How to spot auction fraud online

In April 2010, the UK saw it's first conviction of an eBay trader for auction fixing. Paul Barrett was apparently making bids, on items he was selling, under a different name in order to push the price up - an illegal practice known as 'phantom' or 'shill' bidding.

Barrett was the first to be convicted, but regular eBay users are certain he's not alone. Mark Walton, a 45-year-old writer from South London, was trying to buy a chest of drawers on eBay earlier this year when he found himself up against stiff competition.

"As soon as I started bidding, the price started going up and up by less than £1 each time. Finally I reached the price I'd set as my maximum, so I stopped bidding," he says.

"I didn't think anything about it until I got a message from the seller saying they would be willing to sell the chest to me anyway if I agreed to pay a bit more than the final winning bid. At that point I realised something dodgy had been going on."
A quick glance at any auction discussion board reveals hundreds of similar stories from equally irritated users who feel they have been taken for a ride.

The warning signs

So how can you tell if you are falling prey? Unfortunately, there are no hard-and-fast rules, but there will always be a few signs that things aren't all they seem. First, look at how much the bids are increasing by.

Usually a shill bidder will place a 'nibbler' bid, which is only slightly higher than yours, pushing yours up very gradually. Bidding patterns that show no advantage to the bidder but significantly increase the item's price may suggest shill bidding.

Other questionable patterns include multiple bids in short, deliberate bursts, or bidding several times in small amounts, even when other bids haven't been placed.

If your suspicions are aroused by an odd bidding pattern, you can check the feedback of the person bidding against you.

The dodgy practice comes in two forms – either 'shill' bidding where the seller gets an accomplice to bid for them, or 'phantom' bidding, where the criminal sets up a second account to do it themselves.

If it's phantom bidding in action, often the account will have very little, if any, feedback. It could even have been created within the last 30 days.

Perhaps it seems too obvious, but you can also check for similarities between the bidder and seller IDs.

In the case of Paul Barrett, they both had the name Paul in the title. Again, not a guarantee, but not a good sign either.

Finally, if you walk away, check for speedy re-listing, a reasonable sign the shill accidentally won. Samantha Booker, a 36-year-old from the West Midlands, had been bidding on a Spiderman action toy when she finally gave up.

"I'd been following other Spiderman toys for a while," she says, "so I knew what it should sell for. When it started creeping up above that level I stopped bidding.

"I was still on the hunt for a Spiderman figure, so I did a search a day later, only to discover it had been immediately re-listed."

What to do if you spot a scam

If you think you've spotted a shill, report it immediately and eBay promises it will investigate. The auction site's policy says: "We thoroughly investigate every report we receive.

"Sometimes, though, what appears to be shill bidding may actually be a legitimate transaction. If there's evidence of shill bidding, we take action, ranging from listing-cancellation to referral to law enforcement."

However, the discussion boards show that plenty of people have been told the site doesn't have enough information to take action; some have been told to take their complaints to the police instead - eBay declined to comment.

But you should still report any trades you suspect to be shills to eBay. 

Going to the police also remains a possibility, as does reporting the trader to Trading Standards or Consumer Direct on 08454 04 05 06. In the meantime, the only way to ensure you stay safe from shill bidders is to keep your wits about you.

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