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WOW! Shill bidders on eBay caught, and fined by the Attorney General

GeomanGeoman Posts: 2,491 ✭✭✭
Check this out. 'Bout time!!!

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  • Maybe we should send this to some of the coin scum on ebay
    Building 33-47 Mint Sets always looking for MS67s PM with any coins you might have for sale.

    Mike
    idocoins
  • MrEurekaMrEureka Posts: 23,891 ✭✭✭✭✭
    For all it's worth, I don't think shill bidding should be a crime. In fact, I like shill bidders. The more shill bidders we have, and the more their presence (in general) is known, the less likely it will be for someone to "go to school" on MY bids and cost ME money.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • mreureka..why do you use a pic of a rat as your icon?
    when judgement day comes..
  • MyqqyMyqqy Posts: 9,777
    For all it's worth, I don't think shill bidding should be a crime. In fact, I like shill bidders.

    image
    My style is impetuous, my defense is impregnable !
  • TUMUSSTUMUSS Posts: 2,207
    I have a SIMPLE rule.....Bid what I am willing to pay. The rest is for others to worry about.
  • Spitzer has been a busy guy lately!
  • MrEurekaMrEureka Posts: 23,891 ✭✭✭✭✭
    Myqqy - What's so puzzling? When I raise my hand at an auction, some people may be more likely to figure the coin is a good deal, so they bid against me and cost me money. They are using MY knowledge to cost me money. If I bid as a shill, their strategy backfires. Isn't turnabout fair play?
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.


  • << <i>Myqqy - What's so puzzling? When I raise my hand at an auction, some people may be more likely to figure the coin is a good deal, so they bid against me and cost me money. They are using MY knowledge to cost me money. If I bid as a shill, their strategy backfires. Isn't turnabout fair play? >>


    Only if they bump your bid.........if they don't you get caught holding the bag.
    Building 33-47 Mint Sets always looking for MS67s PM with any coins you might have for sale.

    Mike
    idocoins
  • MrEurekaMrEureka Posts: 23,891 ✭✭✭✭✭
    Only if they bump your bid.........if they don't you get caught holding the bag.

    No problem. It's a calculated risk.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • BigEBigE Posts: 6,949 ✭✭✭
    Maybe dress up as someone else?-----BigE
    I'm glad I am a Tree
  • CardsFanCardsFan Posts: 1,093 ✭✭✭
    Is shill bidding on e-bay really that bad? It's not much different then setting a reserve, except for a little more devious. If your shill bid wins then you still have to pay the fees and resell the item just like if the reserve was not met. The main difference being that many e-bayers hate reserves and stay away from these auctions. Some bidders are little timid to bid on something with a high opening bid because they may not think they are getting a good deal. I agree that shill bidding is dishonest because it makes other bidders think that there are other parties interested when there are really not, but is it really a crime in an electronic bid environment? Or do I not fully understand shill bidding? BTW I have never shill bid.
  • As far as shill bidding goes, if I am in a bidding war on a coin I always check their bidding and win history through the advanced search engine on Ebay. If I were to see a suspicious bidding practice, I would set my limit and not go any higher. And I have saved my favorite and trusted sellers and usually bid with them. Shill bidders should be taken out back and horse whipped. It really is a dishonest practice, deceiving the other bidders. Integrity is the key word here.

    image

    image
  • Its about time!
  • First of all, I never bid on my auctions. When I put it up it’s going to another home. Having been in the thoroughbred horse business for 30 years I know that at least 50% of auctions have a reserve or there are shill bidders. It is an excepted practice. When it comes to bidding it should be buyer beware. It is the buyers responsibility to know the value he or she is willing to pay. If the item is unacceptable it should be returned. I am not condoning the practice, just excepting and trying to recognize the sellers with shills or hidden reserves. Welcome to the real world.
  • "Maybe we should send this to some of the coin scum on ebay"

    Not to mention those here on the boards that have participated in this practice as well image

    For all it's worth, I don't think shill bidding should be a crime. In fact, I like shill bidders. The more shill bidders we have, and the more their presence (in general) is known, the less likely it will be for someone to "go to school" on MY bids and cost ME money.

    Andy, you're INSANE. Yes, let's allow shill bidding just to protect YOUR bottom line image Ever hear about sniping image
  • GeomanGeoman Posts: 2,491 ✭✭✭
    "...Having been in the thoroughbred horse business for 30 years I know that at least 50% of auctions have a reserve or there are shill bidders..."

    ???image

    Shill bidding is not only unethical, but illegal. Why do you think that these people were fined by the Attorney General?

    For example, if I am willing to pay up to a max of say $500 for a coin, and shill bidders are at work, I could easily end up paying more than I should have. Maybe that coin would have sold for $350, but shill bidding pushed it to $450. My max was still $500, so I would win it. But I would have paid $100 more than I originally would have if this practice of shill bidding wasn't in use. This hurts the hobby in the long run!

    It's a form of "price-gouging!"
  • BigEBigE Posts: 6,949 ✭✭✭
    I think what some members are saying is that "shill" bidding has been a part of the auction scene since the beginning of time. I have had some auctioneers ask me if I was going to place a reserve on an item or "just protect it myself". Traditionally I don't think it was looked at as a crime----------------------------BigE
    I'm glad I am a Tree
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    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.

    the only part of the article i can really disagree with is the part that relates to the worth of an item. something's worth and the amount we pay aren't really the same thing, are they??

    on the face of the above statement, they seem to be saying that a buyer may have paid $10K for a painting that was only worth $5K. what if he had won the item for $3K?? logically, an item is worth whatever a buyer is willing to pay.

    al h.image
  • What about a fellow collector bidding on an item just to push the price up because he paid a high price for one earlier and does not want you to get it cheaper than he did?
    Bill

    image

    09/07/2006
  • orieorie Posts: 998
    Years ago, when I was still green in the horse business, I was complaining about the atrocities that went on. An old timer told me the horse business wasn’t for boys in short pants.


  • << <i>For example, if I am willing to pay up to a max of say $500 for a coin, and shill bidders are at work, I could easily end up paying more than I should have. Maybe that coin would have sold for $350, but shill bidding pushed it to $450. My max was still $500, so I would win it. But I would have paid $100 more than I originally would have if this practice of shill bidding wasn't in use. This hurts the hobby in the long run! >>



    This scenario is only partly true. You wind up paying more if the shill bidders somehow know exactly how high they can run you before you will drop out. Otherwise they would be buying it themselves, which they don't really want to do. It goes both ways, though. Let's say you were selling a coin and there was a single bidder interested in it who was willing to go up to $1000. Since nobody outbid him after the opening price of, say $450, then he wins it for that price, and you would lose the extra potential money. This, of course, is the reason we have reserves in the first place. Shills are not a far stretch from that.
  • Well, Ebay hates shills because they lose revenue from a reserve or higher opening bid, and thus it is against their rules. However, I did not know that shill bidding was illegal per se (or at least in NY). At foreclosure auctions, the bank may bid on its own property if the value is not high enough for them, but perhaps that is not considered shill bidding, since that possbility is disclosed up front.
  • Very Interesting. I feel I may VERY WELL be a shill bidder with the coin auctions. Especially with similar stuff for sale I ALREADY OWN MYSELF, and I would buy it at the same price (or cheaper) even if I didnt really want it, to protect MY original investment.

    Bill, it relates to your question. I DO bid higher on stuff, even if I really dont want it. Because I feel I WHOULD pay for something (quite similar with same grade/TGP/coin) at or lower than what I have.

    If someone has a bid max, then that bidder is WILLING TO PAY FOR THAT item up to that price. If someone pushes the bid up to that, then too bad...he was willing to buy it up to their max anyway.

    If bidders are bidding on each other's stuff to incinuate a value on an item, and then someone else buys it, well two things:

    They were willing to buy it at their bid price, and they were a sucker!!!! If the (true) value is less than what they paid for it, then they should have 1) done their homework before bidding. 2). Not gotten caught up in the hoopla of bidding...

    ------Lloyd
    The Accumulator - Dark Lloyd of the Sith

    image
  • If everything posted a reserve, shill bidding shouldn't have much of an effect, correct?
    The Accumulator - Dark Lloyd of the Sith

    image
  • CardsFanCardsFan Posts: 1,093 ✭✭✭
    If everything had a reserve I would do alot less bidding. I hate being the high bidder and not reaching the reserve. I'd rather see high opening bids then reserves, in fact I'd rather be shilled then bid on a reserve auction.
  • MarkMark Posts: 3,520 ✭✭✭✭✭
    Another issue with shill bidding is that you might be unaware of the depth of a market and shill bidders can present a misleading picture. For instance, you must be much "safer" buying a coin for, say, $1,000 if there were 4 active under-bidders from $500 to $950 then if there was just one under-bidder from $500 to $950. If there are 4 active under-bidders and your circumstances change, then it's likely that if you quickly auction the coin, you'll get a price near $1,000. But if there is only 1 under-bidder, when you auction the coin it's likely the price will be much lower because the under-biddder has no else to compete against once the coin hits $500. So the presence of shill bidding may well give the appearance of more under-bidders, thereby making coin look like a safer purchase and thereby increasing the amount you are willing to pay for it.

    Mark
    Mark


  • I disagree Mark. Though the "two bidder" war happens, it benefits the seller, but each buyer should STILL NOT GET CAUGHT UP IN THE HOOPLA of bidding to win. All of us buyers should have a limit BEFORE we start bidding on how high we go, so whether 2 or 20 bidders, for me, doesn't make a difference.

    ------Lloyd
    The Accumulator - Dark Lloyd of the Sith

    image
  • Well, how would you like to "really" be the only bidder on an item at a live auction.
    And the auctioneer uses imaginary shill bidders to drive up the price, and then comes back to you, to
    try and suck you in with another bid?
    So let's see, the last time they tried this with me, I was in the middle of the crowd, my friend sat at the rear corner.
    The auction started on a item, no one bid, just before the auctioneer gave up on it, I bid $25.00. It was barely worth $25 anyway.
    Suddenly the auction came alive, with bids popping up all over the place, and then when the auctioneer came back to me,
    the bid is now $125.00!
    Of course I declined.
    Later my friend told me he saw no one else bid, the auctioneer was pointing to no one when he jacked the price up himself.
    No one was raising their hands, fingers, nodding their heads or anything at the time during that auction.

    So by all your thinking about shill bidders, doing such things, like this, is perfectly OK?

    Sorry I do not like shill bidders, unfortunately it is a fact of life.
    Basically, if I suspect a shill bidder is involved, where one is or not, I won't bid, that's it for me.

    It is really interesting to be the fourth or fifth loser in an auction and get a second chance offer at your highest losing bid.
    I am still not sure what to think about those, but I pass on them at that point anyway. Something's just not right with it
    at that point.

    image


  • << <i>logically, an item is worth whatever a buyer is willing to pay. >>


    Common misconception. If both the seller and buyer are knowledgable and understand what they are bidding on then I will agree. But if one of them DOESN'T know what is being sold then the statement is NOT true. A good example is the auction that Braddick bought earlier, a 1972 DDO die 7. A die 7 coin normally sells for $3 - $6. This coin was slabbed as a DDO with an FS # but not a die number. Braddick paid $127 and thought he got a bargin at first. Now you have a willing seller (boy I bet he was willing) and a willing buyer But that DOES NOT make a die 7 72 DDO "worth" $127. It doesn't even make that one worth $127 at the time of the sale, because one person is selling one thing and the other thinks he is buying something else. The opposite can also happen as when I bought a token on ebay thet the seller called a Warwickshire 350 but which I recognised as the second known 340bis. I bought it for $15. Properly identified and brought to the attention of Conder collectors it probably would have brought ten times that amount. (I did offer the seller more money after the auction because I got it too cheap but he was a gentleman and passed on my offer.) Does that mean the the token is only worth $15 because that's all I paid for it? No, because there was information that was not known that altered the PERCEIVED value of the coin.

    Lloyd,

    Mark is right when he says:


    << <i>you must be much "safer" buying a coin for, say, $1,000 if there were 4 active under-bidders from $500 to $950 then if there was just one under-bidder from $500 to $950. If there are 4 active under-bidders and your circumstances change, then it's likely that if you quickly auction the coin, you'll get a price near $1,000. But if there is only 1 under-bidder, when you auction the coin it's likely the price will be much lower because the under-biddder has no else to compete against once the coin hits $500. So the presence of shill bidding may well give the appearance of more under-bidders, thereby making coin look like a safer purchase and thereby increasing the amount you are willing to pay for it. >>


    Multiple underbidders does make your purchase safer. Case in point: Back in the late 80's there were a group of early copper collectors that were collecting late die states. When the Jack Robinson collection was sold ther were many late and terminal die states included. the five bid aganst each other and record prices for those coins were set. About a years later one of them sold his set and the other four competed and again records were set. A year later it happened again with three bidders an new records, then with two and again new records. The next time they were sold though the last specialist was able to pick up these formerly record setting coins for a song because there was no longer any other serious underbidders. The next to the last collector lost his shirt on those coins because he bid to "unsafe" levels with only one underbidder. Shill bidders could give you a false sense of security with your bids because you think there are more underbidders than there actually are.
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    hey Mike

    please, i think you understand what i was saying and your comparative example isn't even close.

    al h.image
  • LincolnCentManLincolnCentMan Posts: 5,347 ✭✭✭✭
    I agree that Shilling has been a problem on ebay. The best defence against it is to use a sniper program and plug in the most you would be comfortible paying for the item.

    David
  • FrankcoinsFrankcoins Posts: 4,569 ✭✭✭


    << <i>

    Shill bidding is not only unethical, but illegal. Why do you think that these people were fined by the Attorney General?

    For example, if I am willing to pay up to a max of say $500 for a coin, and shill bidders are at work, I could easily end up paying more than I should have. Maybe that coin would have sold for $350, but shill bidding pushed it to $450. My max was still $500, so I would win it. But I would have paid $100 more than I originally would have if this practice of shill bidding wasn't in use. This hurts the hobby in the long run!

    It's a form of "price-gouging!" >>



    I don't see how violation of ebay's "rule" can be a criminal act. These press releases from various attorneys general often
    cite special thanks to ebay's staff for educating them. If it's "illegal," why does virtually every auction house (Teletrade,
    Stack's, Heritage, Christies, Sotheby's) allow the consignor to bid on their own auctions, under the logic that the owner has a right to determine the minimum price that he will accept for his property?

    Does the fact that ebay originally allowed shill bidding "to allow the owner to set a reserve" but disallowed it the same time they
    started CHARGING EXTRA to set a reserve reveal their true motives? (Hint: it's not protecting the bidders.) How often is violation
    of a contract term prosecuted as a crime?

    If an owner doesn't wish to sell for less than $500, and has a secret reserve, and you place a bid on ebay for $350, you don't get the coin.

    If the owner has placed a bid on his own behalf of $500, and you place a bid for $350, you don't get the coin.

    If someone placed a bid of a penny on a $500 coin, and didn't get it, but kept increasing their bid until they met the
    reserve, is this "price gouging?" Should they call the FBI and complain that they should have only paid a penny?

    I am not advocating violating ebay's rules. My interest in this subject stems from the fact that I am a licensed auctioneer
    in Texas, where consigners have the right by law to bid on their own items.

    I ran a brick and mortar coin store for ten years. After deciding to sell only at shows and online, I distributed flyers at
    shows and obtained a number of ebay customers who were leery of "efake" but joined specifically to bid on my merchandise.

    Before long, the "ebay vigilantes" who think anyone buying mostly from one dealer is a shill, were running a program
    called "esafe2bid" on my customers, and publicly posting the results in a coin newsgroup, asking everyone to report
    "this obvious shill bidding." Four of my best customers were suspended until they provided ebay with a copy of
    their driver's license and a "water, phone, gas or electric bill."

    Two complied, and only one remained as a customer. A third was a "survivalist" who thought it was a trick by the
    government to take his guns and post-1933 gold coins. A fourth lived in a "bills paid" apartment, had cable internet, and
    his only phone was a cell phone issued in his company's name --- this guy was never able to get back on ebay.



    Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com


  • << <i>Myqqy - What's so puzzling? When I raise my hand at an auction, some people may be more likely to figure the coin is a good deal, so they bid against me and cost me money. They are using MY knowledge to cost me money. If I bid as a shill, their strategy backfires. Isn't turnabout fair play? >>



    Hey Andy, that's how I've been making my living for these past several years! Don't dis' me 'cause I jumped on the Gravy Train!

    Rgds,
    Dave W.
  • CoxeCoxe Posts: 11,139
    Where is this article? Looks like it moved or was deleted.
    Select Rarities -- DMPLs and VAMs
    NSDR - Life Member
    SSDC - Life Member
    ANA - Pay As I Go Member


  • << <i>Myqqy - What's so puzzling? When I raise my hand at an auction, some people may be more likely to figure the coin is a good deal, so they bid against me and cost me money. They are using MY knowledge to cost me money. If I bid as a shill, their strategy backfires. Isn't turnabout fair play? >>



    So, what MrEureka is saying, I think, is that he has no problems shill bidding himself in his own auctions (meaning Smythe?) just to play a head game or to be onery.




    Jerry
  • FrankcoinsFrankcoins Posts: 4,569 ✭✭✭


    << <i>Well, how would you like to "really" be the only bidder on an item at a live auction.
    And the auctioneer uses imaginary shill bidders to drive up the price, and then comes back to you, to
    try and suck you in with another bid?
    So let's see, the last time they tried this with me, I was in the middle of the crowd, my friend sat at the rear corner.
    The auction started on a item, no one bid, just before the auctioneer gave up on it, I bid $25.00. It was barely worth $25 anyway.
    Suddenly the auction came alive, with bids popping up all over the place, and then when the auctioneer came back to me,
    the bid is now $125.00!
    Of course I declined.
    Later my friend told me he saw no one else bid, the auctioneer was pointing to no one when he jacked the price up himself.
    No one was raising their hands, fingers, nodding their heads or anything at the time during that auction.

    So by all your thinking about shill bidders, doing such things, like this, is perfectly OK?
    >>



    The auctioneer in this case is calling bids from the book. If you bid $125 and there is a book bid of $200, he
    will engage you in stepping up in $5 or $10 increments until either you win it at one increment over the book
    bid, or the book wins it at one increment over your bid.

    People apparently don't understand how auctions work
    Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com
  • FrankcoinsFrankcoins Posts: 4,569 ✭✭✭


    << <i>Where is this article? Looks like it moved or was deleted. >>



    Link
    Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com

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