the "victim." I mean, there are shill bidders at live auctions, and I have no problem with that. Whether it's live or it's eBay, no one is forced to part with money they weren't willing to spend.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

What a happy person you are Tradguy. You appear totally incapable of making an intelligent, constructive contribution to any debate. If you are not then simply an eBay stooge, why then do you bother following such debates?

Of course, Tradguy is correct in one respect, that this story is not "news", after all, most experienced eBayers know that eBay has forever been knowingly "aiding and abetting" unscrupulous sellers to cheat buyers.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

Tradguy · Joined: 15 Sep 2002 Posts: 524 Location: Florida

Wow philip, talk about calling the kettle black.

It's you that's obsessed with this singular issue. Why not just shop somewhere else?

How hollow your life must be that you would be so miserable using Ebay - but yet cannot seem to stop yourself from your pathetic compulsion to shop there.

Maybe you don't shop there at all, but spend all day cross referencing listings looking for more "shills".

Philip, I don't work for Ebay. I am a professional seller, and Ebay is a site that I have used for my business for over 10 years.

I come to Auctionbytes because Ina provides excellent coverage of what's going on in the auction world.

I read this forum for interested NEWS about my business - not to read another self absorbed monotonous ramblings of the great Philip Cohen.

and BTW...your message is off-topic and should be removed from this forum, as should my own.

(don't feed the troll...don't feed the troll....damn...I lost control and fed the horrid creature....)

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Tradguy'

Of course you are a professional seller! That explains it all. Is there any other meaningful information in your post?

If you don't like my "rants" then you could simply stop watching my threads.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Hi richr,

Thanks for the “considered” response. All your comments are valid, particularly in respect to what some refer to as “real” auctions, where attendees should know that they have to be very careful, and I have attempted to comment on those circumstances, and what I believe eBay should be, elsewhere on this forum.

The big difference between “real” auctions and eBay is that probably the majority of people attending a “real” auction for goods and chattels will be dealers who know how the system works in reality; whereas most of the “buyers” on eBay, at least initially, are going to be less knowledgeable of the fact that auctions can be not what they are supposed to be: they will have a, misguided in my opinion, notion that eBay is running an auction system based upon fairness to both buyer and seller.

At a “real” auction you have absolutely no way of knowing if an auctioneer is taking shill bids from some winged insect crawling up the wall (and indeed I believe it is standard practice at goods and chattels auctions). eBay on the other hand has all the “black and white” records necessary to ensure, to a high degree, that the seller does not take an unfair advantage over the bidders—if they chose to do so, that is. Unfortunately, eBay chooses to do nothing pro-active about shill bidding and indeed they appear to be working hard to obscure all but the most blatant and naïve examples thereof.

What possible purpose can eBay have for periodically (monthly/quarterly?) changing these new masked bidding aliases?

I don't claim to be an expert on the workings of eBay: they are changing stuff too often for me to keep up, and my criticisms can only be based upon my limited experience as predominantly a buyer.

However, on the matter of retracting bids, my understanding is that by mutual consent a bidder (the shill) and the seller can agree to cancel the shill's highest bid and leave another as the highest bidder, that is, after they have established what the other bidder’s proxy bid maximum is. After all, there is not much point in retracting a bid that is not the highest bid. Maybe someone else can confirm or disprove this situation? (Tradguy maybe?)

I use an auction processing database to keep a permanent record of items that interest me even if I don’t bid on them; in the past two years I have detected at least four definite attempts to shill bid me and two others that were very suspect. Also, shill-bidding sellers are usually a bit smarter than that quoted in the above OP.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

I received this response to the above post by “richr”, by direct email, from a person not registered to post on this forum, and I quote:

What do you think about that argument by “richr” that nobody is being forced to part with money unwillingly?

Firstly, the whole point of going to an auction is to try and obtain an item for a bargain. Yes it is true that you go there with a valuation in mind for the maximum you are willing to pay. However, what you are willing to pay and what you should only have to pay are two separate things. The price should be determined by competition amongst buyers without dishonest input from the seller.

As for the second argument that bidders despise having their bids run up—that is the whole point! The bid is being run up through misrepresentation and in a fraudulent manner. By strictly interpreting the law, this is illegal. You cannot assume another identity and engage in such business. You cannot collude with other sellers/individuals to keep the price high.

So let’s rewrite richr’s argument this way—having to pay more than you should as a result of misrepresentation on the seller’s behalf ...

Hmmm—doesn’t quite seem the same now does it?

If you find out afterwards that you’ve been shilled, well then definitely you have parted with the money unwillingly. You have been conned.

It is far from a victimless crime. If it was victimless, then why would eBay have a policy (albeit spin) about not shilling in their auctions? Why did the US prosecute and jail people for shill bidding in 1999?

If shill bidding is victimless, does the same apply to insider trading on the share market? If not, why not? Aren’t these activities both designed to influence a market in an unfair manner that is inconsistent with the rules of supply and demand? ASIC prosecutes and jails inside traders. Why not shills as well?

So if there is no harm in artificially inflating the price through shill bids, why doesn’t everybody do it?—Because it would result in the collapse of auctioning as an exchange mechanism through lack of confidence in the auctioning process.

While we are shill bidding, why not just auction a misrepresented item as well? Caveat emptor—there’s no harm in that if the buyer didn’t do his/her research?

At the end of the day, buyers want to buy an item from an honest seller for a fair price. The buyer wants the item to be legitimate and meet his/her expectation regarding what the seller advertised it as. The seller wants the buyer to be happy, pay promptly and return for repeat business. The auctioneer has a reputation to uphold and wants all transactions to proceed in a harmonious manner. Government and society want auctions to function in a manner that benefits society.

Richr should ask himself this—would you do repeat business with a company that continually rips you off by having a so-called competing buyer come in to force you into paying more than you have to? No. The company has lied to you. It is common sense (and in fact the only way to survive) in the business place to obtain your goods and services for the cheapest price possible, and only do business with other reputable companies (not ones that openly lie and manipulate you).
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

kjp55 · Joined: 18 Aug 2001 Posts: 1973 Location: East of Rockies

This is like one of those bad car wrecks you come upon on the highway. You want to turn your head and drive on but you just can't help looking.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Shill Bid Retraction on eBay

1 June 2009

The following is a summary of the so called “limited” circumstances under which a genuine bidder may retract a bid on an eBay auction. Conversely, you will see how much easier it is for a shill bidder, in collusion with the seller, to withdraw a strategic bid.
(See http://pages.ebay.co.uk/help/buy/questions/retract-bid.html)

Timing Matters

Up to twelve hours before the end of the listing:

During the last twelve hours of the listing:

Any examination of the above will expose how easy it is for an unscrupulous seller and his shill to manipulate this system: the shill only has to “ask” his shill-master if he may withdraw his winning bid. The only aspect of all this that would be on any concern to eBay is a mutual withdrawal from a sale after the auction has ended, putting at risk their “final value” fee.

http://cyberlaw.stanford.edu/packets001732.shtml

A good site that explains how to spot all the various forms of “shill” bidding is at http://www.ukauctionhelp.co.uk/shill.php

Conversely, there is the opposite form of bid manipulation where two scam bidders collude to defraud a seller. This scam is very well explained at http://www.fool.com/news/2001/ebay010502.htm , as is eBay’s pathetic response. Needless to say, nearly a decade later, eBay has done nothing to protect sellers from such fraud.

Summary: eBay designed the structure of this auction system; they are making the process more and more opaque as time goes by; they do absolutely nothing proactively about any of these bidding abuses; they can tell users what to do every step of the way; but apparently they have no responsibility at all for any of these frauds being perpetuated on users. Is it any wonder then that more and more of eBay’s users are now flushing this unprincipled, unscrupulous, disingenuous organisation down the toilet.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Continuation of the Original Post

Postscript

18 July 2009; last revised 11 August 2009

As a matter of interest, at the end of June, a journalist that I have communicated with put the matter of the two principal auctions that are the subject of this case study to eBay and they did reply to him—deceptively though, of course. The resulting story by Cade Metz appeared in The Register on 10 July 2009.

(A similar article was published in the Sydney Morning Herald and The Melbourne Age, the two broadsheet newspapers of record in the two major cities in Australia, on 14 July. Note the response from eBay: “This person has found a couple of isolated incidents ... there’s over 100 million listings on eBay at any one time, so there’s bound to be a handful that are problematic, but in the scheme of things it’s very, very small.” Then, what else could we expect them to say? And that response is deceptive because those found cases come from amongst the “hundreds” of items that I have watched, not the 100 million, and if you extrapolate my “couple” of cases out of “some hundreds” across that 100 million, …)

And that’s what I call being “thrashed with a feather”.

And, I say responded “deceptively” because, whereas eBay states that they cancelled all the seller’s active auctions on 29 March, that could not be the case because, as you can see from the seller’s relevant feedback page, at [link thereto], that the buyer (“morganmasson”) did not lodge his two favorable feedbacks for the seller until the 2nd and 3rd of April respectively and further that, although all the items on this page (except for one) and on the next page, up to feedback left on 11 May, have indeed now been “removed”, you will notice that all the items have had feedback left for the seller by various buyers, so that it would appear that they have been only nominally “removed” long after the sales were completed: clearly they have “backdated” the removals, possibly for the benefit of the enquiring journalist.

“Oh, what a tangled web we weave, when we practice to deceive”.

And, I wonder if John Donahoe has yet learnt the lesson that we “stupid” people, in large enough groups, do have some power?

Snake by Sols

You will notice also that other than that some items have been “removed” (which anyone unaware of the situation would never notice, and even if they did, they would simply wonder why so) there is no indication that anything untoward has been going on. There is no record of the crime.

And, when eBay is finally forced to de-register a seller for repeated shill bidding, eBay will also “remove” all that seller’s auctions—even all the finished auctions. Now, why would they bother to also remove the auctions that are finished—if not simply to conceal the evidence of any such criminal activity?

Which brings us to the matter of the $309.50 that eBay, in effect, then acknowledges that this buyer was defrauded of by this unscrupulous seller. The facts I present in this case study clearly demonstrate that not only does eBay’s “clunky” system effectively facilitate the criminal activity of shill bidding but that eBay will deliberately conceal such activity after the fact: if a user reports suspicious activity and eBay, in their view, finds no “proof”, they will tell you so; otherwise, you will hear nothing from them; the victim of the fraud will get no acknowledgement from eBay that he has indeed been shilled, nor the opportunity to recover the money of which eBay then knows that he has been defrauded.

Does eBay have any mechanism for the recovery of such ill-gotten gains? Apparently not. And that would be because there is no financial advantage to eBay to have such a mechanism. Such a mechanism would be redundant anyway because eBay will never acknowledge to a complainant that any shill bidding has actually taken place.

Not only does eBay not have a mechanism to assist a buyer to recover any monies of which eBay may then know the buyer has been defrauded, they will, if asked to assist, refuse to do so, disingenuously quoting the US Data Protection Act (a law intended to protect a person's identity from being abused), an excuse that in such circumstances, I understand, is simply spurious. eBay’s action in refusing to assist in such circumstances is, in effect, the concealing by eBay of a crime after the fact.

And does eBay report such crime to the police? I doubt it. And, if not, that is, in effect, (again) the concealing of the commission of a crime after the fact. Of course, the police have got more serious crime to worry about, which brings us back to the fact that eBay offers consumers of the world a service from which eBay makes a great deal of money. Is there then no obligation for eBay to deal fairly with its consumers? The simple fact is eBay’s “clunky” system facilitates the crime of shill bidding and, more pointedly, if such activity is reported to them, they will conceal that crime after the fact. I though there were laws proscribing such outrageous behaviour.

Frankly, I suspect that this form of fraud is so prevalent that there is little the authorities could do about it: if action was taken against all the petty offenders, it would literally clog up the court system. Historically, the answer to such administrative problems has been the development and application of “on-the-spot” monetary penalties when such “petty” infringements of the law are prima facie; maybe that could also be the answer for this new online problem.

Regardless, having eBay as the sole arbiter of such matters is the equivalent of having the fox in charge of the hen house. If ever there was an enterprise that cried out for an independent ombudsman to protect consumers, both buyers and sellers, this is it. But, boy, would that person be ever busy.

Unfortunately, the reality is that the people in control of eBay are a most unscrupulous, disingenuous mob. Then, unlike at Amazon, the boys at the top of eBay have got to do something to try to recover those “mislaid” performance bonuses. Of course they could simply emulate the CitiCorp mob and find the audacity to ask for an increase in salary to compensate for the lost bonuses (apparently, these days, “performance” bonuses don’t actually have anything to do with performance).

Is it really any wonder then that many eBay buyers, too, are flushing eBay down the toilet?

Non Sequitur by Wiley

If you found this comment on eBay of interest, then you may also find of interest some of my other postings [link to index thereto] critical of eBay. I apologise, in advance, for the unkind nature of my comments about eBay, but they are so deserving of such criticisms, and I simply cannot help myself—and it’s fun. I can only present the facts and then draw some conclusions therefrom; others may well draw different conclusions from the same facts. As it has ever been, and particularly so with an eBay auction, Caveat Emptor.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

eBay’s responses to the media reports

18 July 2009; revised 3 August 2009

Following are the paragraphs from the media reports that contain eBay’s responses to the above-posted case study of shill bidding on eBay, as those comments appear in the reports (with my further comments thereon).

“The Register” article, published 10 July 2009, at http://www.theregister.co.uk/2009/07/10/ebay_and_shill_bidding/

Pure spin. None of these “back-end ‘algorithms’”, if they exist at all, are proactive, nor sophisticated, otherwise we would not now be having this debate. (Actually, I would not be surprised if Mr Bourke thought that an “algorithm” was some sort of Latin American dance.) “One strike and you’re out”? Another outright untruth—they can’t even get their stories straight.

The fact is, if eBay had any, even marginally effective, system in place to proactively detect shill bidding the blatant examples quoted in the OP would have been detected. Then, “… it’s not something we tolerate.” More “tobacco company-speak”: the exact opposite is the case; shill bidding is only “not tolerated” when it is so embarrassingly blatant that genuine bidders can notice it. And, again, that is the point, if no one notices and reports it, there is no problem—for eBay.

For me, it’s as clear as the nose on your face: no further debate is necessary. This is a most greedy, unprincipled, unethical, unscrupulous, disingenuous organisation.

More spin. They don’t disclose, because they can’t disclose, because these “algorithms” that they claim to have clearly do not exist. Once again, if eBay had any effective system for the proactive detection and control of shill bidding we would not now be having this debate. And, the whole concept a truly sophisticated algorithm for the detection of shill bidding is that it cannot be “circumvented” unless the shill behaves like a normal bidder which, of course, is simply impossible for an habitual shill to do.

Spin, spin, spin; or dare we simply call it for what it is: outright lies.

Actually, the seller’s feedback clearly indicates that eBay backdated the “removals”, so their whole action was nominal only—a total sham.

Ah, that “feather” treatment again (Oh, stop it please, it tickles!). Whatever happened to the “One strike and you’re out.”?

The “Sydney Morning Herald” article, published 14 July 2009, at http://www.smh.com.au/technology/biz-tech/phoney-bidding-rampant-on-ebay-20090714-djsr.html

Yes, we’ve heard that disingenuous reason before; it’s no more convincing now than it ever was.

“Becoming less of a problem”. But, but, but, we are supposed to believe that it is no problem. As far as fixed-price listings are concerned I suspect that eBay is currently making more money out of the listing fee than the FVF. And, when the last auction has been run, will someone please remember to turn off the lights.

More “tobacco company-speak”. Of course, it means just the opposite: that we don’t have any “proactive” system for the detection of shill bidding, let alone a “sophisticated” system. The only system eBay has for the detection of shill bidding is “reactive” and operates, reluctantly, after one of those annoying users reports some suspicious bidding activity and, even then, if eBay does find evidence of shill bidding, they won’t so advise the victim. That is effectively an “aiding and abetting” of a criminal fraud after the fact: the concealing of a criminal act, surely a crime in itself.

No wonder they can’t make a logical decision about anything, all that spinning has them in a constant state of giddiness. The “couple of isolated incidents” of shill bidding (and many others, maybe not so blatant, that I have documented) are not from eBay’s 100 million listings but from only the “hundreds” that I have watched; extrapolate that “handful” over the 100 million and see what you get. …

The “St George Leader” article, published 21 July 2009, at
http://www.theleader.com.au/news/local/news/general/bid-to-stamp-out-fakes-during-online-auctions/1572834.aspx

I think that I have clearly demonstrated that eBay has no “active” measures in place to detect shill bidding. And, 2000 “trust and safety staff”! If they are not employed all day fielding reports of shill bidding, then what are all these “trust and safety” people doing? I suspect then that it be only the “trust and safety” of eBay that they may be looking out for.

Once again, the “handful of incidents” detected don’t come from the 100 million listings, but from only the “hundreds” of listings that I have watched.

And that is what Mr Feiler would like us to believe: that there simply is no problem with shill bidding on eBay. Now, which is it then: there is shill bidding, but eBay’s 2000 “trust and safety staff” or that “sophisticated, proactive” system detects it and therefore it is no problem? Or would Mr Feiler have us believe that there truly is so little shill bidding on eBay that it is an insignificant problem, in which case what are those 2000 “trust and safety staff” doing? They may well be fielding reports of shill bidding after the event—they certainly aren’t doing anything “proactive” about it during the course of an auction.

“Oh what a tangled web we weave when we practice to deceive.”

Still, eBay still has a world-wide monopoly on this form of commerce. Why would any sane person want to kill this “golden goose”? Many of us understand how “clunky” is the eBay auction system; so clunky that I suspect that no one at eBay knows where to start to try to fix it, and undoubtedly that could be the reason behind the suggestion that eBay is attempting to move away from auctions. And that is a shame because the problem unique to the auction platform—shill bidding—could be solved by the application of a truly sophisticated, proactive system to detect and control such activity. After all, all the other annoying “problems” inherent in the eBay platform apply equally to fixed-price sales.

I don’t (usually) bother reporting the cases of possible/probable shill bidding that I notice—not even the blatantly obvious ones. It’s not my job to do eBay’s job for them, and their response (or lack thereof: an indication that it is shill bidding) is usually disingenuous anyway. But, as could anyone else who makes the effort to examine the sometimes multitudinous Bid History Details pages of bidders on an auction from a “professional” seller, I could supply many other good examples that I have documented.

The facts indicate that eBay is only concerned about the shill bidding that the eBay buyer notices; that which goes unnoticed simply increases their FVF. (Even the presentation of the Bid History information, that is supposed to aid bidders, has either been designed by an idiot child or purposefully to make it as difficult as possible for the genuine bidder to analyse such information.)

The question remains, in the meantime, before eBay does eventually does go the way of the “kafula” bird, will we ever be able to shame this greedy, unethical, unscrupulous, disingenuous, stupid organisation into providing the auction security for buyers that it claims to provide but that it demonstrably does not provide?
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

The ultimate sequel to the case study of shill bidding on eBay

18 July 2009

Seller: salguerosartsngifts

This is the same seller whose two earlier auctions were the principal subjects of my case study of shill bidding on eBay. The below list of the most recent past auctions has been sourced, on 16 July, from the seller’s feedback list for the then past 90 days. Two bidding IDs, “_***9” (already mentioned in my case study) and “o***0” are undoubtedly shills; “o***t” possibly also. (“_***9” actually won one of the auctions and had received feedback from the seller so we are able to identify him as “gman78_2009”.)

http://feedback.ebay.com.au/ws/eBayISAPI.dll?ViewFeedback2&userid=salguerosartsngifts&&sspagename=VIP:feedback:4:au&ftab=FeedbackAsSeller

This is the seller whom eBay says they have warned, cancelled all current auctions, and put on fixed price listings for 14 days. …

All the “Bid History” pages containing shills have been “printed” to PDF for future reference. The Bid History “Details” pages for the individual bidders contain “rolling” 30-Day Summaries and therefore those summaries may become less meaningful the later it is that these pages are accessed after the auction has ended: they are dynamic records and represent the status at the moment they are viewed online. The feedback counts (in parentheses) may also increment over time.

Does anyone really need any more evidence that eBay cares not one iota about shill bidding—unless a user, inconveniently, reports same, and that—contrary to their claims—they do not have any “proactive” system for the detection thereof, nor that any system that they do have is at all “sophisticated.” (They clearly have a different understanding of the meanings of the words “proactive” and “sophisticated” from that found in any dictionary.)

It really is outrageous that consumers each have to do all this manual work to protect themselves from this most greedy, devious, unscrupulous, disingenuous and stupid entity—eBay that is. And it is a further outrage that, with respect to this unscrupulous and criminal behaviour by eBay, we cannot seem to get any action from governmental consumer affairs regulators anywhere. What is it about eBay that so paralyses regulators? Is it their contribution to GNP? They are, after all, little more than another “tobacco” company—with a similar standard of ethics.

Another Postscript

As of 18 July, seller “salguerosartsngifts” is “no longer a registered user”, that is, unfortunately, someone has probably reported them (again) for shill bidding and eBay has finally deregistered that seller’s user ID.

Of course, eBay has also removed all signs of this seller’s auctions (including the below-listed past auctions) from their system. A devious little lot aren’t they? And, surely, could not such action also be considered to be the concealing of a crime(s)—for what other purpose does such action serve?

But they aren't smart enough to erase the feedback information too, and anyway, in anticipation of such action by eBay, I have already “printed” PDFs of all those shilled auctions that were there prior to the 17th.

However, the shill that could be indentified (from his “win”), “gman78_2009” (“_***9”), is still a registered user, although his feedback count has decremented from “4” to “3” and one of the two auctions of “salguerosartsngifts” that he had “won” has disappeared from his feedback history. Now I wonder how that could have come about?

An Appeal

If any readers have any good examples of auctions with probable shill bidding (either of shill nibbling or surreptitious reserve setting) within the current 90-day data retention period, could they please supply auction numbers and suspected shill ID to me at formset@exemail.com.au.

The list in auction number order
Auction Nr / Ended / Shill (FB)
350220766963 12-Jul-09 o***0 (1)
350220151440 Fixed Price, undated
350218775436 Fixed Price, undated
350218774375 04-Jul-09 OK
350216613954 02-Jul-09 _***9 (4)
350216609140 02-Jul-09 OK
350216605467 02-Jul-09 _***9 (4)
350214889500 28-Jun-09 _***9 (4)
350214581264 27-Jun-09 OK
350213815572 25-Jun-09 _***9 (4)
350213814468 25-Jun-09 o***0 (1)
350213223333 23-Jun-09 OK
350213223072 23-Jun-09 o***0 (1)
350211802463 19-Jun-09 _***9 (4) (The shill won!)
350211800880 19-Jun-09 OK
350210763708 16-Jun-09 _***9 (4) (See case study)
350210423231 15-Jun-09 OK?
350210422536 15-Jun-09 _***9 (4)
350210373220 15-Jun-09 OK
350210372623 15-Jun-09 OK
350210371491 15-Jun-09 OK?
350210368426 15-Jun-09 OK
350209247337 12-Jun-09 OK?
350209236782 12-Jun-09 OK
350208202669 06-Jun-09 OK
350208196643 06-Jun-09 OK
350208170728 06-Jun-09 _***9 (4) (The shill won!)
350208087003 09-Jun-09 _***9 (4)
350208081854 09-Jun-09 o***0 (1)
350208073982 06-Jun-09 OK
350208071915 06-Jun-09 OK
350208069057 06-Jun-09 OK
350208061069 06-Jun-09 OK?
350206937703 06-Jun-09 _***9 (4)
350206873528 Fixed Price, undated
350205836060 31-May-09 OK
350205833788 31-May-09 OK
350205830073 31-May-09 _***9 (4)
350204476568 28-May-09 OK
350203302983 Has been “removed” (but after feedback left)
350202312758 22-May-09 OK?
350202311408 22-May-09 o***t (3)
350202290477 22-May-09 OK
350200622057 Fixed Price, undated
350181532379 Not found (part of the “removed” penalty?)
350180753379 Not found (part of the “removed” penalty?)
350176382074 Not found (part of the “removed” penalty?)

The list in order that feedback was left
Auction Nr / Ended / Shill (FB)
350203302983 Has been “removed” (but after feedback left)
350220766963 12-Jul-09 o***0 (1)
350213223072 23-Jun-09 o***0 (1)
350216613954 02-Jul-09 _***9 (4)
350216605467 02-Jul-09 _***9 (4)
350205830073 31-May-09 _***9 (4)
350200622057 Fixed Price
350209236782 12-Jun-09 OK
350218775436 Fixed Price
350218774375 04-Jul-09 OK
350216609140 02-Jul-09 OK
350206873528 Fixed Price
350220151440 Fixed Price
350214581264 27-Jun-09 OK
350213815572 25-Jun-09 _***9 (4)
350214889500 28-Jun-09 _***9 (4)
350208061069 06-Jun-09 OK?
350213223333 23-Jun-09 OK
350210371491 15-Jun-09 OK?
350213814468 25-Jun-09 o***0 (1)
350210368426 15-Jun-09 OK
350211800880 19-Jun-09 OK
350210373220 15-Jun-09 OK
350210423231 15-Jun-09 OK?
350210422536 15-Jun-09 _***9 (4)
350209247337 12-Jun-09 OK?
350210372623 15-Jun-09 OK
350210763708 16-Jun-09 _***9 (4) (See case study)
350206937703 06-Jun-09 _***9 (4)
350208087003 09-Jun-09 _***9 (4)
350208081854 09-Jun-09 o***0 (1)
350208069057 06-Jun-09 OK
350208073982 06-Jun-09 OK
350208071915 06-Jun-09 OK
350205833788 31-May-09 OK
350208202669 06-Jun-09 OK
350205836060 31-May-09 OK
350208170728 06-Jun-09 _***9 (4) Won!
350208196643 06-Jun-09 OK
350204476568 28-May-09 OK
350202290477 22-May-09 OK
350202312758 22-May-09 OK?
350202311408 22-May-09 o***t (3)
350181532379 Not found (part of the “removed”?)
350176382074 Not found (part of the “removed”?)
350180753379 Not found (part of the “removed”?)
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

eBay: some more observations thereon

30 July 2009; revised 15 August 2009

eBay in general

I always refer to eBay users as “users”, for to refer to them as “members”, as eBay does, is to imply that the organisation is run for some benefit of those “members”—it is not! No action taken (or not taken) by eBay’s management has anything to do with benefitting or protecting eBay users (buyers or sellers): eBay’s every action (or lack thereof) is purposed solely towards (desperately, now) attempting to improve the appearance of eBay’s bottom line, by whatever means—undoubtedly more to do with attempting to salvage their performance bonuses (or, ultimately, their jobs) than with any direct consideration for stockholders—and if at any time there appears to be some benefit to eBay “users”, that will be purely coincidental.

Regardless of who pays the fees, or who is now abusing the (broken) feedback system, or the DSR fiasco, or eBay’s latest “restraint on competition” attempt: the mandating of the offering of PayPal by sellers and the banning of “paper” payments, or their failed attempt in Australia to mandate the use of PayPal exclusively, or their many other frantic, and sometimes stupid, manipulations of this auction system, the fact is neither eBay nor its sellers can flourish without the confidence of buyers, and the application generally of “hidden bidders” (particularly in the absolutely anonymous form, “Bidder x”, still suffered by users in the UK, Ireland and the Philippines, and in Australia until 3 February 2009), which serves little other purpose than to hide from view all but the most naive and blatant activity of the shill bidders that are now running rampant, is not going to improve that confidence anytime in the future.

Could it possibly be that once any business gets to the top of the ladder and achieves an effective world-wide monopoly in its field, as eBay has, the only future way is downward (like all the other empires of history). That MBA qualification of Donahoe’s may have given him some understanding of such cycles, as he appears to be doing his best to accelerate that process—towards a management buyout at the very bottom of the cycle, maybe?

As an outsider, it appears to me that every fix that is applied to every supposed problem is a “band-aid” fix aimed only at the short-term purpose of propping up the next quarter’s financial results; no consideration appears to be given to anything for the long term, ie, the underlying problems that cause all the many problems that are manifest on the surface of both eBay (eg, shill bidding, user verification) and that sellers’ nightmare known as PayPal. (Can you imagine the major credit card companies running their card businesses the way PayPal is run? Not likely.)

Users’ cannot get eBay to make even the most simple of changes that would greatly help users to use the system, and a comment on such a matter can be found at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=23984

The “notice board” analogy

Let us then, for a moment, examine eBay’s claim that it is “only a notice board provider” and therefore can have no responsibility for anything that happens as a consequence of “notices” being placed on its “notice board”.

Most notice board providers, in the historical sense of the activity, don’t charge for such a service and, regardless, I have no doubt that if and when they are shown that someone is abusing the privilege of using their notice board, they would undoubtedly ban such persons from posting on their notice board.

eBay, on the other hand, exists solely as a provider of such an introductory service—as does the “traditional” auctioneer—and all eBay’s revenues stem from the providing of that “introductory service”.

Unless my logic is seriously flawed any sale by the auction process on eBay is a sale by the auction process and therefore somewhere there has to be an “auctioneer” responsible for the fair conducting of that auction process; for eBay to claim that it is not the auctioneer with respect to these sales by auction on their “notice board” surely has to be a nonsense; to accept their argument is to imply that every eBay seller who sells by the auction process on eBay is an “auctioneer”—that is simply absurd, no less absurd than it would be to consider all the many vendors at a “traditional” goods and chattels auction to be individually “auctioneers”.

eBay, in effect, is receiving a consideration for acting as the “agent” of the seller but, as the entity responsible for the online auction mechanism, has, at the least, a moral obligation to deal fairly and honestly with the buyer. This is demonstrably not the case, and never has been the case!

No doubt eBay maintains this pretence because they are terrified of being treated statutorily as an auctioneer (there undoubtedly are some statutory responsibilities that do not suit eBay’s bottom line); but think about it, they formulate all the conditions and create all the mechanisms (“hidden bidders” being but the latest of the devious mechanisms by which sophisticated shills can operate with impunity) under which user must operate: seriously, who else but eBay can be “the auctioneer”.

The reality is that eBay is the “auctioneer” with respect to sales by the auction process on the eBay marketplace and surely therefore there are statutory obligations on such an auctioneer—with respect to record keeping and, in particular, the demonstrable abuse of the bidding process by unscrupulous vendors resulting in the defrauding of buyers—criminal activity of which eBay undoubtedly must be aware but does nothing about, and will cover up after the fact.

Exposing the proxy bid maximum

There is some risk but, in small enough increments, a naïve shill can nibble away until the automatic advance of the high bidder’s proxy bid equals less than a whole bid increment; the shill then knows that he has exposed the high bidder’s proxy maximum— and he makes no further bids.

In such circumstances the high bidder’s automatic proxy bid should be nominally indicated as having advanced one whole increment (even though it may not actually be) so that the “nibbling” shill cannot know that he has reached the high bidder’s proxy maximum until he has exceeded it and he himself has become the winner. That, unfortunately, would be too simple a solution for eBay to comprehend; it might ever so slightly reduce their revenue too—and we could not have that.

Auction Reserves

eBay Australia allows reserve prices to be set only on “Cars, Boats, Motorcycles, and Other Vehicles”.

Would someone please try to explain to me the logic behind the difference that exists in the limited availability of the Reserve Price facility in Australia to the general availability of this feature in the rest of the eBay world.

Feedback fiasco

As predominantly a buyer I had received three negative feedbacks from sellers (3/140 at the time); all were in retaliation for negative feedback that I had lodged against them after all attempts to communicate were either exhausted or the response from the seller was not satisfactory.

Unfortunately, eBay uses a totally different form of logic to me; I would have thought that, instead of stopping sellers from being able to post negative feedback if and when such feedback was truly deserved, the simple answer would have been to require sellers to lodge feedback first, as surely the transaction is satisfactory for them when they receive the purchase money (credit card purchases from Nigeria excepted), before there can be any request for a buyer to lodge feedback.

I think you can very quickly identify the potentially less scrupulous sellers as those who habitually never lodge feedback until the buyer has done so, not that that sort of detail is available to potential bidders, and maybe eBay should have considered publishing that statistic (ie, how many supposed “sales” have not had any feedback lodged for them) on the Seller’s Feedback Profile page; better still, on the primary auction page. A large enough number of “sales” sans feedback could also indicate the probability of shill bidding.

The fact is if a buyer receives goods and they are not reasonably as described the buyer is entitled to be dissatisfied, but that stage of the transaction comes after the buyer has completed their part of the transaction by making payment to the seller and the seller should be “satisfied” at that point in time and should post feedback to that effect. What subsequently happens regarding any suggested “breach of contract/warranty” regarding the description of the goods should be treated as a separate matter of warranty.

Some (sellers) seem to think that a seller is entitled express dissatisfaction with the buyer because the buyer is dissatisfied, and that it’s quite appropriate to use retaliatory negative feedback as a pay-back or a blackmail device. I doubt that is the way Wal-Mart works. The type of seller who habitually holds back on posting feedback until after the buyer has done so is more likely to be the type of seller who will not respond to communications from the buyer and so, when the buyer ultimately posts negative feedback, will retaliate with same.

Sellers should not be waiting to see whether or not the buyer is going to communicate disappointment with the goods before posting their feedback. If sellers have so little confidence in the goods/service they are offering they probably should not be trying to sell them on eBay; not as an ongoing business anyway.

I accept that it may be difficult for sellers to protect themselves from unreasonable buyers and there should be an effective mechanism to deal with that problem, but, I still think it is inexcusable for a seller to use negative feedback simply as a retaliation or as blackmail; and that has been my only experience of negative feedback.

Regardless, we do have to bear in mind that it is the unscrupulous sellers, those whom for whatever reason have received negative feedback from a buyer and have then used negative feedback in return simply as retaliation or blackmail, that have caused eBay to consider the changes which stop all sellers from lodging negative feedback.

In my case, the first of the three retaliatory negative feedbacks that I received was from a bookseller from whom I bought a book for $14 plus $8 postage; it started at $1 and another bidder and myself competed for it; when it arrived it turned out to be in such very poor condition—undisclosed in the auction description—that I would not have given a dollar for it at a car boot sale (I have since thrown it away); the seller did not respond to my two emails of complaint and so I gave him a negative feedback; he promptly retaliated in like—and that is/was a serious flaw in the feedback system.

Needless to say, when I complained to eBay about the matter they refused to do anything about it. Is it any wonder then that buyers are abandoning the ship; there is no crew left able to service the passengers.

Postage profiteering

The other two occasions that I received negative feedback in retaliation involved two $1 purchases of CDs from a seller; the seller declined to combine the postage; I paid an additional $5.99 postage for each CD which were indeed posted separately—when they arrived they were not even in CD postage packs but were simply wrapped in newsprint and inserted into ordinary manila envelopes with 90 cents postage on each; that to me is postage profiteering; if a seller wants at least $7 for a CD they should put a starting price of $7 on it.

The point is, the postage charge should be reasonable, not used as a device to make up for what a seller can’t get on the actual bidding. And, of course, such abuse is the reason that eBay now includes a specific feedback rating facility for the reasonableness or otherwise of the postage charge.

If $5.99 is quoted for “postage cost” (up the top) or for “postage and handling” (down the bottom) and there is no actual cost involved in any elaborate packaging then I want to see a postage stamp on that parcel that comes somewhere close to that quoted postage cost. If you want to make a “handling” charge, in addition to any postage charge, then the seller should clearly call it for what it is.

If a seller cannot make any money out of the goods they are selling without exploiting the “postage” charge they should stop selling on eBay and put in a tender for a post office franchise.

Dutch auctions

I refer to post #23 by eBay “pink” aucategory@ebay.com at
http://forums.ebay.com.au/topic/Recent-Ebay-News/Why-Must-We/500109643?&forumID=500000008&anticache=1243835043566

http://pages2.ebay.com.au/InsideSelling#Dutch

Actually there is no information at all about this matter at this link.

Yet another hair-brained eBay decision; another disingenuous excuse—more spin that a child’s top. Who among us did not understand how to buy one, or more, units from a multiple-item “Dutch Auction” listing?

I haven’t yet figured out what benefit there is to eBay by the making of this decision, but you can bet there is some benefit in there somewhere as I cannot see any benefit for either buyers or sellers; indeed it is now not possible to buy more that one item at a time and that is certainly an inconvenience to buyers and sellers.

Ah, there it is! An individual listing for every item put up for sale means an additional listing fee for each item. They are getting desperate; the next quarterly financial report must be approaching; they’ve got no chance of improving FVFs as both buyers and sellers are abandoning ship, and so now they are desperately trying to squeeze a few more pennies out of the listing fees of the remaining sellers.

That definitely is blood that I can see in the water.

Feedback “bombing”

For a good example of an abuse of eBay’s feedback system, see:

http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedback2&userid=sfe17&ftab=AllFeedback&myworld=true
and
http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedback2&userid=dser209r&ftab=AllFeedback&myworld=true

If you look closely at these feedbacks you will see that the feedbacks and the language in both attacks is similar (non-English speaking background) and in each case there are 10-12 negative feedbacks for the same auction. How can that possibly be genuine. How can an attacker put multiple feedbacks on the same auction. No doubt the receivers of this feedback would have complained; but clearly no action was taken by eBay. So much for eBay’s system security and customer service.

Free listings promotions

The offers of free 99c-start listings, etc, may well be boosting the listing numbers but if stuff does not sell where is the benefit for anyone? And if the stuff does sell for 99c, who then benefits? Probably only the postal service. Clearly such promotions are not intended to benefit sellers. I can’t even see how they benefit eBay, except to artificially inflate the listing statistics so that they can try to con the stockholders (and some particularly thick market analysts) into believing that there is some progress being made, when regular eBay users know that the opposite is the case.

As an aside, the postal service clearly loves all the online businesses, like eBay: all those lovely parcels moving about. But even some postal services can’t help trying to trim a bit of fat off the golden goose: they have too many parcels now, so they jack up their prices. Funny, that’s what eBay is doing too: ever increasing their percentage-based fees and driving away more sellers (or was it the other way round: drive away sellers; jack up fees), but I don’t think that they actually want to slow the activity on the platform, even though that undoubtedly has been the result—Oh, well, such is the free enterprise system.

PayPal

“Noise” Donahoe and some market analysts seem to believe that PayPal’s manning of the pumps will keep the steadily sinking ship “eBay” afloat. I certainly would not put my money on the “clunky” PayPal for the long term. Assuming that the parties don’t have some agreement to not compete, I have no doubt that eventually those other well known “loan sharks”, the major credit card companies, will get off their butts and introduce a similar universal card/terminal-less on-line payments system that the participating banks can incorporate into their internet banking systems—and they, at least, will do it properly—and that, my friends, will undoubtedly be the end of PayPal outside of the Donahoe-dwarfed eBay marketplace ...

In the meantime, eBay sees only the potential for making more easy money out of PayPal fees than it does out of eBay fees, and eBay will therefore allow just about anyone to receive funds via PayPal to the extent that there can be only limited security—as many honest sellers and buyers have found to their cost.

eBay is not a bank and PayPal, unlike the credit cards, does not have the backing of a bank, nor is PayPal regulated as a bank, or a party to any of the codes of conduct as are the credit card companies.

The trouble with eBay management is that they can only see the easy, computerised, fee stream; they are not interested in any of the responsibilities that go with such an operation. Frankly, I cannot understand how PayPal is allowed to operate without more stringent consumer protections in place.

PayPal can never “know” its users the way a bank will knows its credit card users; PayPal can only ever rely on the fact that their customer does have a linked credit card or bank account; they can never know the substance of the user the way the user’s bank can.

Then there is the dispute resolution process: the credit card companies have an effective process; PayPal, so many if and buts, problematic in the extreme.

Then there is the problem of getting any money due to you out of PayPal and into your own bank account.

Clearly, PayPal can never be as effective or as secure as the major credit card system offered by the banks. The banks vet their credit card merchants: you at least have to have an account with the bank and they therefore have some knowledge of you; and they certainly have to vet their credit card holders.

How often do you hear of anyone complaining about a “bad” experience with a credit card company (other than the outrageous interest rate that they charge, and guess what eBay is also attracted to)?

Credit card companies understand that customer service is actually what their business is all about. When I buy a product or service from a provider, I expect to have a “good” experience every time. Is it any wonder then that so many people talk about their bad experiences with PayPal.

The only sensible way to make use of PayPal is to link it to your credit card, not your bank account. That way you have the benefit of the effective dispute resolution process offered by the major credit card companies (you can actually talk to a human being, and not one in the Philippines). (And, PayPal probably then has to split the fee earned from the merchant with the credit card company!)

The banks already have in place a very smooth working credit/debit card and internet payments system, which from the users’ point of view (both merchants and customers) is now as secure as any such system can be. The banks very rarely interfere with a transaction, and they also have an effective dispute resolution process if a problem does ever arise.

How much work do you really think there is involved for the banks to extend their existing smooth-working electronic payments systems to encompass card/terminal-less payments, in particular a terminal-less system for very small “merchants” which is PayPal’s only real advantage?

Anyone who has an internet banking arrangement with a bank already has supplied all the necessary information for the bank to implement and offer such a system.

Knowing that the banks are as attracted to a nice, easy, automated, 1-3% (of everything) fee stream as anyone else would be I cannot imagine that they are not already working on same. I would not be surprised if we don’t wake up one day soon with an email message from our bank telling us that the new payments portal is launched and all we have to do is insert the payee’s bank-registered email address and your password instead of credit card details.

The banks may well offer varying packages under such a payments system as they do with card transactions with merchants and on-line banking transactions. It may be that the banks would not offer warranted “merchant” services to entities that have no substance (banks at least have some idea of whether or not you have any substance), or they might even “hold” payments for a “clearing” period as they do with “paper” payments; whatever, I am sure that the banks will let PayPal continue to dabble in that riskier part of the business.

The big difference between PayPal and “the banks” is that, unlike PayPal (and eBay), the banks understand that they are in a service industry and they know they have to provide a satisfactory service 100% of the time to succeed in the long term. I doubt, when it comes to the home stretch, that eBay or PayPal can come to terms with that concept.

I recall that Donahoe has been quoted somewhere as saying that the door is slightly ajar for a potential spinoff of his company’s online payments unit. If this is correct it will be the first logical thought that this guy has ever had; he otherwise clearly has no idea of what he is doing at eBay. If that MBA taught him anything then he should be using whatever skills he does possess to negotiate with the banks to take PayPal and integrate it into their online payments system—in exchange for an appropriate interest in the consolidated business, of course. Because, the more successful PayPal is, the more likely it is that the banks will finally get off their butts and introduce a like system; if and when that happens the banks will do the job properly and will exterminate PayPal for being the “irritating insect” that it is.

Is that blood that I can see in the water? And are those sharks that I can see circling?

Another “loan sharking” story

I live in Australia. I bank with the Commonwealth Bank (been with them for 40 years) and use their Mastercard. My partner used to have a ANZ Visa credit card and bank account with the ANZ Bank.

Some years ago, before internet banking was so well accepted I used to pay our credit cards “manually”. Naturally, there was the odd time when I was a day or so late paying. I never paid any penalty with the Commonwealth for being a day late: they must have had a small period of grace built in; on one occasion when I was later than a few days, I did pay a penalty: interest on the balance for the few days that I was late.

The ANZ, on the other hand, when I was only one day late, clobbered my partner for interest on the balance for the whole “interest free period”: one day late, 55 days interest! Needless to say that encouraged me to put in place the authorities to pay these balances automatically—and on time!

Some time later we received a letter from the ANZ Bank advising that for those card holders who paid their card balances automatically the ANZ Bank was going to take that payment one week earlier.

Needless to say we were not happy about that and so I visited the local ANZ Bank branch and closed both the bank and the credit card accounts. But the most amazing part of the story is that the staff at the coal face first heard about this proposed action only when customers started coming in to complain about it. Two weeks later we received another letter advising that the bank was not going to proceed with this action; but too late to retain us as a customer.

The real question to be asked is, what sort of idiot could possibly come up with such a plan in the first place? Then, the comparison to be made between the ANZ Bank and eBay is that the ANZ Bank was at least smart enough to almost immediately reverse such a stupid proposed action as soon as they realised that it was not acceptable to many of its customers. eBay on the other hand …

Skype

Here we are with the masters at producing long contract documents (PayPal, 28 pages I understand; who’s read it?) and apparently eBay does not read such lengthy documents themselves. They “bought” Skype for $2.6 billion but apparently they only bought a licence to use it and don’t have the right to on-sell it! What can one say? No doubt the shysters will be able to sort it all out …

The final analysis

If any business should be at least holding its own in the present economic climate, surely it should be eBay. But they cannot even keep up with Amazon whom, some suggest, they are now trying to emulate. Regardless, no business can hope to prosper by alienating so much of its customer base. eBay’s management has been desperately trying every trick in the book to prop up the return to its stockholders: if you can’t increase revenues by growing the business then the only thing to do is increase fees (and drive away more customers) and cut costs by cutting services (eg, the October 2008 massacre, and the recent Philippines exercise). I have to wonder how many more quarters of shrinking revenues and profits it will take before the directors of this company, who are supposed to be looking after the interests of the stockholders, come to terms with the fact, obvious to many observers, that whoever is making the decisions at eBay at the moment has no idea of what they are doing?

I have no doubt that Captain Donahoe is a very cunning man; what a shame it is then that none of his cunning plans have been able to counteract the loss of all those “noisy” steerage class passengers that he so arrogantly dismissed as being of no value to his ship. If this arrogant man has any business sense, I’ll bet he wishes that he had kept his big mouth shut; but then I guess that’s the difference between a real CEO and a mere backroom consultant with an MBA.

The advantage of Donahoe having an MBA is that he is at least able to understand that when so many customers are driven away he has to try to make up for the subsequent loss in revenue, and in particular, profits in some other way, so as to maintain the return to stockholders, otherwise the executive performance bonuses dry up.

And so, each quarter, as revenues shrink, to maintain profits we have to “pink slip” more staff and cut more services; of course, attempting to maintain profit levels in such a way invokes a logarithmic reaction and very quickly there aren’t going to be any staff left to “pink slip”. And, anyone with half a brain would understand that such actions will lead to a downward spiral, such as that which eBay is presently experiencing.

Reminds me of that old story about the “kafula” bird, that little African flycatcher bird that for some unknown reason sometimes starts flying in ever decreasing circles, at ever increasing speed until finally, in a blinding flash, it disappears up its own fundamental orifice ...

The other story that comes to mind is that of Captain Queeg, when his ship the USS “Caine” continued turning round until it cut its own tow line attached to the object it was towing. Something like the SS “eBay”: clearly, no competent helmsman in control. I wonder if Donahoe too has a couple of steel balls that he rolls about in his hand?

Unfortunately, Donahoe’s MBA only qualifies him to dismantle a company; he apparently has no understanding of the concept that happy customers leads to happy revenues and profits: he is apparently still laboring under the delusion that because eBay’s position is so strong (used to be stronger) he can do whatever he likes. I wonder how many more quarters of reducing revenues and much reduced profits it will take to convince him (and his board) otherwise?

You have to ask yourself how an organisation with such greedy, incompetent managers who appear to be so thoroughly despised by so many of their users, can possible survive, let alone thrive? Of course it can not and the evidence of that is in the continuing downward trend of the quarterly results.

The other minor problem that eBay has is that they know that their auction system is so “clunky” that it effectively aids and abets unscrupulous sellers to defraud buyers; they also knowingly conceal such criminal activity after the fact, which has them bordering on being some sort of criminal organisation.

In the meantime, if Donahoe is good enough for a directorship at Intel, could we dare to hope that they might offer him an executive position too? They apparently think that he has some ability. Then maybe eBay might be able to find someone who understands what eBay is, put the pieces of eBay back together again, and let us all (including the stockholders) get on with having some fun and making some money.

One day one of these ex tobacco-company-type executives will write an anonymous book about their experiences at eBay; it will make interesting reading.
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Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

PhilipCohen · Joined: 14 Mar 2008 Posts: 117 Location: Sydney, Australia

Well, if you’ve managed to hold your concentration this far you may as well carry on to an introduction to some further examples of the facilitating of fraud on buyers by this most unscrupulous of organisations:

Why is ‘Noise’ Donahoe still trying to destroy eBay?
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6502877
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Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.