eBay shill bidder gets £5,000 fine The first UK seller to be prosecuted for artificially inflating prices by bidding on his own eBay auctions has been told to pay £5,000 in fines and costs, and ordered to do 250 hours community service. Judge Peter Benson at Bradford Crown court said he would have jailed minibus firm owner Paul Barrett, 39, if his record were …
"Judge Peter Benson at Bradford Crown court said he would have jailed minibus firm owner Paul Barrett, 39, if his record were not clean and the sums of money involved had been larger, PA reports."
...just like how an attempted murderer would have got a longer sentence if it was actually murder instead?
I think that's how the law works, Mr Benson. Top marks for you.
No, because attempted murder is not murder. If he had *attempted* to steal money, he would have got an even lower sentence, because that is a different offence. Just like if this was the second time he had been convicted he would have got a higher sentence, as the judge said.
"He used the same contact details and IP address to create each account, the court heard."
"We continue to invest over £6 million every year in industry leading technology to proactively detect shill bidding."
"He was investigated by Trading Standards after a buyer complained he had been sold a clocked minibus."
If the 'industry leading technology' can't detect that the seller and bidder have the same IP address && same contact details what exactly is it doing? Am I missing something here?
it sounds like he was done for breaking the law, as in clocking the bus rather than ebay doing anything. at all. they pretty much admit their 'shill detection' either doesn't work, or they weren't using it, seeing as it took someone reporting the clocking to the coppers for him to be detected.
but then don't they make their money by taking a cut of the selling price? -not really in their interests to keep it low then it would seem.
So, are you admitting to shill bidding for your wife or saying that eBay not detecting you and your wife have the same details means that their anti-shill bidding software is working?
I think what is being said is that if two people with the same IP address, email address, IP address or (especially) PayPay account bid on each other's auctions then that has to be grounds for some kind of suspicion.
Nothing wrong with having two accounts with the same details (assuming it's not against the Ts&Cs) -- but using them for financial gain is likely to be illegal.
But presumably you and your wife don't outbid each other on the same items, unless you have a particularly competitive relationship going there...
I fail to see how even the most basic of checks, if in place, would fail to match IP address, followed by real world address, in order to flag up the bidding as suspicious.
Detection of the buyer and seller have same IP address is in itself not suspicious -- there are valid cases, such as being behind a firewall, where eBay detects the firewall IP and not the IP of the PC -- this is typically what happens when you are at work, or how AOL used to operate (all AOL users had the same external IP).
What I don't understand is that this guy used the same home address for both accounts -- that should have set off some bells -- but hey, it's only eBay.
I love the excuses that this guy gave. Apparently he didn't know it was against ebay's rules and indeed the law to bid on your own items or leave feedback for yourself. But, hang on, didn't bother reading the rules when he signed up? Even though in clicking that last button you state that you have read the rules.
F**kwit.
No dude, you got it all wrong.
That little "I agree" tickbox that you have to actually tick... well, it no longer can be implied that you do agree, or actually understood what you're agreeing to, or even if need your nappy changed in amongst all this drool-happy clicky-pointy-look-at-the-pretty-pictures that just "happens" to sign you up to eBay and just "happens" to put your stuff online and just "happens" to have you bidding against yourself. It's all a total coincidence, and that "I agree" thing? Don't mean anything, does it?
[re: http://www.theregister.co.uk/2010/06/21/fsa_contract_guidance/ ]
The guy was only caught because someone complained that they bought a clocked mini bus. But Ebay claim this shows how seriously they consider the practice? And they invested £6 million every year in inductry leading technology, which didn't seemingly pick up on the same IP address and contact details.
Sounds like Ebay trying to get some PR off the back of the case. Surely if they were so shit hot, they would have picked up on the fella, before the consumer with the clocked minibus.
Seems to me they are happy to turn a blind eye maybe?
Yeah, that was what I was getting at. I think they just turn a blind eye until someone cottons on, and then they say they are all over stuff like this.
As many have pointed out, a simple check on IP address and contact details of competing bidders should have flagged this up. So what are they spending the £6 million per year on?
Madness!
From the eBay Q&A: "If the item sells, you are charged a Final Value Fee. The Final Value Fee is based on the final amount the item sells for."
In other words: The more it sells for, the more they get paid.
In other, other words: It's very much in their best interests to turn a blind eye to any devious or underhand practices designed to jack up the sale price.
In other, other, other words: You can bet your bum that any industry leading fraud detection cobblers they may shout about exists purely as a figleaf to ward off any pesky "aiding and abetting" charges that might otherwise come their way.
As I recall, his defence was that he didn't realise shill bidding was illegal. I'll be honest, I didn't know this until reading this case.
Seems a rather crazy law to me. Granted it's not very nice (and I'm sure has happened to me), but you choose to keep bidding up to the artificially high price...
The practice of taking a bid "off the wall" is well documented (just google for it) and appears to be considered acceptable practice in real life. If you've been to more than one or two auctions, you've probably experienced it - though you may not have realised it. Quite how that is different from someone bidding up their own items escapes me - except that one is illegal and the other widespread.
In that case I can well understand how a defence of not knowing it's illegal could be made and I would think that a half-decent lawyer could make a very convincing argument about it.
Yes, it's part of the Fraud Act 2006. Given how recent the law is, I really think a defence of "I didn't know" is quite a good one. Using me as the yardstick, I didn't know.
Interestingly, I can't find any evidence of it being illegal in "real" auctions, which @pete 2 alludes to. I find that very very odd indeed.
is totally legal in normal auctions : the auctioneer bids on behalf of the vendor, *if* the item is below the reserve price - because if the auction starts below the reserve price, and if only 1 person is bidding on it, the price would otherwise never get to the reserve.
So (IANAL but) I reckon you would have a legal defense if you had a reserve price on your ebay items.
What about the ebay policy to just refund the purchase price and dock the sellers account if the seller can not prove actual delivery?
EBay does not even warn sellers of this policy for international sales. And proof of delivery on international shipments can be expensive even when it is an option.
Shilling is a problem. And few sellers are a stupid as this guy. But, if is not the only problem that eBay does not solve.
problem. I have spotted the same vehicle advertised by "different" people several times.
I can only suppose that the practice of bidding-up the price is common as well.
Leaving bad feedback is getting hard to do, you have to wait a week now.....and even then it seems that sellers with poor feedback just change name....
The Arthur-Daleys seem to have deserted the back streets in favour of ebay.
Want a car mister ?
Don't use ebay !
I'd be interested to hear how many people have had the experience of bidding for something, being beaten into second place and then being contacted by the seller to say that the winner has backed out / was a time waster and would I still be interested?
I wonder if EBay would, and should be interested in such cases for special scrutiny.
I have just "sold" two mobile phones, both of which the top bidders after buying decided not to buy as:
1. "My teenage son bid on this item as he was cross we wouldn't buy him one and actually I don't have the money"
2. "My girlfriend has just had an accident and gone into hospital and the phone was for her and so now I will not be buying it" (after several days of prevarication over paying for it)!
In both cases I was left to offer the phones to the other bidders who -by the time the winning bidders got round to admitting they had no intention of honouring their bids- had already bought elsewhere meaning I now have to relist them from scratch!
Not everyone offering second chance offers are shilling, many will have been screwed around by timewasters (like in my case).
Personally I will not sell anything of over £50 value on e-bay after my recent experiences.
I usually don't buy from sellers doing this and would pay a higher price to some other seller or take the Buy It Now option. The problem is Ebay actually proving it to take any action. As so many commentards have pointed out, he was an idiot to be found out - proving that this is common practice but most are able to hide their tracks a bit better.
I'm sorry, how is it that eBay's superb anti-fraud processes failed to spot this? It's one thing for multiple accounts to be opened from one IP, but all with the same contact details? And only bidding on an item from one of the other accounts in the group after a 'foreign' bid?
It is simple enough to create 'pools' of accounts based on individual account criteria - IP address used for registration, username, email address, post code, phone number... use fuzzy techniques to ignore minor changes where necessary. Identify accounts that appear in two or more groups, then write some alorithms to spot bids placed from one to another but only after a third party bid. Flag these for investigation, again looking at where the item was listed from and where all the bids come from.
This will spot probably 75% of lazy shills who can't hop around from IP to IP to list and place bids.
That's £15k consultancy fees, thank you.
I didn't know this was illegal. I've often done it myself with my girlfriend, as it costs money on ebay to set a reserve. Pretty sure I'm not the only one, and personally I don't consider it to be wrong, as its the other bidders choice if he continues to bid at the higher price.
Theres something wrong with the law when the guy gets fined £5000 and 250 hours community service, when its pretty likely he would have got off with less for a serious physical assault. eg:
http://www.thisislondon.co.uk/standard/article-23771123-girl-trawled-networking-site-to-track-down-the-attacker-who-glassed-her.do
Maybe someone who IS a lawyer could explain what law exactly has been broken, rather than just the say so of an ebay spokesperson, who, like most company types, will say whatever they're paid to say.
Or is the ebay reference irrelevant to the whole story and he'd have got a 5000 pound fine & 250 hours if he'd sold the vehicle on Autotrader?
If it really IS illegal (and no one here has claimed to have been aware of such a law), does that mean that someone using gazumping to maximise the sale price is also illegal?
It's not even similar you numpty.
Gazumping is where a buyer has made an offer and had it accepted then, before contracts are signed and exchanged somebody else comes along and makes a higher offer. IOW it's like being outbid by another buyer and there's an easy way to deal with that: bid higher. OK it's not nice, it shouldn't really happen but if you were a sensible buyer you made your offer in writing and got the acceptance in writing. That way you have a letter of intent which amounts to a contract, up to a point. That point being that certain conditions of the sale are met.
Shill bidding is like fake gazumping, that is to say inventing a higher offer in order to try to get your buyer to raise their offer. This is clearly fraudulent and is a crime.
I am a lawyer. This is English law, so does not apply elsewhere. It is not advice and should not be relied on without consultation with a solicitor on your own circumstances.
At law, there is usually nothing wrong with bidding on your own auction provided that you make it clear in the auction conditions that your right to bid on your own item is reserved. The right is specifically reserved in land transactions by the Sale of Land by Auction Act 1867, but is of general application.
In this case though, there cannot be a reservation because it is against the auctioneer's rules to bid on your own item. In that case, as mentioned above, the Fraud Act comes into play. For what it's worth it would have been unlawful at common law prior to the Fraud Act coming into force, but that's not relevant to this situation. Section 1(1) provides that "A person is guilty of fraud if he is in breach of any of the sections listed in subsection (2)." Section 2(1) states "A person is in breach of this section if he—
(a)dishonestly makes a false representation, and
(b)intends, by making the representation—
(i)to make a gain for himself or another, or
(ii)to cause loss to another or to expose another to a risk of loss."
A bid is a representation to the auctioneer and to other bidders, and therefore the bid is a fraud under the Act. There are other ways that this behaviour could be fraudulent too.
As for making offers on property in writing and getting written acceptance, that can amount to a contract, but I would not advise any buyer to do this. At the time of the offer, there will usually have been no investigation of title, or searches to ensure that the property is one you relly want to buy. So you might find that you are contractually bound to buy a property with subsidence, next to a planned 6 lane motorway and the seller doesn't have absolute title to the land.
" As for making offers on property in writing and getting written acceptance, that can amount to a contract, but I would not advise any buyer to do this. At the time of the offer, there will usually have been no investigation of title, or searches to ensure that the property is one you relly want to buy. So you might find that you are contractually bound to buy a property with subsidence, next to a planned 6 lane motorway and the seller doesn't have absolute title to the land."
A lawyer you may be but you clearly don't deal in property since any letter of offer should contain conditions on the offer, for example that the offer is subject to investigation of the title, searches etc. etc. as any solicitor who deals in property will tell you. Nobody with any common sense would simply bang out a letter saying "I will pay you £X for your house." Indeed the solicitor simply handed me a form letter on my first house purchase where you filled in names addresses and amounts and contained conditions including the above and a couple more and also that the offer was subject to a mortgage being secured. Quite a neat thing and it was rolled into the price he charged me for the whole deal. Twenty odd years later I'm still using the same wording. Get a letter in reply simply saying that the seller accepts the offer and should you get gazumped you have the seller for breach of contract at the very least.
From the fact that it was twenty odd years ago you may have noticed that that particular transaction took place in the days when gazumping was big news and big business.
"Pretty sure I'm not the only one, and personally I don't consider it to be wrong, as its the other bidders choice if he continues to bid at the higher price."
Ah, but you're not giving the other bidder a true and fair reflection of how the auction is progressing. Having the final sale price pushed up by other genuine bids is one thing, but having it pushed up just because the seller wanted to make more money whilst evading the additional eBay fees required to set a reserve or a more realistic starting price is quite another.
Shill bidding artificially increases the perceived value of an item by making it appear more desirable than it actually is, so whilst it's true to say that the winning bidder only won because they chose to bid up to the winning price, it's completely wrong to assume they would have been prepared to bid that highly if they knew no-one else was genuinely interested in the item.
I would assume that most shill bidders simply get there friends to put shill bids on an item, use a proxy to place bids or even an place bifs from an there mobile or old dial up account. As ebay makes most of its cash from final value fees and then paypal fees ontop of that they want the items to sell at the highest prices possible so probably don't go out of there way to deter it.
To be honest ebay is seriously flawed these days, the ability for people to leave sellers negative feedback simply because they don't like the item they have bought with no come back, the limited payment methods that can be offered when selling an item, and the detailed seller rating which penalise anything but a 5 out of 5 ratings as poor. Its about time someone came up with a viable alternative
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