The Internet Crime Complaint Center lists "Internet Auction" as number one, comprising 44.9% of referred complaints.
Shill bidding is the deliberate placing of auction bids without the intent to win the item. Bids are placed in an attempt to artificially drive up the price of auctioned pieces and are usually placed by the seller himself, a family member, or some other complicit partner. The advent of online auctions brought a rise in shill bidding, as technology allows for increased anonymity of bidders and sellers. Because of this, learning to spot and report shill bidding is an effective way to prevent future offenses by shill bidders, even the playing field and help bidders and auction houses avoid costly mistakes. Illegal in both live and online auctions, shill bidding can be punishable by law.
Instructions
Identify Shillers Via Accounts and Bidding Trends
1. Look at the amount of available feedback in the bidder's account. Shill bidders frequently have very little feedback, because the account is newly created for shilling purposes and transactions are rarely completed. If there is feedback, check to see who left it. If the name matches the seller's, then the bidder is likely scheming with the seller.
2. Identify which seller auctions the buyer frequents. If a bidder bids almost exclusively on the items of one or two sellers but rarely wins the auction, then he is likely a shill bidder. This is particularly evident when the items bid on belong to the same seller but are of different categories (i.e. antique jewelry and motorcycle parts.) Some auction sites allow users to conduct a "bidder search" by entering an assigned user ID. Seller names are included on each bidder's list page, so you can see which sellers he prefers.
3. Count how many retractions the bidder has. Honest auction bidders avoid retractions because they lower ratings. Shill bidders often retract bids at the last minute, because their bids were intended to lure higher bids. More than three retractions in six months should raise a red flag.
4. Note the bidding trends of a suspected shiller. If they frequently bid odd amounts like $19.99 instead of $20.00, it could indicate they are bidding only to drive up the price. A person who wants to win an auction often will not risk losing the item by one cent and would automatically round up to $20.00.
5. Use site specific tools provided for your protection. For instance, eBay offers the AuctionPix Shill Bidder Tool. Type in the item number and you are shown other items offered by the seller on which the same bidders appear.
How and Where to Report Suspected Shill Bidding
6. Auction participants should report suspected shill bidding for investigation immediately. However, to avoid falsely accusing a seller or bidder, take the time to gather your facts. When creating your report, include as much evidence as possible - user IDs, auction numbers, dates and times of specific activity and any additional details you have discovered on your own. Retain the details of your report for future use in case the authorities determine you don't have sufficient evidence. If you gather additional information, submit it with the earlier report for a more complete profile of the suspected offense.
7. If you are unsure of your auction site's reporting methods, type "shill bidding" in the site search bar and follow the instructions. The world's largest auction site, eBay, provides two primary reporting methods for filing shill-bidding complaints. The first is simply to use eBay's direct e-mail for fraud reporting, which is safeharbor@ebay.com. However, eBay has also created a process by which users can specify "shill bidding". Beside each auction item is a link that says "Report Item". Click on that and then choose "Listing Violations." Select "Fraudulent Listings" (didn't receive item, illegal seller demands, etc). Finally, select "Seller is using other accounts to inflate item price" (shill bidding.)
8. If you do not receive a reply from the auction house, or if you have reported the offense but observe repeated shill bidding from the same participants, try bringing additional attention to the situation by posting on the appropriate site forum. eBay has a forum called "Bidding Board". If enough people report the problem, chances improve for a satisfying resolution.
