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8 EBay Sellers Admit to Phony Bids

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8 EBay Sellers Admit to Phony Bids

#1

8 EBay Sellers Admit to Phony Bids

Bob Smalser, Seabeck, WA

>Dunno if this applies to the low-end tool market...but it bears watching.


November 7, 2004

8 EBay Sellers Admit to Phony Bids

By THE ASSOCIATED PRESS

Filed at 1:48 p.m. ET

ALBANY, N.Y. (AP) -- Eight eBay sellers were ordered to pay nearly $90,000 in restitution and fines after admitting they bid up products online to inflate the prices.

New York Attorney General Eliot Spitzer said more than 120 people will receive restitution in the settlement of the three cases, which wrapped up last week in state courts.

Spokesman Darren Dopp said the cases stemmed from specific complaints, but the office has not conducted a broad investigation of the online auction industry and doesn't know how widespread the practice of phony bidding is.

One buyer, Brad Clarke, 48, of Peachtree City, Ga., already has received a check for $3,089 after overpaying for a 1999 Jeep Cherokee sport utility vehicle he bought on eBay from a New York seller in 2002.

``I'd always been suspicious because it seems like an easy thing to do, to just keep bidding up,'' Clarke said. ``But I was still just completely shocked and very surprised.''

Three sellers were accused of making 610 bids on 106 of their car auctions under the user name ``Mother's Custom Automotive NY Dealer.'' They are paying more than $28,000 in penalties and restitution, Spitzer said. Their lawyers declined to comment.

In another case, the operator of an art auction house and two former employees were accused of bidding on more than 1,100 of each others' eBay items for more than five years to drive up the prices. Some paintings sold for thousands more than they were worth.

Spitzer said one of the sellers pleaded guilty to a felony charge, the other two to misdemeanors. They were ordered to pay more than $50,000 in restitution and fines.

The other two defendants were accused of making 170 phony bids on their sports memorabilia items. They agreed to pay $10,000 in penalties and restitution.

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Re: 8 EBay Sellers Admit to Phony Bids

#2

I don't get it

Todd O. Cronkhite Maine Native in FL. Exile :~(

>I understand that they made bis on their own stuff, BUT those where out bid by somebody who thought it was worth more than what the sellers had jack the bid up to. don't make sense to me for the sellers to be in trouble. what if nobody had out-bid them, then they'd be stuck with the product, and probably still have to pay the e-bay cost right? I can see where this would not be what would be considered an honest thing to do, but I can't see them getting felony records for it, afterall, they where out-bid.

What is it that I'm just not seeing?

Todd O.

Re: 8 EBay Sellers Admit to Phony Bids

#3

Re: I don't get it

Larry Clinton - Frankfort, Indiana

>Todd, I would bet (haven't read the case yet) that there was an agreement that one party would "shill" for the other. In other words, if they won the bid they would not have to purchase the merchandise. That is illegal, just like price fixing. If a business wants to raise its prices and others follow suit it is not illegal. But if they discuss the matter and all decide to raise prices to a certain point it is illegal. Probably came under that law.

Re: 8 EBay Sellers Admit to Phony Bids

#4

Re: I don't get it

Mike in Mystic

>I see what you're saying, Larry, but I agree with Todd.

In an auction, the person making the bid is the one decided whether or not to buy it. If the item doesn't meet the description of the seller or if there is something hidden (like an undisclosed lemon car, for example), that seems fraudulent. In these cases, however, even if you had your friends bid up the price, it still seems that the people who willingly outbid these people made their own decision.

I admittedly don't know the specifics of this type of law, but it sure sounds like another opportunity for overzealous and ambitious attorney generals to go on the war path just to make a name for themselves.

Mike

Re: 8 EBay Sellers Admit to Phony Bids

#5

Re: 8 EBay Sellers Admit to Phony Bids

Pam Niedermayer - Austin, TX

>That's cool, thanks, Bob. I've seen some hints of this activity in the tool market, lots of items the seller claims the bidder welched on as an excuse for relisting (granted, this is sometimes true), lots of items listed immediately after what appeared to be a successful auction, lots of items that go for too much, etc.

And my kudos once again to Eliot Spitzer, our only savior at the moment. Reminds me of the old Giulianio.

Pam

Re: 8 EBay Sellers Admit to Phony Bids

#6

Re: I don't get it

William R. Duffield on the Cohansey

>I'm not saying shilling is an honorable practice, but what is the conceptual difference between a seller trying to increase the perceived worth, and therefore the sale price, of an item by:

1) getting some unknown bidder to say "I want it!" in an auction, or

2) paying some highly respected celebrity to say "I want it" in a multimegabuck TV ad campaign???

Depending on the spin you put on it, shilling is just another market analysis tool. Other, more respected, tools don't work very well for one-off items.

The worth of an item is in the mind of the buyer. Some buyers are unduly influenced by some deceptive sales practices, some by other types of deceptions.

Which types of deceptions should the government be protecting us from, and what can they reasonably protect us from? Are there other, better ways we can protect ourselves and each other from deceptions in the marketplace? Please do not answer these rhetorical questions on this forum, as it would probably get us quickly and deeply into partisan politics. Just think about it, and make up your own mind.

Disclsimer: I am not a celebrity, nor do I play one on TV. Neither am I a shill, but like everyone else who voices his opinion on this forum (with the probable exception of Lyn), I think I am cabable of becoming overly enthusiastic about the value of a product.

Re: 8 EBay Sellers Admit to Phony Bids

#7

Re: I don't get it

Roy from Cincy

>I understand your point of view. In a world of mature bidders with good self discipline, shilling would be a waste of time. However, it is illegal and it is against the E-Bay code of conduct. The underlying plan is to stimulate buying fever in the unsuspecting populace. It's the kind of thing that would get one tarred and feathered in the good old days.

Also, in the E-Bay system of automatic bidding, a shiller could make a guess about a legitimate bidder's maximum and bid up but stay below the max, forcing the legetimate bidder to pay more than he might otherwise have done. That is a serious abuse of the system. It doesn't depend on bidding fever or bad judgement, it just steals any bargain that the bidder might have gotten.

Re: 8 EBay Sellers Admit to Phony Bids

#8

Re: 8 EBay Sellers Admit to Phony Bids

John Stegall

>Thanks for the post Bob. I once lost a bid only to be contacted by the seller offering to sell me the same item (it was a plan) for the accepted bid price. I decided to go and found out the guy had a website selling the same item for less. I chalked it up to stupidity on my part. I agree with Pam that Spitzer seems to be getting results for his constitutients (sp)

Re: 8 EBay Sellers Admit to Phony Bids

#9

Spitzer for President!

Tom Sontag - St. Louis

>Actually, not much of a joke. Remember that Rudy G. got his start tackling populist legal causes. And I agree that Spitzer is bringing some law into infrequently enforced areas and that this is a good thing. But I would not be surprised if he decided to ride the wave into politics.

Go get 'em Eliot.

Re: 8 EBay Sellers Admit to Phony Bids

#10

Jack Guzman from Maine

Re: I don't get it

Jack Guzman from Maine

>I agree. The practice is also unethical and if allowed would undermine and eventually eliminate online auctions.---Jack

Re: 8 EBay Sellers Admit to Phony Bids

#11

Re: Spitzer for President!

Angelo in Cornwall, NY

>Actually, there are already rumors about Spitzer running for Govenor here in NY. He does have a long standing record of consumer advocacy, and has done a great job as AG.

Re: 8 EBay Sellers Admit to Phony Bids

#12

Now I wish...

Todd Hughes

>they could do somthing with all the dead beat bidders that don't pay for what they buy a much bigger problim I think then shill bidding. While I grant you shill bidding is wrong at least the item doesn't get sold if the high bidder is the shill[then the seller still has to pay the ebay fees] or if the non shill bidder is the highest he still gets it for what he was willing to pay for it. With non paying bidders the other bidders are hurt since they don't get what they normaly would win as well as the seller who often has to eat the listing fees etc.You can forget about the threat of leaving negative feedback.I have 8 negatives,[out of 4,500 +] and 5 of them are from people that never paid for an item! and left me a negative after I left them one relecting that. Plus as a buyer negatives mean squat, what seller ever even looks at the buyers feedback unless it is neg.2 or somthing so what is the threat there? Many ebay bidders think there is nothing wrong with not paying you if they find a cheaper example elsewhere after the auction or if they just change there mind.Also I have had some bidders bid real high I think to discourage other bidders and to find out what they bid then withdraw thier bids at the last min. possiable so they can to bid a lower amount.Am having trouble right now with a guy that tried to withdraw his bid in the last hours of the auction only to find out that you can't do that.Doesn't want to pay because he said he bid with out reading the description[!] where I described the item was missing parts......I am sure there are many buyers that get burnt on ebay but boys there's the other side as well and don't forget that!.....Todd

Re: 8 EBay Sellers Admit to Phony Bids

#13

Re: I don't get it

Ernie Miller Topeka

>Back the dang plane up and clear the chips out of the throut! Here you are down a few threads wantin to skin alive or worse some one for stealing a hand plane. but when the seller of somthing uses false prentences to run up the value STEAL money for people buying things on ebay it'a ok? It's the exact smame thing. sure the person is willing to pay said amount for somthing but why should they be forced to pay there higest price by the sellers and there crooked friends?

Re: 8 EBay Sellers Admit to Phony Bids

#14

Re: I don't get it

Mark Nowicki

>Hi Ernie

If you take your argument to its logical conclusion only the FIRST bidders would have the right to buy the item.

Regards

Mark Nowicki

Re: 8 EBay Sellers Admit to Phony Bids

#15

Re: I don't get it

Ernie Miller Topeka

>No There is a differance between two intrested parties bidding on the same item and running the price up the problem is when one of the parties running it up is the seller. when that is the case the seller is a THEIF! By charging more for the item than it's natural value of an auction. I was at an estate auction this summer and it was onlt into it about 20 minutes when the auctioneer stopped the auction and told people it was over because the seller was bidding on there own property running the prices up. There were alot of tools That I wanted there but the auctioneer was ethical and I will return to more of his auctions because of that. If a seller want's a certin price they have the right to place a reserve on it. they don't have the right to run people up with false bids.

Re: 8 EBay Sellers Admit to Phony Bids

#16

Re: I don't get it

Ron in Kokomo

>An auctioneer owes the public an "honest broker"

They are dishonest when they are bidding in a sightless auction to jack the price on something that they own.

When someone pust an item on ebay he becomes for that item an auctioneer

Re: 8 EBay Sellers Admit to Phony Bids

#17

Re: Now I wish...

Dennis Mcdonaugh

>Todd, what about sellers that don't leave feedback for buyers who complete sales for 5/8 chisels without problems?

Re: 8 EBay Sellers Admit to Phony Bids

#18

Oh, Break my Heart Roy

Todd O. Cronkhite Maine Native in FL. Exile :~(

>Your talking about Snipers. I don't know how sniper programs work but I imagine the buyer programs in his max price and the programs outbids it at the last second by $1. Yeah, oh, freaking ya' I've been out bid on something that I've really wanted by $1 many times at the last second by what has to be a sniper program. Oh, yeah, fried me good too, and made me say naughty words. so, finally a sniper gets burned and he goes crying to somebody because he didn't get his "good deal". Should of set his sniper program to a lower max shouldn't of s/he.

Ha! I love it, and sniper shot by his own program.

Todd O.

Re: 8 EBay Sellers Admit to Phony Bids

#19

??

Todd Hughes

>

Re: 8 EBay Sellers Admit to Phony Bids

#20

I know Ernie.....

Todd O. Cronkhite Maine Native in FL. Exile :~(

>that my stance on this seems to be a direct contradiction of my standards, and I'm not saying that I agree with this practice of "shilling", as I don't, but the way I see it, at the end of the day it was the final buyer who out bid the "shilled" price, and now, for some reason this buyer dosen't want to take responsibility for his/her actions.

Skin a thief alive, no, not me, that's way to good for them in my book.

Todd O.

Re: 8 EBay Sellers Admit to Phony Bids

#21

Re: Oh, Break my Heart Roy

Pam Niedermayer - Austin, TX

>Todd, there's no way you can know what the winning bidder bid. It's just that it's $1 more than the next lowest bidder. And this doesn't just happen with sniping, it also happens with regular bids.

Pam

Re: 8 EBay Sellers Admit to Phony Bids

#22

pack your bags

Jonathan Peck - N.Y.

>Hi Todd,

Pack your bags and move on up to the mean streets of NYC....I've got a position open that's begging for a guy who ain't never gonna let anyone beat em' and still be ethical at the same time.

Regards

Jonathan - who isn't kidding

Re: 8 EBay Sellers Admit to Phony Bids

#23

Re: I know Ernie.....

Ernie Miller *Topeka

>I'm betting that most of the buyers didn't even know they were scamed untill the AG investigated and filed suit. They are probabyl laughing all the way to the bank if they ever get their restution. Most likly the people will file bankruptsy and walk away.

Re: 8 EBay Sellers Admit to Phony Bids

#24

Re: ??

Dennis McDonaugh

>Maybe I'm mistaken, but I bought a chisel from Todd Hughes in Maryland off of e-bay. I thought it was you. The user name was mrsdeadhorse. I left feed back but Todd Hughes didn't.

Re: 8 EBay Sellers Admit to Phony Bids

#25

feedback is optional

Tom Sontag - St. Louis

>And in the instances when I do not provide feedback, it is USUALLY in the buyers favor.

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