Shill Bidding on eBay

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

January 28, 2007

Shill Bidding on eBay

By: Ina Steiner

Sun Jan 28 2007 13:29:13

First CNBC ran a television segment on e-Fencing of stolen goods on eBay. Now the UK newspaper The Times features an article about shill-bidding on eBay. Both reports are extremely negative.

eBay's recent Trust and Safety initiatives are well intentioned, if a few years late, but I think there may be one component missing: better information about sellers.

I get emails from sellers who have been on the site for years, but suddenly they have their selling activity limited (lately due to eBay's anti-counterfeiting initiative). My sincere sympathies are with those sellers, but then watching the CNBC segment, I think - how does eBay know if a seller is selling counterfeit or stolen goods?

While some sellers are loathe to give information to eBay, it may not be asking for too for eBay to request tax IDs, verify the seller's identity, and possibly do some kind of check. If carried out properly, not only might it limit bad sellers, but it might prevent eBay from limiting good sellers.

In an articleI wrote last Spring, "Fraud: What's an Online Auction Site to Do?" I discussed the various options that auction sites have in vetting sellers. eBay can no longer go back to the more free-wheeling days of 1999 - 2000. They need to know that sellers on the site are legitimate, and have information on file so if there are complaints, they can hand over that information to law enforcement - that would be a fraud deterrent.

But if eBay does demand more information from sellers, they need to invest in resources to make sure it goes smoothly. eBay is bound to take care of the high-volume sellers, but will they also expedite the process for low-volume sellers?

Times have changed, and the bad apples have spoiled it for the good, honest and hard-working sellers. Hopefully eBay can take a long-term approach to improving the site so situations like the ones described in today's Times will stop.

Times article: "Make me an offer: the eBay bid scam: Dealers fix online auctions with a little help from their friends" (January 28, 2007).

Comments (25) | Permalink

Readers Comments

Shill Bidding on eBay

by: Randy Smythe

Sun Jan 28 19:21:40 2007

Ina, BuySafe is really an answer here. They are a third party that does the due diligence on sellers.

Shill Bidding on eBay

by: Ina

Sun Jan 28 21:12:21 2007

BuySafe provides a very valuable service by vetting sellers and guaranteeing transactions. However, there are many low-volume sellers that would not qualify for bonding. The real balancing act for an auction site, especially for eBay, is to qualify sellers without shutting out smaller sellers who provide tremendous value to the site.

eBay certainly could have embraced BuySafe as one component of its Trust & Safety initiative. I wonder why they did not.

Shill Bidding on eBay

by: Kaydee

Mon Jan 29 08:25:20 2007

The problem here is that eBay is that they are constantly applying band-aids to deal with the symptoms instead of viewing the problem on the whole, and treating the entire illness.

With all of the bad press eBay has been getting, I have not seen them take any steps to launch a positive press campaign by releasing the MANY positive stories that happen on a daily basis on eBay.

They have never made an effort to explain to the public the measures they have taken to keep a safe trading environment with the 1, 2, 3 bidder. A simple e-mail from Bill Cobbs, to the common eBayer, just looks like spam and it isn't read. It's deleated.

In the area of counterfeits, there is a wealth of information just among many eBay sellers alone, and if eBay chooses to ignore that, then they need to look at hiring consultantst and employ some of this knowledge. By taking a less conglomerate approach by using programs, and get REAL & knowledgable people to examine individual auctions and sellers - what they will find is that counterfeits is not as wide spread of a problem as they think, it's a problem that stems from a small number of bad sellers that are flooding the market with 100's of pages of auctions with multiple selling ID's.

If eBay would take on a more human approach that people can relate to, and see an actual difference, then perhaps they would gain some ground.

Shill Bidding on eBay

by: pat

Mon Jan 29 08:25:47 2007

Ebay needs to remove the second chance offer which is nothing but another way dishonest sellers fleece the buyers. Seller has multiple items - shiller bids price way up then seller offers the 2 underbidders the item at their last bid which is an inflated, manipulated amount. Naive buyers need to be protected from themselves.

Shill Bidding on eBay

by: violette

Mon Jan 29 08:39:23 2007

As a buyer, I'd be glad to know that a seller has been vetted in some way. It increases the level of trust between the parties. As a seller, I'd be happy to participate in some sort of verification, as long as it didn't cost me. I'd also like to see something like that for buyers, as well, since there are plenty of dishonest buyers pulling all sorts of scams on honest sellers. There needs to be trust on *both* sides.

Shill Bidding on eBay

by: Sky

Mon Jan 29 08:40:49 2007

making sure sellers are fingerverified has worked for many people...your info is safe with a third party and yet you have identity online

Shill Bidding on eBay

by: Sky

Mon Jan 29 08:43:33 2007

Use FingerVerified for online ID checking. If sellers have the online ID your safe they are traceable and who they say they are. Having a third party hold your info securely really does give freedom online and many business' are now using it to securely check/verify who is who online

Shill Bidding on eBay

by: John

Mon Jan 29 09:16:23 2007

The best verification system out there that I've seen is from Bid4Assets -- they verify by credit reports before you are able to sell anything.

Shill Bidding on eBay

by: Mario

Mon Jan 29 09:57:34 2007

Shill bidding is a big problem, especially at eBay Motors, where bidders' identity is hidden now. This makes it impossible for buyers to check for it (if identities are not hidden, it's possible to check if bidder bid on seller's previous auctions, which would raise an alarm).

One way for buyers to protect themselves against shill bidding is to use sniping, which is not a problem with free sniping services around.

Shill Bidding on eBay

by: Bruno

Mon Jan 29 10:03:42 2007

I was a victim of shill bidding once - and I found it out by looking at the bidders history, and then noticed that the same bidder bid on a completely different item from the same seller very recently. Now, how likely is that that is legitimate? I did not pay and reported this to ebay.

Since then, I use sniping for large-value items. This way there is no time to conduct shill bidding.

Shill Bidding on eBay

by: Lee Berkovits

Mon Jan 29 10:28:05 2007

What is really frustrating for honest Ebayers is that Ebay refuses to listen to its sellers. The boards are ignored by Ebay personal, and complaints about dishonest sellers are either never read or read and ignored. Even sellers guilty of obvious shilling, fee gouging, and fraud are allowed to continue to operate. Very sad.

Ebay really needs to hire people who know what they are looking at, and take action against the bad sellers - even those who sell thousands of items a month.

Lee

Shill Bidding on eBay

by: Peter Leeflang

Mon Jan 29 11:50:02 2007

I disagree with any suggestions to regulate Ebay even more. In fact, more openness allows for buyers and sellers to do their own due diligence which they are primarily responsible to do anyway.

The cause for many of our present day 'seller (and buyer) trustworthiness' problems originate with Ebay making the market place more and more closed, so the contrary of what it used to be. It decreases the control buyers and sellers have in making well founded sales or purchase decisions. The latest mandatory anonimization of bidder ids, is an example of that. All these Ebay mandates are extremely patronizing, like some dictatorial government would do, and are taking away responsibility. The consequence is that everyone will be just get a more negative view of Ebay, not a more positive one.

The real role of Ebay should be not to mandate but to facilitate, to give options (or allow more third parties to provide options).

There woudl be nothing wrong with allowing third parties to guarantee for example having done a credit check on a seller and the same is valid for sellers being provided by third parties with such a facility. The reality is that Ebay doe snot have the know how to do this an dthey alos have no interest in loosing focus on their core business by going once more to doing it themselves. They are simply not qualified for that.

Good examples that third parties can be much better are visible in antiphishing functionalities in browser provided by Norton and Microsoft.

So Ebay, my advice is to back off and give the marketplace back to the users (buyers and sellers) and their third party suppliers.

Shill Bidding on eBay

by: krisihli@sbcglobal.net

Mon Jan 29 12:25:15 2007

BuySafe is a ripoff! And shill bidding is one of many problems with eBay that they just try to sweep under the carpet.

It appears that if you are a powerseller you can commit fraud on eBay and get away with it.

Shill Bidding on eBay

by: Patricia Ann

Mon Jan 29 17:53:01 2007

Ebay you need to face facts: 1) get rid of second chance offers - that's the way to protect buyers. 2) put bidder's ID's back on all auctions. 3) USE SOME OF OUR FEES to get dedicated people to flush out fraud and shill bidding. Ebay - you're reputation is so low now and all you do is milk sellers and buy companies and flush money down China's toilet! Sounds like you are now in the running for the fast buck instead of the long term. We deserve some good service for our fees and that includes cleaning up the site and bolstering your reputation so buyers will come back! Sorry, but I'm truly frustrated!

Shill Bidding on eBay

by: L Armstrong

Mon Jan 29 17:59:04 2007

I would like eBay to go back to being 'just a venue'. The notion that stupid people need to be protected from themselves is sheer foolishness. It doesn't matter if I can see who is bidding on an item. I know my area and I do my own research. If an item goes higher than I want to pay, I quit bidding. It's that simple.

Shill Bidding on eBay

by: JRenza

Mon Jan 29 18:07:59 2007

Of the many times I have reported shill bidding to eBay they have dissagreed.I have documented one sellers'auctions for two years, where the seller used three different shill bidders constantly on his auctions.
These shill bidders bid exclusively on his auctions and always under the reserve price.Under the sellers previous ID he had his secretary bid on 90% of his on line auctions.
Because I was shilled when I purchased a car from him,I decided to save the information in hard copies.
After several Negative feedbacks,he switched ID's to sell under his secretary's ID,which was the same one she used to shill his first auctions.
Ebay always disagreed and allowed this to continue.With their new hidden ID system ,this information is impossible to track . EBay's lack of adherence to their own policies makes the site less safe.
Information given to bidders,under the new system is generic and can be easily manipulated to disguise any illegal activity.The fact that it is only a 30 day record of a bidders activity paves the way for rotating shillers monthly.
Under the present guidelines for Power Sellers,depending on the level of their status,up to 6 violations a month are seemingly allowed before any action is taken.
So,is eBay protecting this activity?Are they ,in essence abetting this criminal activity? That's a question for all members to determine for themselves.
According to the threads on the Community Boards at eBay,the members are
trying to help reinstate the trust that so many feel is now gone from a venue they helped build .
Let's hope they are heard.The numbers are signifgantly small now,but I believe are a good cross section of both the buying and selling communities there.

Shill Bidding on eBay

by: Not Surprised

Tue Jan 30 17:40:26 2007

eBay is very aware of all the Fraud taking place (by SELLERS & BUYERS), Shill Bidding, Fake and/or Multiple User IDs used by individuals, and the ever failing Feedback System etc. - That's why eBay is & has made some Heavy Duty Acquisitions & Investments - (See List Below)with all the PORK FAT they have absconded from it's members (Honest or Not) - Do You think for one second that eBay really cares about your petty complaints. The eBay Auction site is slowly falling, just like the Roman Empire once did. Just a matter of time. Stay Tuned!
---------------------------------------
In July 1998, eBay acquired Cincinnati, OH based online auction site Up4Sale.com.
In May 1999, eBay acquired the online payment service Billpoint, which it shut down after acquiring PayPal.
In 1999 eBay acquired the auction house Butterfield & Butterfield, which it sold in 2002 to Bonhams.
In 1999 eBay acquired the auction house Alando for $43 million, which changed then to eBay Germany.
In June 2000 eBay acquired Half.com for $318 million, which was later integrated with the eBay Marketplace.
In December 2000 eBay acquired the Precision Buying Service portion of Deja.com.
In August, 2001, eBay acquired Mercado Libre, Lokau and iBazar, Latin American auction sites.
In July, 2002 eBay acquired PayPal, for $1.5 billion in stock.
On January 31, 2003, eBay acquired CARad.com, an auction management service for car dealers.
On July 11, 2003 eBay Inc. acquired EachNet, a leading ecommerce company in China, paying approximately $150 million in cash.
On June 22, 2004, eBay acquired all outstanding shares of Baazee.com, an Indian auction site for approximately US $50 million in cash, plus acquisition costs.
On August 13, 2004, eBay took a 25% stake in Craigslist by buying out an existing shareholder who was once a Craigslist employee.
In September 2004, eBay moved forward on its acquisition of Korean rival Internet Auction Co. (IAC), buying nearly 3 million shares of the Korean online trading company for 125,000 Korean won (about US$109) per share.
In November 2004, eBay acquired Marktplaats.nl for €225 million. This was a Dutch competitor which had an 80% market share in the Netherlands, by concentrating more on small ads than actual auctions.
On December 16, 2004, eBay acquired Rent.com for $415 million in cash (original deal was for $385 million of the amount in eBay stock plus $30 million in cash).
In May 2005, eBay acquired Gumtree, a network of UK local city classifieds sites.
On May 18, 2005, eBay acquired the Spanish classifieds site Loquo.
In June 2005, eBay acquired Shopping.com, an online comparison site for $635 million.
At the end of June 2005, eBay acquired the German language classifieds site Opus Forum.
In September 2005, eBay bought Skype, a VoIP company, for $2.6 billion in stock and cash.
In April 2006, eBay invested $2 million in the Meetup social networking site.
In April 2006, eBay acquired Tradera.com, Sweden's leading online auction-style marketplace for $48 Million.
In August 2006, eBay announced international cooperation with Google. Financial details have not been disclosed by either party.
In January 2007, eBay acquired online ticket marketplace Stubhub for $310 million

Shill Bidding on eBay

by: Frank Ross

Tue Jan 30 21:18:47 2007

I wonder if some sort of Seller Verification is in the near future? As Ina said, not all sellers can qualify for BuySafe bonding and while BuySafe is great for large scale sellers, it's overkill for smaller eBay sellers. (I don't agree that they're a ripoff as one commenter suggests). Seller verification if done correctly could be semi-transparent to buyers and should make them feel comfortable; not scare them away.

Shill Bidding on eBay

by: PhilC

Sun Feb 4 11:45:24 2007

I agree with most of the above answers and would add as a buyer and a seller Ebay could give the buyer more control as well. I have requested for 7 years that they allow buyers to block sellers they know to be dishonest but that Ebay won't do anything about. They won't do it.

Shill Bidding on eBay

by: Margaret

Tue Feb 5 13:00:28 2008

Is it possible there is a group of sellers nationwide not only selling fake or stolen merchandise but who share false buyer ID's that they all use over and over again for shill bidding and to leave themselves + feedback and to rack up + feedback numbers and percentages?

I recently got burned by a seller (thank God it was not for much). This one slipped by me in spite of the years experience I have on E-Bay.

Seller resurfaced with another user ID-I repeatedly report them to E-Bay yet it STILL does not look like they are doing anything quick enough to yank the seller before anyone else gets taken. I did the legwork for them, watched every single one of the seller's auctions, compared bidders names, compared the date that feedback was left with the auction closing date, compared writing style of former and current seller and alleged buyers (most newly registered within the last 30 days), contacted the police, contacted one of the designers whose merchandise he was selling and trying to pass on as authentic so they would all get together and do something---to no avail. New seller just got his first negative and buyer is allegding he sold her a fake. I would think that's Gross negligence on EBay's part if someone repeatedly warns you, you do nothing and another person is victimized because you failed to take effective action in a timely fashion. EFFECTIVE AND TIMELY are the key

It's simple-require those using the site (buyers and sellers) to verify their identity. Period

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