So I think I got caught a Ebay seller in the act of Shilling! There
was a drill press for sale in the town I live in that I went on-site
to inspect. While there the seller mentioned he put on bid in for
$25. I quietly took note of this. Now today, with seconds to go the
same user account that made the inital bid of 25 places a much higher
bid. I ended up winning the item due to a high proxy bid, but it
looks like he did not want to let that drill press go for the $37.00
my bid would have won it for. Instead he drove the price up to $73.
I've sent him an email asking for his insight onto this and will
report it to ebay. I'd like to see if he reply's and comes clean on
his own. Any thoughts?
He probably won't, and in any case, you owe it to the rest of eBay's
community to report him to SafeHarbor. At a very minimum, if you are
sure of what you say, comment on same in the feedback for this auction.
SafeHarbor will, if presented what you've said here, most likely look
at this and his other auctions to see if there is a pattern, and will
On 11 Nov 2004 18:55:19 GMT, firstname.lastname@example.orgEDY (Tom) wrote:
A seller bidding on their own auction is, in the U.S. at least, a
crime and you can do time for it. Sellers who do that are thieves and
should be pointed out as such.
On Fri, 12 Nov 2004 16:19:31 +0000, email@example.com (Robert
Actually, it is a matter of state law/regulation. (Some states regulate
auctions in some detail by code, others by general law and then by
regulation, I vaguely recall.) I can't say it is this in every state, but
in most IME. Don't have time now to look one up, but you can try
findlaw.com or many state websites -- e.g., www.ca.gov -- for actual code
language. -- Igor
I've looked in a number of states. Can't find anything that resembles
a blanket prohibition on the seller bidding.
Foreclosure auctions usually include a notice that the seller (the lender)
"reserves the right to bid, in it's own name"
'Partition' auctions -- where the joint owners can't agree on a buy-out,
usually have the owners, individually, bidding against each other, and/or
any other prospective purchasers.
Either of those situations would indicate that there is *not* any such
On Sat, 13 Nov 2004 08:40:12 +0000, firstname.lastname@example.org
(Robert Bonomi) wrote:
Sellers can always bid - as long as they do it in their own name and
publicly. It is shill bidding, where the seller has someone else bid
for him or bids (on the internet) under an assumed name that is
On Sat, 13 Nov 2004 08:40:12 +0000, email@example.com (Robert
For someone who seems determined to have an argument, you might want to do
a little better job at research.
1. The fact that in foreclosure auctions there is the reference you found
to a self-bidding exception indicates (or suggests, if you wish) that
self-bidding is not otherwise allowed unless excepted. So, you got that
"absolutely" wrong. Statutory construction 101.
The deal here is that an auction such as ebay's is a holding out for sale
by open bid. If the owner self-bids or employs someone else to bid as a
shill, then the item is not truly being held out for sale by open bid.
Not enough for you? Then continue reading ...
2. I gave you a link to the California site. And, I believe that ebay is
governed by CA law because it is located there, though I may be wrong about
that - and you can check their cite. Anyway, here is what I found at
"CALIFORNIA CODE, CIVIL CODE, SECTION 1812.601
"(b) 'Auction' means a sale transaction conducted by means of oral
or written exchanges between an auctioneer and the members of his or
her audience, which exchanges consist of a series of invitations for
offers for the purchase of goods made by the auctioneer and offers to
purchase made by members of the audience and culminate in the
acceptance by the auctioneer of the highest or most favorable offer
made by a member of the participating audience."
"audience" does not include owners or shills, even if they are "in the
audience" - difference between vulgar English (look up "vulgar") and
legalese. Rather, they are "owners" and "agents".
Still not enough? Then say, "Please sir, may I have another?" and get
ready to be spanked again.
3. Here ya go:
"CALIFORNIA CODE, CIVIL CODE, SECTION 1812.608
"In addition to other requirements and prohibitions of
this title, it is a violation of this title for any person to do any
of the following:
"(h) Cause or allow any person to bid at a sale for the sole
purpose of increasing the bid on any item or items being sold by the
auctioneer, except as authorized by Section 2328 of the Commercial
Code or by this title. A violation of this subdivision includes, but
is not limited to, either of the following:
"(1) Stating any increased bid greater than that offered by the
last highest bidder when, in fact, no person has made such a bid.
"(2) Allowing the owner, consignor, or agent thereof, of any item
or items to bid on the item or items, without disclosing to the
audience that the owner, consignor, or agent thereof has reserved the
right to so bid.
"A violation of this subdivision is an infraction subject to a fine
of one hundred dollars ($100)."
3. If you need more, let me know and I'll send you a fee schedule. -- Igor
Illiterate, incompetent, and incoherent.
_If_ an 'exception' exists, it proves conclusively that there is *no*
'absolute', or 'blanket' prohibition.
_That_ is covered in 'Introductory Logic', which you apparently missed.
I disputed a claim that is is _never_ allowable to bid on your own item.
That is _not_ to say that is _always_ allowable to bid on your own item.o
!(always forbidden) ==> sometimes acceptable
Spurious arguments claiming 'always acceptable' to be a fallacious claim,
while accurate, shows a lack of comprehension. Or a deliberate, premeditated
attempt to erect a 'straw man'.
Suggest you re-read, for comprehension, the actual posting I questioned.
A _blanket_ claim that *any* bidding by a seller on his own item was a
criminal act, and could get the seller/bidder sent 'up the river.'
I was *not* questioning that _under_some_conditions_ that it could be a
proscribed act. I was questioning the claim that *any* time a seller bid
on his own item, that it was _automatically_ a crime.
Such a vehement argument -- in which you *totally* support _my_ original
assertation: A seller bidding on his own item is *not* automatically in
violation of the law. A seller bidding on his own item, _may_ *under*some*
*circumstances* be in violation of the law.
The specific post that I questioned, stated _without_qualification_ that if
a seller bid on his own item, it was a criminal act.
You have provided conclusive evidence that such is _not_ the case.
P.S. If your usually that snotty when you're having an "agreement" with
somebody, you must be hell to be around, when somebody disagrees with
They were indicted on and plead guilty to both wire and mail fraud for the
shill bidding. Each fraud count carries up to 5 years in the slammer.
I'm not a lawyer, but I'm guessing they were prosecuted under Title 18, Part
1, Chapter 47, Section 1030.4 of the US Criminal Code, which states
"Whoever ... knowingly and with intent to defraud, accesses a protected
computer without authorization, or exceeds authorized access, and by means
of such conduct furthers the intended fraud and obtains anything of value,
unless the object of the fraud and the thing obtained consists only of the
use of the computer and the value of such use is not more than $5,000 in any
1-year period ... shall be punished as provided in subsection (c) of this
definitely *not* 18 USC 1030 -- that crime is "_unauthorized_ access to a
federal interest computer system".
More likely 18 USC 1341 (mail fraud), and 1343 (wire fraud), since that's
what it *says* they were charged with. <grin>
These guys were engaged in fraud in the first place, and part of the
implementation of that fraud was the bidding under _false_ identities,
*concealing* the fact that they were bidding on their items.
I do not accept that _any_ bidding by the owner of an item is automatically
Almost any 'partition' legal action -- when the *joint*owners* of an item
(typically real-estate, but can be _anything_) cannot agree on a course of
action, nor on a buy-out price -- will result in a court-sanctioned auction
of the item involved. The owners *are* free to _openly_ bid against each
other and any other 'interested party'.
Similarly in a 'foreclosure' auction, the 'secured party' (the seller),
invariably "reserves the right to bid on it's own behalf" at the auction.
On Fri, 12 Nov 2004 16:19:31 +0000, firstname.lastname@example.org
(Robert Bonomi) wrote:
Nope, but several years ago I sat on a Federal grand jury and we
brought indictments in two bid-rigging cases. One was collusion to not
bid to keep the price low, one was shill bidding at an open auction
(think estate auction). In both cases we brought bills to indict, but
I don't know the ultimate resolution of the cases.
I can't speak for all states, but under federal statues there is (or
at least was then) a law that specifically banned shill bidding. Think
about it - if either the seller or the auctioneer (who is paid based
on the selling bid) can place bids they can run the price up fast and
artificially inflate the selling price. It is fraud because *they are
not really bidding to buy* so they cannot lose, they simply keep
running the price up until they get what they want. If they happen to
win the auction no money changes hands, the item simply has to be
I _can't_ find it.
The United States Criminal Code is 'Title 18'.
The word 'auction' does not appear *anywhere* in that title.
The word 'shill' does not appear *anywhere* in that title.
The word 'bid', or 'bidding' appears three times,
once in relation to post office contracts
once in relation to 'public lands'
once in relation to contractor offers on public works projects.
Feel free to rummage at <http://www.law.cornell.edu/uscode/18/ to see if
you can find what I missed. Note: *repealed* sections of the Code are
_also_ present, but you have to check them individually.
I _will_ believe that *some* bidding by an item owner may qualify as a form
I do *NOT* believe that _any_ bid by an item owner is automatically a
crime. (more on this below.)
Auctioneers _always_ do that, by manipulating the 'next bid' increment
that they ask for. If they see lots of bid offers when they're asking
for a particular price, they will increase the step they ask for, for
the next bid. I've seen bidding go $100, $200, $500, $1000, $3000.
I've also seen the bidding go: $5, $6, $7, (from the floor: $30), dead silence.
"$31?" "$31?" Sold!
Actually, I _did_ it -- as the bidder -- in that last case. 'market' value
was around $90, and the rest of the room wasn't knowledgeable in that area.
However, they *were* _very_ prone to fall into 'auction fever' and run the
price of _anything_ up way over anything rational. So, I pre-empted, before
the 'rush' got started. *grin*
*NOT* true, if the _seller_ is the one who bids. If the seller ends up as the
high-bidder, The seller owes the auctioneer his 'commission' on the auction.
No commission is due if the item does not sell. With the commission ranging
from 10% to 20+% of the 'selling' price, this is a _serious_ dis-incentive for
the owner to bid, 'just to run the price up'.
I am _entirely_ willing to believe that *under*some*circumstances*, the owner
bidding on his own item may constitute a form of fraud.
I *DO*NOT* accept that _any_ bidding by the owner automatically constitutes
an illegal action.
There are too many 'foreclosure' auctions, where the property owner (the lender)
"reserves the right to bid on the property on it's own behalf",
There are too many auctions resulting from 'partition' lawsuits, where the
(joint) owners are, *individually*, bidding on their property -- against
each other and/or any other prospective buyers.
On Sat, 13 Nov 2004 07:59:31 +0000, email@example.com
(Robert Bonomi) wrote:
I actually do that a lot on e-bay. It works there as well as anywhere.
When people see 5 essentially identical auctions and one has a current
bid that is much higher than the others they will avoid that one. Even
the snipers seem to skip them.
As I pointed out elsewhere, it is only illegal if you use a shill.
Sorry I didn't make that clear the first time around. Collusion (bid
rigging) and shill bidding are the two types of auction fraud that are
criminal in nature as far as I know.
Bid rigging is effectively impossible on e-bay, but is actually fairly
common in courthouse steps property auctions. Two or three investors
will get together and decide who gets what property and each one will
only bid on the one they are supposed to get. In small towns where
there may only be a couple of qualified bidders it seems to be most
prevalent, since it will obviously only work if *all* the potential
bidders are in on the fix.
Shill bidding is probably more common on e-bay than most people think,
since it is very easy to create multiple accounts. The danger, as you
pointed out, is that you get stuck winning the auction. What most will
do under those circumstances is cancel the auction and run it again,
which allows them to avoid paying the e-bay fees. They may also do the
"second chance" thing (or whatever it is called) where they can offer
it to the second highest bidder, claiming the high bidder refused to
Interesting strategy. I'll make a note to look for that.
Although it seems that might sometimes be hard to do, since the proxy
system will only enter a current bid one increment over the previous
My opinionated book reviews on sales topics
Only works if someone else is essentially doing the same thing and you
have a higher maximum than they do (usually easy early in an auction).
The point is to simply get the bid up to where it no longer looks like
a "hot deal that everyone else missed".
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