Saturday, January 27, 2007

Is this surprising to anybody?

Customers of the internet auction site eBay are being defrauded by unscrupulous dealers who secretly bid up the price of items on sale to boost profits.

An investigation by The Sunday Times has indicated that the practice of artificially driving up prices — known as shill bidding — is widespread across the site.

Last week one of the UK’s biggest eBay sellers admitted in a taped conversation with an undercover reporter that he was prepared to use business associates to bid on his goods for him.

Our inquiries found evidence that a number of businesses — ranging from overseas property agencies to car dealerships — have placed bids on their own items using fake identities.

The cases raise questions about whether eBay, the world’s biggest auction site, is doing enough to protect consumers.

Shill bidding is slimy - in any context. And in this case, it's illegal. But there's no way to prevent it, and so customers should be discounting the possibility. The fix is easy: Don't bid any more than the product is worth to you.

Shills....illegal, hmm, I don't know; unethical, YES! Shills are a fact of life whether we're talking about Ebay, auto auctions, fine art auctions, real estate auctions or any other auctions (dare anyone say securities?). What the heck are reserves if not another form of shill? Poeple, grow up. Life ain't fair.
Oh, securities, big time. And it's not just the pump-and-dump schemes. What do people think a "market-maker" is?
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