Most eBay auctions are honest and fairly conducted but some sellers adopt the technique of bidding up the price by placing shill bids using a false identity. It is important to bear in mind that the seller may bid against you so that he, the seller, gets a higher price.
Warning signs. You are just outbid in a contested auction dominated by one other bidder and quickly receive a Second Chance Offer from the seller. These offers are used by sellers if the original winning bidder fails to complete the sale.Be very suspicious if the offer arrives sooner than normal seller/buyer negotiations would take.However, one must bear in mind that the seller made just one bid too many and won his own auction! His only escape is to sell to the underbidder - YOU. Without this bidding tactic you would now be paying much less - you have been defrauded. You may chose to pay because you are getting an item you want at a price you were prepared to pay, albeit your absolute maximum. Alternatively, you can refuse the offer and leave the seller with listing fees, sales fees and NO sale. Serves him right, I hear you all chorus!
But what we all need are early warning signs during the auction that we arebeing bid up. Be wary of the bidder who bids against you in minimum increments made at different times. What he is looking for is a sequence such as:
You: 10.00 Fraudster: 11.00 You: 12.00 Fraudster:13.00 You: 13.11 This last bid of less than the minimum increment is obviously your top limit and it allows the bidder up to cease bidding and leaving you as the winner, or anyone else who cares to bid, and he is 3.11 better off! Consider whether you should change your bidding style. The fractional increment bidmay best used at the very end of an auction where there are only seconds left to go. If you leave a fractional increment bid as an early bid, you are advertising to the world that one more bid will beat you!
eBayers often have more than one identity, but 2nd and 3rd identities usually have low feedback scores because their existence is notto win auctions but to push up the price. For "Reasons of Security" eBay have made it much more difficult to check these identities. No longer is the bidder's identity and feedback accessible via the List of Bidders. Anonymity is assured as identity is obscured behind the vagueness of BIDDER 1 or BIDDER 4. The only warning is the absence of a coloured star. 10 positive feedbacks are required to gain the minimum yellow star. You won't be able to access the bidder's buying history by clicking on the bidder in the list of bidders. However, youcan access information on the winning bidder alone by clicking the winning bidder on the listing screen. Pay particular attention to the percentage of bids with this seller.If this figure exceeds 20% then one really has to suspect that there is some form of collusion between Bidder and Seller. If the shill bidder is making bids to bid up the auction but never achieves winning bidder status, the tell-tale information is not disclosed to you.
Suggested Defence against the Fraudulent Bidder: If you have the time, bid early, and make your 1st bid a minimum bid and await developments. If the auction appears to develop along normal lines then re-enter the auction with confidence. However, if the next bid is from a low feedback bidder, then it may be a shill bid from the seller who is now surprised to be winning his own auction having advanced the bidding by the minimum. His winning bidder status also gives you the chance to examine his bidding pattern. However, most importantly, you have established in his mind that your next bid may again be a minimum, and he shills you at his own risk. If your next bid is at your intended proxy level you stand less chance of being bid up. Never bid the minimum, have a rethink, then rebid raising your maximum bid. The bid count will now be 2 with only 1 bidder. You are advertising to all that you can be shilled at least once!
The following auction is fairly typical and would raise no suspicions unlessyou receive a 2nd Chance Offer two days later offering you the goods for 39.00. Has the shill bid you up from 34.00? If you feel that you have been shilled, turn down the offer. Alternatively, you could e-mail the seller offering the 34.00 that the auction had reached before the activities of BIDDER 3 bid up the auction.
BIDDER 3 (shill?) 40.00
BIDDER 1(you)39.00
BIDDER 3 (shill?) 38.00
BIDDER 3 (shill?) 37.00
BIDDER 3 (shill?) 36.00
BIDDER3 (shill?) 35.00
BIDDER1(you)34.00
BIDDER 2 27.00
BIDDER 1 (you) 20.00
It is much to be regreted that eBay have introduced the anonymity of showing only Bidder Numbers because it was previously much easier to spot a shill by following his previous bidding history. Unfortunately it is in eBay's interest for the shill bidder to prosper because the result is higher selling prices and therefore higher fee income.eBay's defence is that it prevents underbidders from being contacted outwith the normal bidding channels but that, of course, is a further loss of revenue to eBay.I am not suggesting that eBay is in any way condoning shill bidding but in this respect they are putting their interests before bidders.
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