eBay and Dirty Bidding

As someone who fell victim to shill bidding on eBay, I was happy to see this issue getting the attention that it deserves. This past Sunday’s Times of London ran a story that detailed how sellers fix prices.

In my case, eBay recognized that shill bidding had occurred; but they essentially did nothing about it. I wasn’t able to recoup any of my loss (more than $300 I am embarrassed to admit); and nor was the seller punished in any meaningful way (he was back selling only a few weeks after I’d been told that he would be sanctioned).

People talk about the great community tools that exist on eBay and about the buyer and seller rating systems; but the fact of the matter is that these tools are easily jobbed and don’t really tell you anything about the person with whom you are dealing.

I recently was looking for a digital SLR and decided to bypass eBay all together opting for Craig’s List instead. The buyer and I met and he had also gone off eBay. Too much fraud and too many buyers trying to play games. He said, and I agree, that he wanted to sell to local people that he could meet with in person.

It all comes back to the issues of identity and transparency. When those things don’t exist – or can be easily manipulated – communities aren’t going to succeed. eBay managed to create a community; but over time they have allowed it to by hijacked by unscrupulous buyers and sellers.

Until eBay finds a way to clean up this mess (and why should they since inflated prices only means more revenue for them), more and more people are going to find alternative ways to buy and sell online; and that’s probably a good thing.

[tags]eBay, shill bigging, fraud, Craig’s List, identity, transparency[/tags]

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One thought on “eBay and Dirty Bidding

  1. Philip Cohen says:

    eBay introduces absolute anonymity for (shill) bidders

    A submission to government and others regarding unconscionable conduct by the online auction facilitator, eBay

    30 June 2008

    eBay is a very large international company with such a market share of the online auction business that their behaviour has to be viewed as “monopolistic” in nature.

    As an eBay “junkie”, predominantly a buyer, my principal concern with eBay is their recent introduction of absolute anonymity of bidders to their Australian and, more recently, UK sites (and undoubtedly coming soon to the US). I consider this action to be unprincipled, unethical, reprehensible, even unconscionable; however you look at it, it is outrageous.

    eBay has now obscured auction bidding to the point that genuine bidders have got absolutely no chance of detecting and thereby protecting themselves from “shill” bidding (a criminal offence in most civilised countries) by unethical vendors. Notwithstanding eBay’s statements to the contrary, this application of absolute anonymity by eBay serves no purpose other than to deceive consumers; and the same criticism has always applied to eBay’s other facility, “User ID kept private” (aka “the shill bidders’ stairway to paradise”). Again, notwithstanding eBay’s various pronouncements about shill bidding being banned on eBay, eBay is now knowingly “aiding and abetting” such shill bidders, at the expense of consumers.

    What reason could eBay have for increasing the level of bidding anonymity from that of a bidder-specific level (as currently used in the US) to an absolute level? The only possible reason can be to make shill bidding “disappear”. If shill bidding cannot be detected, then genuine bidders cannot report it and, as a consequence, eBay will not have to waste any of their valuable resources pretending to do anything about it.

    On 26 February, on the eBay Workshop Board michelleoz@ebay.com, in anticipation, posed the following question and a response thereto:

    “Won’t the recent changes to ‘safeguarding member IDs’ allow more shill bidding to take place?

    “No—the changes will not make shill bidding any easier.
    “Our experience is that the detailed information [now] provided on the buyer, and how it is presented, has been more useful to members of the community who report such activity. That is, we still get good quality member reports.
    “Furthermore, ebay continues to monitor the back end of the site using both data provided by members and also data captured from members as they transact on the site.
    “And ebay continues to adapt registration and account activity rules to make the site safer overall.
    “Shill bidding is banned by ebay for good reasons: it hurts buyers (who see less value—one of the major drivers for internet purchases) and also hurts legitimate sellers. Any person who argues that ebay wants shill bidding to drive up revenue through inflated final value fees is way off the mark.”

    Space does not allow the matter to be here explored with further examples but it is apparent from many of the statements made from time to time by eBay that nowadays very little that eBay says can be accepted at face value, and the first sentence of the above answer (“No—the changes will not make shill bidding any easier.”) is a classic example of what appears to be a progression towards habitual disingenuousness—it is a patently absurd statement. Of course total bidder anonymity makes shill bidding easier—as it would so do at any personally attended live auction—just as the absolute anonymity offered by eBay’s “User ID kept private” facility has already enabled shill bidders to operate on eBay with little fear of detection—notwithstanding eBay’s dubious claim of having “sophisticated tools” for the detection of such shill bidding. And, at an attended live auction (assuming the auctioneer is not complicit in the activity—flies on the wall have been known to make bids), a shill bidder risks having to pay the auctioneer’s full selling commission and a buyer’s premium to boot; no such risk for shill-bidding sellers operating on eBay: if the supposed “buyer” does not pay then the seller pays only the nominal listing fee.

    Michelleoz@ebay.com, also said:

    “Our experience is that the detailed information provided on the buyer, and how it is presented, has been more useful to members of the community who report such activity. That is, we still get good quality member reports.”

    The “detailed information provided on the buyer” now supplied is, to the contrary, not more useful: you really can’t expect the majority of the sheep that graze on the eBay slopes to be interested in sifting through multiple pages of such “detailed” information to try and ascertain whether or not a competing bidder is a shill—assuming they are aware of such activity in the first place. I am certainly not interested in doing so; I prefer to be able to put a “face” on another bidder, so that I can more easily make that judgment. The supply of this “detailed information” may seem like a good idea in theory; in practice this information is an ambiguous, confusing, and pointless set of statistics: in some circumstances it can actually make a genuine bidder look like a shill.

    And, do please explain to me how eBay can possibly say that “Our experience is …” and that eBay “still get good quality member reports” when genuine bidders (in Australia and the UK, at least) now have effectively got absolutely no chance of detecting shill bidding activity? How does eBay measure this negative? This statement and the balance of this particular response is simply more disingenuous tosh.

    On the same workshop venue danieloz@ebay.com responded to a questioner who asked if there was any “publishable data to back up the claims that second chance offers are such a problem, or that shilling has not in fact increased since the introduction of “hidden” bidder IDs for bids >$250?”:

    “It is difficult for us to get accurate data on second chance offers because this activity happens outside of eBay’s systems and is not always reported to us.
    “However, I can assure you that eBay wouldn’t have lowered the limit to $0 when hiding bidder IDs if the results from the initial launch over a year ago weren’t positive.
    “Once again, this initiative has no impact on shill bidding. There is no correlation between hidden IDs and shill bidding.”

    This whole response smacks of outright disingenuousness, and if ever there was another patently absurd statement, it is the last sentence: “Once again, this initiative [the introduction of absolute anonymity] has no impact on shill bidding [and] there is no correlation between hidden IDs and shill bidding.”

    The form of “anonymous” alias currently in use in the US (“a***b (n)”), although comprised of two (initially) randomly generated characters and three interposed asterisks, is the alias used consistently for that bidder, and when viewed in conjunction with the accompanying feedback count, “(n)”, is effectively bidder-specific and still offers a genuine bidder the opportunity to watch for suspicious patterns of bidding by individuals across a particular seller’s other auctions.

    On the other hand, the non-bidder-specific absolute anonymity of the form of alias now in use in Australia and the UK (“Bidder n”) is just that, totally anonymous, and serves no other purpose than to deceive the consumer. The whole bidding process, rather than being “open and transparent” as it used to be, is now “closed and opaque”. For buyers, in particular, eBay is no longer “a safe and fun place to trade.”

    The logic of this organisation is totally incomprehensible to me: I cannot make up my mind whether these people are disingenuous or are just plain stupid. Apparently, this “Bidder n” alias nonsense was previously introduced (in January 2007) onto the US site but, due to member complaints, has since been (in August 2007) replaced by the bidder-specific style alias (“a***b (n)”) for all auctions over $200. (What happened to Australia, and why is the reverse again the case in the UK?)

    “Actual Feedback Score is back—We will be bringing back the bidder’s actual feedback score next to each member’s respective User ID.
    “New User ID Masking—We are replacing the current aliases (Bidder 1, Bidder 2 and Bidder 3) with a masked ID that consists of two random characters from the member’s User ID – for example a***b. For any given member, this masked ID will be consistent across all auctions over $200 for which they place bids. At the end of a listing, the winning bidder’s User ID will be displayed on both the item and bid history page.”

    (see: http://www2.ebay.com/aw/core/200701081004422.html
    and http://www2.ebay.com/aw/core/200708241544222.html
    and http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2007/8/1188006091.html).

    eBay claims that absolute anonymity of bidders was introduced to stop fraudulent “second chance offers” being sent by direct email to underbidders. This reason is disingenuous in the extreme. This supposed problem could have been better controlled by other means—and indeed has so been controlled with the recent blocking of access to underbidders’ direct email addresses.

    Further, generally, a member can now only contact another member via the eBay messaging system, so it is not now possible for anyone (including scammers) to ascertain who another member is (or their direct email address) if that member does not want to disclose such details.

    And, it is not now possible to contact any but the winning bidder of an auction as the winning bidder’s “contactable” member ID is the only ID disclosed at the end of an auction.

    So, apart from what would appear to be another nonsensical and disingenuous claim by eBay that there was a problem with scammers “guessing” members’ direct email addresses from members’ IDs, there is, in fact, no need for any increase in the level of anonymity at all; and there certainly is no need for the level of absolute anonymity, that we in Australia and the UK now suffer: again, that level of anonymity serves only to deceive the consumer.

    eBay apparently claims that they are only a “notice board provider on which members post notices”—surely, another absurd and disingenuous contention, as it is they who make all the rules by which member must play and it is they who have created the totally anonymous bidding structure, here complained of, that now enables shill-bidding sellers to mercilessly “rip off” buyers without fear of detection.

    eBay apparently also suggests that as simply a “notice board provider” they should not be subject to any regulation (indeed, I suspect that they are terrified of the possibility of any such regulation) and that therefore they can apply whatever conditions and processes that suit them, without any consideration to the effect on their eBay member consumers.

    So, it appears that all an unethical trader has to do to avoid an “Office of Fair Trading” is to put a “notice board provider” between themselves and their consumers. Now, there is an interesting concept for the consumer lawyers. Surely, any such notice board provider should at least be barred from knowingly providing the processes that allow such unethical traders to more easily operate, to the detriment of consumers, without fear of detection

    If you follow eBay’s line of reasoning that they are only a “notice board provider” then, with regard to the current matter in the U.S. of Pennsylvania State Board of Auctioneer Examiners v Barry Fallon, indeed all sellers—not only those agents, such as Mr Fallon, who act for others—who list on eBay and choose to offer goods for sale by the auction process must be “auctioneers”! Surely, for every auction, someone has to be the auctioneer, and surely, it is eBay that is this auctioneer, after all, as previously stated, it is they who create all the rules and processes by which everyone else must play, and in particular, the process that now allows shill bidders to have a field day every day without fear of detection.

    We in Australia never saw the bidder-specific form of anonymity (“a***b (n)”) currently still in use in the US (and previously in use in the UK); we got absolute anonymity (“Bidder n”) right from the commencement of the increased level of anonymity. Australia being a small market eBay can apparently afford to trial their outrageous ideas here without too much affect on the bottom line (and another such example is the outrageous attempt to impose exclusive dealing for PayPal). However, absolute anonymity has now also been introduced to the UK, and one has to assume that eBay intends to introduce same to the US in due course.

    With all the radical changes made by eBay recently (absolute anonymity of bidding; the “grab for cash” in Australia with the attempted introduction of exclusive dealing for PayPal; seller-unfriendly tinkering with the “feedback” system) it would appear that the new “trail boss” of the cowboys at eBay thinks that he is still riding the range of the old wild west of the 1870s, and that he can do whatever he likes regardless of the effect on the sheep (aka consumers) grazing thereon. Clearly, eBay management has a low opinion of the intellectual capacity of the sheep that graze on its slopes, but I am reminded of an old “Snake” cartoon, Q: Oh, great spirit, what is the lesson for today? A: Never underestimate the power of stupid people in large groups!

    It may well be that the law has not kept up with such developments in online commerce, and that this supposed “notice board provider” can indeed do whatever they like. If that is the case, then it is about time that government regulators had a good look at such organisations (eBay in particular) and legislated to require from them acceptable practices towards consumers. Surely, in the case of reprehensible conduct, such as this deliberate obscuring of (shill) bidding, which serves no purpose other than to deceive the consumer, consumers have a right to bring that conduct to the attention of the appropriate authorities and expect that those authorities will act to give consumers relief from such despicable conduct.

    But, action is required

    There is not much point winging to one and other on the eBay bulletin boards, they are such hopeless, bottomless “bogs” that I doubt even eBay’s robots read the posts thereon unless someone else “reports” them. eBay certainly are not influenced by their content: once eBay management have made up their minds, we will be inundated with the usually disingenuous, sometimes absurd, statements in support thereof, and we consumers have to like it or lump it; and there may well be nothing that we can normally do about that; unconscionable conduct surely is another matter …

    Members are therefore invited to post further ideas or offer comment on the above proforma submission (at AuctionByte.com) that may be used to inform government regulators, members of parliament, the media, ombudsmen, etc, of this outrageous action by eBay. Hopefully, someone with better word skills than I, will contribute to the refinement of such a document that will enable those who care to show what an arrogant, devious, disingenuous bunch of people is this current management team at eBay.

    I know that I appear to go on and on and on, but how else can one try to cover every devious move, and disingenuous excuse for same, by this gaggle of cowboys without attempting to dot every “i” and cross every “t”?

    Please feel free to mercilessly plagiarise any of my posts on the AuctionBytes forum; and remember, unlike eBay’s forums, on the AuctionBytes forum you can “stew” about it for a while and then come back and further refine your posts.

    Sellers in Australia are currently squealing like stuck pigs: between the recent introduction of absolute anonymity for (shill) bidders upsetting buyers; the nonsensical new feedback system upsetting sellers and the farcical attempted “grab for cash” with “exclusive dealing” for PayPal annoying everybody; here, just about everybody (except the shill-bidding sellers) is unhappy.

    We are now getting an increased flow of eBay promotional material here in Australia, including half price listings for sellers, etc: now, why do you think that would that be? Unfortunately, it appears that these arrogant cowboys at eBay are totally incapable of understanding and/or admitting that they have made some bad decisions recently.

    The fact is that although it is sellers who pay the bill, an outrageous eBay policy, such as absolute anonymity of bidders, that will reduce buyer confidence will hurt (ethical) sellers—and ultimately eBay itself. But apparently nobody at eBay has the intelligence to understand that; then, probably, their only immediate concern is the triggering of the next executive bonus for which they will require an improvement in the bottom line: a reduction in customer support staff will help effect that end.

    I also like the idea that the communicative capabilities of the internet, that eBay has so well exploited, also gives consumers the best chance of bringing them to heel. I am not ordinarily a cruel person but I do enjoy poking a stick at these snakes. Keep the pressure on. Let’s at least give them a run for their money (or, to be more precise, Donahoe’s executive bonus scheme).

    Write to your Member of Congress/Parliament/…

    Disclaimer: Notwithstanding any statements by eBay to the contrary, no action taken by the current management team at eBay has anything to do with benefitting eBay members: eBay’s every action is purposed solely towards improving eBay’s bottom line, and consumers are hereby advised that if at any time there appears to be some benefit to consumers, that is wholly unintentional.

    Some more links to comment on some other contentious eBay matters

    On the eBay “naughty chair” again!

    eBay Australia mandates PayPal as sole payment method

    A comment on the new eBay feedback system

    eBay introduces absolute anonymity for (shill) bidders

    eBay plea: Help needed reporting blatant listing violations

    An invitation to eBay: minutes of meetings

    Feedback changes in offing?

    Upcoming Licensing Hearing Could Impact Many eBay Sellers

    Psychopaths in the Workplace

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