Friday, June 29, 2012

Is Shill Bidding Legal?

I was going to post a link to a "High End Barbie" auction on my Dolls for Sale Blog until I read the following disclosure:

Auction Information and Special Terms of Sale:
PLEASE READ: At the request of the auction company, this auction permits bids to be placed by the auctioneer, an employee of the auctioneer, or the seller or an agent on the seller's behalf, even if such bids are placed solely for the purpose of increasing the bid. While [Auction Site]'s Unified User Agreement prohibits this behavior, in accordance with UCC 2-328, this auction is permitted to engage in this activity by providing this clear disclosure to you, the bidder.

"... even if such [permissable] bids [by the auctioneer, an employee of the autioneer, or the seller or an agent on the seller's behalf" are placed solely for the purpose of increasing the bid."

This sounds like shill bidding to me, which I thought was illegal.

In addition to a 14% Internet buyer's premium, winners will have to pay shipping.  Unless potential bidders are enthused about 1990s Barbie's, with the exception of Wild Bunch Francie, I did not see much worth taking a chance on getting outbid by someone whose sole purpose would be to increase the bid and not to win the item.  Some of the bids that are currently at $1 might possibly receive what sounds like shill bids before the auctions end.  For this reason, I won't share the link to the site. 

I guess what happens in Vegas should stay there. 

dbg

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8 comments:

  1. Wow, that's.. sort of unreal. I'm glad you decided not to share the links as scummy sellers like that should be boycotted and ignored even if they are not actually breaking the law. (I guess it's kind of dodgy because it depends on the location of the seller or maybe the auction service? Not sure if they are all US-based and if not what laws might apply.)

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    1. This was pretty unbelieveable to me, too, Alrunia, and I am glad I read the disclosure.

      dbg

      Delete
  2. I go to live auctions from time to time for various items uncluding cars and even a house. There are people I know who are strategically placed to do this.
    I have spoken to two unknowingly who told me they would not bid against me. It was later I realized they weren't there to buy or else why not bid?

    Do you know if this is illegal offline as well? If so it is a shame because one place is a non-profit. With the house I stopped bidding then so did everyone else. The auctioneer then asked me to bid against the last bid and nobody bidded against me when I did. Live and learn.

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    1. The Grandmommy:

      The situation you described certainly sounds like shill bidding was in full effect. If not, why did the bids end when you stopped bidding? I'm glad you were not duped into continuing to bid.

      I'm not sure if shill bidding is legal or illegal in offline auctions. It may vary by jurisdiction. The best thing to do if you ever participate in an offline auction is to ask the auctioneer and, even if the answer is no, remain alert for possible shill bidders.

      dbg

      Delete
  3. Wow. That's deep. It would seem to me they could just do something like ebay does with the "reserve price not met" instead of the auctioneer bidding.

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  4. It truly bites but as long as it's disclosed they can get away with it. Most people don't read the fine print and will never know the difference.

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  5. I don't understand why folks start auctions low, if they want such and such a price. Set the blasted price to a minimum that you would find acceptable, and then hope it goes up from there.

    I have lost too many Evil Bay auctions to snipers AND to shill bidders, and I got to the point where I go for BIN sales only, because of the aggravation.

    I would be wary, too, if I saw a provision like that.

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  6. I say let them place their bid.. and then walk away. They'll be stuck with the item until the next auction is held.

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