Fraudulent bidding on e Bay (long)
Hojo2x
shill bidding on a painting. But the practice is just as likely to be
happening with musical instruments sold on eBay, as well.
whm
In Online Auctions, Rings of Bidders
By JUDITH H. DOBRZYNSKI
When eBay, the Internet auction company, suspended the seller and voided the
sale of a vivid abstract painting whose price shot from 25 cents to $135,805
last month, his offense had nothing to do with the authenticity of the painting
or the story he invented to go with the work.
Rather, the seller, Kenneth A. Walton, had entered a bid of $4,500 on his own
offering -- a practice known as shill bidding -- on the second day of a 10-day
auction, long before speculation that the painting might be by the renowned
artist Richard Diebenkorn sent the price soaring.
But a close analysis of that and other eBay art auctions reveals that the
flourishing cyberauction world faces a deeper, more intransigent problem than
lone self-bidders: the prospect of rings of shill bidders, acting as partners.
Mr. Walton, a Sacramento lawyer who used at least five Internet names selling
and buying on eBay, appears to be just one of a circle of people who have
engaged in cross-bidding activities that may have influenced the outcome of
eBay auctions.
Starting with the list of people who bid in the $135,805 auction, and with the
help of upset eBay users, The New York Times researched eBay's auction records
and assembled a list of 33 Internet names that repeatedly bid on one another's
offerings. The participants also encouraged other bidders by posting glowing
testimonials to one another on eBay's vaunted feedback system, the comment
forum where people write about their experiences dealing with other individuals
on the site.
This week, after using proprietary software called "shill hunter" to review the
list, eBay said it planned to warn two of the names and noted that 13 of them
-- including Mr. Walton's -- had been suspended after the company's own
investigations.
EBay declined to disclose why, citing privacy concerns. But that makes 15 user
names that have been disciplined in the wake of the canceled auction.
No one knows how many rings are operating in the online auction world -- or,
for that matter, in the traditional auction world, where the practice is
generally considered illegal under business codes and many state laws.
But critics of eBay contend that the company's screening system is not fine
enough to detect all ring-bidding.
The company acknowledged that it reviewed bids made only in the last 30 days,
which may not be long enough to discern shillers who spread out their false
bids.
It also conceded that those in the circle may have changed their bidding
patterns in recent weeks, lying low to avoid attracting attention once Mr.
Walton's auction began making headlines May 9.
Indeed, experts in the art world, academia and law enforcement say, the fact
that the circle surrounding Mr. Walton would not have come to light without the
media glare illustrates just how easy it is for people acting in concert to fly
beneath the devices eBay uses to root out rigged bidding.
"We look for rings," said Robert Chesnut, eBay's associate general counsel. "We
have detected rings. But there is a limit to shill hunter. And there are things
that look like shill bidding that are not." EBay will not divulge how many
people it has expelled for shill bidding.
One thing is certain: Every day the opportunity for shilling grows. This year,
sales in consumer-based online auctions in the United States are expected to
more than double, to $6.4 billion, up from $3 billion in 1999, according to
Jupiter Communications, a research company. EBay's share of the market -- more
than 90 percent, Jupiter says -- dwarfs that of Yahoo, Amazon and other rivals.
At last count eBay had 12.6 million registered users. On any given day they
place 1,000 bids a minute on the more than 4.5 million items up for sale. EBay,
whose revenue is expected to double this year, to $400 million, views the
transactions on its site as private: it does not vet the offerings or
descriptions, though it does try to remove outright frauds.
Though eBay explicitly forbids shill bidding, company officials say they
recognize that there will always a few bad apples in such a large community.
And nothing in eBay's rules prevents a person from using more than one Internet
name. Nothing prevents friends from bidding on one another's offerings, running
up the price, so long as the bid is sincere. Nothing prevents friends from
posting nice comments about one another. It was only on March 1 that eBay began
requiring those feedback comments to be related to actual transactions.
While online auctions are thus ripe for manipulation, tracing possible bidding
collusion is extremely difficult. It involves sifting through and
cross-referencing dozens of bidding histories and user feedback records, hours
of work.
"This is Joe Public," said Delores Gardner, a lawyer who specializes in
Internet fraud at the Federal Trade Commission. "I'm not convinced that many
people are sophisticated enough to detect shill bidding. It takes a lot of
work, and it's not the type of work that a buyer should have to do." Most
complaints to the commission have been about shoddy merchandise or failure to
deliver the goods, not about bidding shenanigans.
--------------------------------------------------------------------------
------
In the eyes of some bidders, online auctions are hoaxes waiting to happen.
--------------------------------------------------------------------------
------
EBay, citing cost considerations and storage capacity, removes auction records
from its site after 30 days, which makes detection harder. And even while a
bidding history is available, the bid list discloses only the highest offer
entered by each Internet name, which sometimes masks the progress of bids. Mr.
Walton's painting, for example, drew 95 bids, but the bid history contains just
17 names, and prices on it leap from $7,701, entered by "animationconnection"
on May 4, to $135,505, entered by "howdyhi" on May 7.
Exactly what happened in between is now a mystery, one that provokes other
questions about the bidding of people using Internet names that include
"birdaroo," "artpro," "w." and Mr. Walton's own "golfpoorly," "advice,"
"grecescu" and "cheesesix." (He has not disclosed his additional names.) Along
with several others, these names have regularly bid on one another's items but
have rarely placed the winning bid, and they have patted each other on the back
in feedback.
Of the 17 bidders on Mr. Walton's $135,805 painting, at least six -- in
addition to Mr. Walton himself -- had bid on but not purchased the 36 other
offerings he had placed for sale on eBay in the 30 days before his now canceled
sale.
At least three of those six had already paid tribute to Mr. Walton on his
feedback page. And that tally does not include Mr. Walton, who after buying a
$2 CD from himself under a different Internet name commented that he was
charged less than expected for shipping and called himself "a really cool guy."
During 1999 and early this year, Mr. Walton wrote equally flattering
testimonials for five of the 17 bidders (four others plus himself). And seven
of the 17 bidders have received positive feedback from several buyers and
sellers who have links with Mr. Walton and with one another in other recent
eBay auctions.
Some overlap is coincidental. It is in fact inevitable, because buyers and
sellers who are interested in one kind of item, like paintings, will gravitate
to those offerings, which are made again and again by the same sellers. Some
buyers prefer to do repeat business with sellers simply because they know that
those sellers deliver.
But if the extent of the overlap seems remarkable in this and similar cases,
eBay disagrees. "Sometimes bidding just looks suspicious," Mr. Chesnut said,
"especially in areas of collecting that are narrow, where of course you'll be
bidding in the same area."
He recounted the tale of a judge the company bounced for shilling who was
indignant about the false accusation. "I could give you a half dozen other
examples where we accused people of shill bidding falsely, and they were
outraged," he said. "The evidence was circumstantial."
Yet in the eyes of some bidders, online auctions, under the current rules, are
hoaxes waiting to happen. Mr. Walton's offering simply brought to a head
complaints many say they have already made to the company.
"EBay has created a monster that has grown beyond its capacity to monitor and
to police the misdeeds of some very simple kinds of fraud out there," said
Louis Richman, the financial editor of Consumer Reports. Mr. Richman, who
believes that shill bidding and misrepresentation occur frequently online, said
that his magazine had no statistics about them but was designing a research
project to study online auctions systematically.
When the stakes are small -- the average eBay sale is about $40 -- the harm may
be minimal, certainly too small for prosecutors to bother with. But a man who
bid more than $126,000 on Mr. Walton's abstract painting, and who said that
after spending a week researching Diebenkorn he had asked friends and relatives
to chip in another $125,000 if he needed it to win, feels lucky to have escaped
without mortgaging his life. (The painting's authenticity remains unclear.)
The man, a resident of the San Francisco Bay area who insisted on anonymity
because he feared retaliation from eBay devotees, withdrew his bid after Mr.
Walton refused to let him see the painting in person.
This bidder placed an offer of $126,200 at 2:30 a.m. on May 7, about 42 hours
before the bidding was to close. Then he went to bed. "By the time I got up, I
had already been outbid," he said. He bid a little more, but when "howdyhi"
suddenly "came out of nowhere" and upped the ante to $135,505 he decided he had
to see the painting before going higher.
eBay
Speculation that this painting might be a 1952 work by Richard Diebenkorn
pushed up the price it fetched on eBay.
--------------------------------------------------------------------------
------
"Howdyhi," whose real name is Mark Therrell and who lives in Placerville,
Calif., about 50 miles from Mr. Walton's home in Sacramento, did not respond to
an e-mail message and could not be reached by phone.
Among the early bidders in this auction were several whose names regularly turn
up, often in succession or nearly so, on other offerings by a small circle of
sellers.
On May 2 Mr. Walton, using the name "advice," put what he called an
"outstanding estate oil -- Arabs on Horseback" up for sale. Among the bidders,
17 in all, were "odona," "astheworldturns," "artpro," "1ackley" and "jgle," the
last four in succession, according to the posted bid history. Mr. Walton, using
the name "grecescu," also bid on the item, but that bid was canceled by eBay on
May 10, when the company suspended Mr. Walton for 30 days.
In April, 10 of 17 bidders -- including "jgle," "astheworldturns," "artpro,"
"birdaroo," "estate-queen" and "flipbackwards" -- who seem to cross-bid were
bidders on an exotic genre painting put up for sale by "w."
Also in April, "astheworldturns," "jgle," "1ackley," "big-fat-mamba-jambas" and
"cheesesix" -- one of Mr. Walton's names -- made offers in near succession on
an "abstract oil painting by Hager" put on the block by "boyscoutsofamerica."
They comprised five of the 14 bidders for the painting.
And in April, Mr. Therrell's sister, Alice Therrell, who also lives in
Placerville and uses the name "pog...@jps.net" on eBay, put up for sale a
"large oil painting by Califano -- his best!" Among the 16 bidders were
"astheworldturns," "education1," "birdaroo," "artpro" and Mr. Walton, using the
name "grecescu."
Of those names, eBay has suspended "education1," "w.," "flipbackwards" and Mr.
Walton's names. It plans to warn "boyscoutsofamerica" as well as another name
submitted to eBay by The Times, "docharpo." The others remain registered users
in good standing.
Not every painting sold by "advice," "boyscoutsofamerica" or others who appear
to be in the circle has attracted such cross-bidding. But many do.
Mr. Walton said that he was "absolutely not" part of a ring. "There is nothing
going on," he said. "EBay got me, and I'm off, and that's it."
In the past he has said that all of his questioned bids were made on behalf of
friends.
Guy Sbar, a New Jersey doctor who uses the name "docharpo," also said he was
not part of any bidding ring. E-mails or phone calls to the other Internet
names were not returned.
Eric Greenleaf, an associate professor of marketing at the Stern School of
Business at New York University who has researched the traditional auction
process, said that there were two good clues to indicate that someone is shill
bidding for a friend: "if the only time he bids is when some one person is
selling and if the underbidders are very geographically close."
According to the information eBay users provide for other eBay users, many in
this circle of repeated interacters live in northern California or Colorado.
Without help from eBay, it is difficult to determine how frequently members of
this circle bid or buy. But some clues are available through eBay's feedback
system, as evident from a feedback posting on eBay about a year ago.
Within four days, 10 of the names that regularly appear in relation to Mr.
Walton placed complimentary comments on the feedback site for a seller named
"pigroast." "Eh . . . eh . . . You sure do know how to 'cook' up one good game
deal, pigroast," wrote "1ackley" on May 27, 1999. A day later,
"big-fat-mamba-jambas" added: "Hallelujah, Pigroast! May the Lord Come Down And
Bless Your Kind Soul!! Amen." Other compliments are either equally obscure or
underscore "pigroast's" dependability, as in "thriftstorebob's" comment:
"bargain city . . . deal of a lifetime . . . an asset to the Ebay community!!!"
Within hours of the appearance of those comments, "pigroast" had posted return
compliments for each Internet name.
Three of "pigroast's" 10 admirers -- including Mr. Walton, using the name
"grecescu" -- bid in the $135,805 auction.
Yet eight of the 10 names in the "pigroast" feedback have two or fewer feedback
comments from other eBay users -- and they include comments from "pigroast"
himself. The scant number usually indicates that these bidders rarely complete
transactions.
Of these names, eBay has suspended "pigroast" and "thriftstorebob," while the
rest remain members in good standing.
In another odd episode, Ms. Therrell, who as "pogdog" is an active art seller
on eBay, offered a painting about six months ago that stirred notice.
According to a few eBay users, including David J. Carlson, a Carmel, Calif.,
art dealer who employs three "e-pickers" to search for authentic paintings on
eBay that he might buy for resale, "pogdog" put up for sale an abstract
painting that also resembled a Diebenkorn. The description never used
Diebenkorn's name and made no claim about the artist. Like Mr. Walton's, Ms.
Therrell's offering included a close-up of the work with the signature "R.D."
easily discernable. Ms. Therrell did not return a phone call seeking comment or
respond to an e-mail.
Auction records for that offering on eBay are no longer accessible, and the
company declined to provide a bidding history or any information about the
offering, citing policy and an inability to track the offer now. But Mr.
Carlson recalls that the work fetched more than $10,000.
"Pogdog's" feedback record includes many highly complimentary comments from
some of the same people.
"Artpro," for example, posted two, including "THE MOST HONEST SELLER, WITH THE
BEST ITEMS AND CUSTOMER SERVICE ON EBAY-BY FAR!," while "1ackley" wrote,
"PAINTING WAY BETTER THAN DESCRIBED! THE MOST HONEST SELLER ON EBAY!"
Mr. Greenleaf, the N.Y.U. professor, said he believed that Internet companies
like eBay could detect rings of friends who bid on one another's online
offerings if they wanted to. "There should be patterns that would be very
suspicious," he said. "These companies have powerful computing ability, and it
would be easy to search for coincidences. But it's time-consuming, and eBay is
very laissez-faire."
So far, eBay has responded to reports of shill bidding mainly by suspending a
user for 30 days on the first violation and indefinitely on the second. The
company, however, said that to date most incidents of malfeasance involve
credit card fraud and the failure to deliver goods.
But as online auction fever grows, bidding fraud could get worse. "The Internet
offers more opportunities to shill than traditional auctions because you have a
lot of time to think about it," Mr. Greenleaf said. Furthermore, he said, the
cost to a shill bidder who gets stuck with his own property is lower, because
commission rates are just 1 to 5 percent online compared with as much as 30
percent at Christie's and Sotheby's and at least 10 percent on Sotheby's online
sites.
Alan Bamberger, an antiquarian book dealer in San Francisco who applauds eBay
for broadening the art and antiques market, also said companies like eBay could
do more to reduce fraud. "One of the things I've lobbied for is to get the
records left up on the site longer," he said. "They could play it into great
P.R., and they hardly have to do anything."
JD Blackwell
Hojo2x <hoj...@aol.com> wrote in message
news:20000602014630...@ng-fd1.aol.com...
> The following article is from the New York Times online service, and
concerns
> shill bidding on a painting. But the practice is just as likely to be
> happening with musical instruments sold on eBay, as well.
>
>
> whm
Anybody care to speculate on whether the California Bar will disbar Mr.
Walton?
JD
David Kilpatrick
(Hojo2x) wrote:
> The following article is from the New York Times online service, and concerns
> shill bidding on a painting. But the practice is just as likely to be
> happening with musical instruments sold on eBay, as well.
>
Snipped
> But a close analysis of that and other eBay art auctions reveals that the
> flourishing cyberauction world faces a deeper, more intransigent problem than
> lone self-bidders: the prospect of rings of shill bidders, acting as partners.
> Mr. Walton, a Sacramento lawyer who used at least five Internet names selling
On one occasion, when I realised I had accidentally put up an item with no
reserve and someone bid on it immediately preventing me from withdrawing it,
I got my son to outbid, paid the eBay commission, and kept the item
involved. Otherwise I would have sold a $300 guitar for $30. I guess this is
theoretically the same thing but not motivated by dishonesty!
David
--
Read about our photo magazines: http://www.freelancephotographer.co.uk/
Personal website: http://www.maxwellplace.demon.co.uk/pandemonium/
dh99
Hojo2x wrote in message <20000602014630...@ng-fd1.aol.com>...
>The following article is from the New York Times online service, and
concerns
>shill bidding on a painting. But the practice is just as likely to be
>happening with musical instruments sold on eBay, as well.
>
National Public Radio and some other papers had pieces on this also.
Probably triggered by the NY Times article.
My experience with ebay is limited. However, seeing some of the prices that
average to middlin' guitars go for, I would not be surprised if it hasn't
happened.
I somewhat suspected it could be happening in the area of small ticket music
components such as sound components, pickups, etc. I've bid on items that
were really attractively priced (loss leaders?). I try to set my max bid at
a reasonable price, say somewhere near a reasonable "wholesale" price which
I think is fair for my self and the seller. Invariably I would see my bids
topped near the end of the auction.
For the record, I've done no detailed monitoring of the bids or the bidders
names, the patterns, etc. Just noted that stuff was sold for stuff that
isn't worth to me what my bid max was.
My casual observations.
Danny
I suppose I need one of those neat signature lines here.
Dick Thaxter
>The following article is from the New York Times online service, and concerns
>shill bidding on a painting. But the practice is just as likely to be
>happening with musical instruments sold on eBay, as well.
>
>
>whm
Not only likely, but it's already happened. On some of the electric
guitar discussion groups I frequent a shill bidding scheme between two
New Jersey? dealers was documented a couple of months ago. I don't
want to write the names because my recollection is not 100% certain.
What we were told is that the two were suspended, but I understand
they're back now. I just did a dejanews search on rmmg on "shill" and
didn't turn up the references so it must have been on one of the discussion
pages. Anyway a hearty caveat emptor!
Dick Thaxter
Russ
(bid on ebay that is)
Tom Reese
>
> This whole thread confirms my decision to not go there or do that.
>
> (bid on ebay that is)
That's one way of looking at it. I've gotten some great deals on stuff
that I've been very happy with. You can't get hurt if you know what
you're looking for and have a pretty good idea what it's worth and what
you're willing to pay for it.
Those guys bidding big money on a sight unseen painting are IMO out of
their minds.
Tom (the songbook search king) Reese
Richard Derrick
the bidders just hound you with details and never bid and the
sellers say their guitar for example is a certain type but it is
usually the cheaper model (ex. a Celebrity is not really an
Ovation as an Epiphone is not really a Gibson) or it has been
sitting in a case for 7 years unplayed and that makes for a very
untunable and usable instrument. Believe me , I am a veteran of
Fleabay. Finally, the shipping companies rip off the buyers as
well as the sellers charging outrageous prices if you don't know
what you are doing. AS for me , business going elsewhere. Later!
Psongman
* Sent from RemarQ http://www.remarq.com The Internet's Discussion Network *
The fastest and easiest way to search and participate in Usenet - Free!
Zuke
I've had some good experiences too. It's nice to bid on stuff that you
don't really need but is cheap. For instance the other day I bid on a
Epiphone with a cracked neck and a hole in the top from a guy who had a lot
of damaged guitars to sell called Mr. Twistyneck. The "current" bid was $7.50
with $15.00 shipping. I started bidding at $8.00 and everytime I submitted
it, somebody else's undisclosed bid was higher. So I stopped at $15.00
because I didn't really want to risk much more than $30 on a guitar which
could very well be worthless.
I'd really think a long time about putting much more than $25 or so at risk.
I've kept an eye on guitars for the past month or so and I really haven't
seen any bargains when you consider that you aren't really seeing the guitar,
don't know the buyer and have to deal with whatever problems shipping might
entail. I have kept my eyes on the local garage sales but so far haven't
come upon anything useful.
Later,
Zuke
--
You are in control until you are out of control.
Don Pendergraft
That's a broad generalization. As always, caveat emptor. Just be
careful and don't let a few bad apples keep you from a great
guitar at a good price. I know you can get a nice guitar on
Ebay. I sold my dead mint Taylor and the buyer was a Taylor
dealer who never got that particular model and was absolutely
thrilled to death with it. He got it cheap to boot. :( So, while
I'm reticent about selling a large ticket item again, I would
take a chance on buying if their rating was high. It wasn't on
Ebay, but I had a dealer email me with a killer deal on a
guitar. He shipped it to me and it was as advertised. Brand new
and perfect condition for a outrageous price. So, it can be a
good thing. Again, just be careful.
Don Pendergraft
SMoppert
and the seller took it back and payed the shipping one way. Everything else
I've bought has been good, including guitars and mandolins. I've bought 40
items. You have to be aware of what the item is worth. I saw a book for sale
with a little damage on the cover but otherwise new, the dealer, on his list of
other items sold the book new for $85.00 after bids went to $70.00 I ordered a
new one. The damaged book sold for over a $100.00. I guess the buyer never
looked to see what a new one costs
Steve.
Phil Morris
ukuleles. I sent all the information to Safe Harbor at ebay and they got a
warning. At least that is something. If you notice something suspicious
report it Ebay will investigate.
Phil Morris
Jerry Dallal
: On one occasion, when I realised I had accidentally put up an item with no
: reserve and someone bid on it immediately preventing me from withdrawing it,
: I got my son to outbid, paid the eBay commission, and kept the item
: involved. Otherwise I would have sold a $300 guitar for $30. I guess this is
: theoretically the same thing but not motivated by dishonesty!
Unless the rules have changed, eBay used to allow the seller one bid to
guard against the situation you describe.
Couldn't find the specific clause at the moment, but I did find the
one allowing a seller to cancel an auction if s/he screws up
http://cgi.ebay.com/aw-cgi/eBayISAPI.dll?CancelBidShow
I've had so-so luck with eBay. Good because I've gotten
stuff I'm marginally interested in cheap, or at a fair
price for something I really
wanted. Only so-so because I've had no luck at getting
a Martin 5K uke for $5C rather than $5K! :-)
The trick is to forget it's an auction, offer what you're
willing to pay, and not philospohize about it. I don't care
if a seller is using shill bidding because if s/he does, s/he
stands a good chance of losing the sale.
OTOH, I can understand why those who take sellers at their
word as auctioning something are really p*ssed.
Mothra666
some will unhappy, but at the same time there's a reason it's so popular.
Estate sales are a confidence game too. You're selling someone the * idea* of
getting a deal and that's a lot more powerful than just the item. Be smart;
figure out what things cost and dont pay more. If you're selling then set
areserve that is fair. It's not so hard.
Philip Stevenson
Http://members.aol.com/mothra666/chris.htm
"I'm too fucking busy and vice-versa"
- Dorothy Parker