Am I descending into the murk of crappy ethics (Re: Phony Ebay Bidders)?

In My Humble Opinion
1

I keep hearing about this deal on the radio and such:

. . . and, well . . . I don’t get it. I mean YES, I think it’s a crappy thing to do, NO, I wouldn’t do it myself (I’d just set a reserve price that would be sure to make me happy), but really, in the grand scheme of things, it doesn’t seem like The World’s Worst Breach of Ethics ™ to me. Another disclaimer I should issue, of course, is that I know little to nothing about De Law, so while I’m aware that some were broken, I’m still feeling like there are worse things a person could do.

So does this mean that I’ve got one foot poised over the slippery slope of Questionable Ethics? I thought I was a good person; I tip well, I tell the cashier if I’ve been given too much change, I pick up after my dogs when they poop on property that’s not mine . . .

. . . and I look askance at people who don’t do these things. :wink:

However, if I were the buyer of one of the vehicles in question, and found out that the seller had placed phony bids to jack up the price, I don’t think I’d be incredibly upset. If I got the goods I wanted, for what I obviously considered a fair price (or else I would have stopped bidding), so what if the seller got a little crafty on me? And besides, by placing phony bids, wouldn’t the seller run the risk of winning the auction himself, and therefore losing a sale?

Talk to me; am I fitting the profile of a potential serial killer (or worse, a politician :D) by not seeing this as a big deal?

2

SkipMagic, if you’re reading this, very slowly, very carefully, get out of the house. NOW! Don’t make any sudden moves. She might snap. :slight_smile:

Seriously, I agree with you. I’m not sure what the big deal is.

3

The World’s Worst Breach of Ethics [sup]TM[/sup]? Of course not. But it is unethical, wrong and illegal. And yes, if someone ripped me off of money I shouldn’t have had to spend on an aution, I’d like it back, please.

It’s considered unethical to place a bid on something you have no intention of buying, so I suppose right there is our first problem.

Secondly, the buyer is unfairly inflating the price. Especially with automatic bidding, or whatever it’s called these days, you put in simply a maximum amount you’re willing to spend, but the system understands that you’d rather pay the minimum possible up to that maximum. When a seller bids on his own stuff (which he’s not intending to purchase), it pushes your bidding up more quickly. If no other legitimate buyers are bidding, it pushes it up past what you would have had to spend in an honest auction. This is different than another legitimate buyer pushing up your bid, because they are a truly interested party, who would be willing to pay actual money to set an actual value on something. They are taking the same risks you are, and hoping for the same outcome. The seller is not.

Also, it’s just simply not part of the “contract” you agree to when conducting an auction. (I use “contract” in its social sense, not its legal sense. Although, considering the lawsuit, perhaps it is true in the legal sense as well.) Good sportmanship and ethics dictates that you have a specific role in auction: seller or buyer. Taking more than one role muddies the waters, and taking more than one role without clear understanding of all the parties means that you’ve signed people up to one contract, but switched the rules on them without their knowledge.

A clean, ethical way to deal as a seller in auction is to set a reserve price you can live with, and let potential buyers determine the final price. Otherwise, it’s simply not an auction, but something else I don’t have a name for.

I forget who said it, but there was a great line in an article about Ebay that went something like: “Ebay: the place where you spend more than anyone else thought the product was worth - by definition.” :smiley: I always liked that.

4

You make excellent points, WhyNot, and certainly I don’t think it’s unreasonable to be pissed off if you’re the buyer, but I’m just not feelin’ it. Oh, and in regards to this point (which, again, is sound):

I’m curious as to what you think about a friend of mine who, when I first showed him the ebay “ropes” (several years ago, when the excellent quote you cited wasn’t necessarily true ;)), took great pleasure in bidding on stuff he didn’t want (while his wife stood behind him and warned him that he’d end up winning something he didn’t want if he didn’t stop), just to up the price for the proxy bidders and/or find out what the seller’s secret reserve price was. (Note: I’m quite certain that had he actually WON something by accident, he would absolutely have made good and paid for the item–but really he didn’t want any of the crap, and probably took the same pleasure in bidding on it that people get from gambling.)

This is going to sound odd, but in my mind, what my friend was doing was kind of worse than a seller placing phony bids, because at least the seller has sound reasoning (mo’ money, mo’ money), whereas my friend was just trying to fuck with people.

5

True there are worse things people could do. They didn’t kill or rape anyone, should they get a free pass? They took peoples money using deceptive practices. A lot of money. How can you think that is not illegal, unethical and just plain wrong. No one is advocating the death penalty for them but they deserve to be punished. If someone throws a rock through your window should they be let go just because they didn’t shoot you? Yes there are worse things they could do but this was bad enough.

6

Oh, I’m sure it’s illegal, I think it’s mildly unethical, and I wouldn’t do it myself. I guess what I think is odd is not so much that they got punished (tho’ that was a mighty hefty fine), but that I keep. on. hearing. about it (maybe it’s just the radio stations I choose?), when it doesn’t seem like a big enough deal to me to land ALL OVER the news . . .

Ultimately, you’re right–illegal is illegal–but it seems to me like this is bigger news than it oughta be. Perhaps to make an example out of these people as a scare tactic, since any research into how many other ebay sellers do this is nearly impossible?

7

I think its pretty rotten.

The reason it’s big news is that for years, many of us have bought things off eBay, and always felt like that was going on. I have won auctions where I would bet my life that the price was inflated by the seller, or a confidant of the seller. And now they’ve bagged a couple people for it. And a lot of people like me are looking back thinking, “I wonder if I got jobbed.”

The thing is, say I put in a price I’m a willing to pay, $50.

You’re thinking, “well, if he got it for $50, he thinks he got a fair price. Who cares how it was bid up.”

Here’s the rub: I’m WILLING to pay $50, but I also made that bid on the assumption that there’s a reasonable chance that I could get the item for less if there was low demand for it. These cheats have removed that part of the calculation.

So, what has that done to me? I now only buy on eBay with the “Buy it Now” or I put in repeated lower bids, to make sure I’m not getting ripped off.

While this practice should punish the crooks, it also punishes the honest sellers and the honest buyers.

I don’t have a chart with “degrees of unethical behavior” on it but this is pretty unethical, and does have ramifications beyond the auction that it occurs in.

8

Are you sure it’s illegal? I’m not sure about on eBay, but at other auctions the seller can and does bid on their own item if they don’t think it’s going for enough money. They then take it and try and sell it again later. I guess on eBay with a reserve they don’t have to do that, but I know people do it at normal auctions.

9

I am not an expert on interstate commerce but I see a big difference here and apparently so do the courts. If you are at an auction and bid on your own item to get it back(I don’t know if this is a common practice but I’ll take your word for it) there is no deception. This case is inflating the cost and making a profit through deception. Thats fraud.

10

IANAL, nor do I know anything about this case other than what’s in the OP. In the OP, it’s stated that “a New York **court ** **ordered ** eight eBay (Nasdaq: EBAY) sellers to pay nearly $90,000 in **restitution ** and **fines ** for the **crime ** of phony bidding. In the three cases, the court found the individuals **guilty ** of making phony bids on cars and paintings they were selling to increase the prices.” These words indicate to me that illegal activity occured. YMMV

11

It’s called “shill bidding” and as far as I know, it isn’t allowed at normal auctions, either.

At least, not the live auctions *I’ve * been to.

12

Too lat–

13

Perhaps a different perspective is in order here. Let’s say you’re buying something for which your maximum bid is $20, but your opening bid is only $6. The seller, by bidding on his own item, pushes your bid up to $18.50, when you would otherwise (unbeknownst to you) only have had to pay $10. Doesn’t seem like such a big deal; you were willing to pay $20 for the thing, and you paid a bit less than that, so okay.

But some of the people involved in this lawsuit weren’t buying $20 items. They were buying big-ticket items such as cars.* Suppose you see a car on Ebay that interests you, and you think about it for awhile, and you decide that the absolute maximum you can afford to pay for a car right now is $7000, and not a penny more. You place a proxy bid of $7000, and your opening bid is $2500. The seller, by bidding on his own item, pushes your bid up to $6800, when you would otherwise (unbeknownst to you) only have had to pay $4000. In other words, this guy just ripped you off for $2800, as well as taking your car-buying budget to its absolute limit. Seems a little more shady now, doesn’t it?

So no, I don’t think it’s the worst thing a person can do. I quite honestly don’t think it ought to be illegal, as the buyer is never forced to pay any more than they were willing. It’s the same reason I believed that all those “XBOX BOX” auctions a few years back should have been legal; caveat emptor applies as long as there’s no outright lying or cheating going on. I do, however, think that all of these things are extremely unethical, and I would work to inform people that they happen (and who has done them in the past) to help them avoid being taken by these borderline-swindlers.

*I tend to feel that anybody buying something on the order of a car via an online auction might as well be down on their knees holding up a neon sign that says ATTENTION SCAMMERS, PLEASE SCREW ME OVER! But that’s just a personal thing.

14

Sorry caveat emptor does not cover fraud, not in this country. This is fraud as in:

Thats the dictionary definition. Each state has different legal definition but I think this practice would fall under most legal definitions of fraud or theft by deception. It obviously does in New York since they were charged and convicted.

15

Actually, No. Those seem exactly the same amount of shady to me. Ethically, the dollar amount doesn’t make a whit of difference.

The first one is insidious in its own way because trying to recover your money from the fraud isn’t worth what you lost.

16

Right, from a purely ideological standpoint, they are both equally shady. My point was that the second example more clearly illustrated the principle at work in the first, which may have been disregarded by people whose thinking was based entirely on small-ticket transactions. I was attempting to illustrate the fallacy of the dichotomy, not create it. Apologies if that was unclear.

17

The reason that shill bidding is illegal and violators are prosecuted is simple - if it were allowed it would take down an entire industry. Who would go to an auction knowing that shill bidding was allowed? One allure of an auction is the perceived chance to get something for less than it’s normal value. Take that perception away and auctions become much less popular.

It kind of the same thing that brought down Pete Rose. Gambling on baseball games is legal in some US states and countries. Gambling on baseball games by players and coaches is not. Why the double standard? Because if people knew that players and coaches gambled on the games they could reasonably expect that the games were, to some extent, fixed. That would be the death knell of an industry (unless Vince McMahon took over and made millions as “scripted entertainment”).

18

And there, pardon the pun, is the ticket; I guess since I only go for small-ticket items on ebay (and not cars and the like), it’s less of a big deal to me. So while Trunk is technically right, Roland nailed it for me by illustrating the possibility of a $2800 loss which would, now that I think about it, piss me off. Unless I’m Donald Trump. Hell, he probably spends that much on tips to his hairdresser in a week’s time.

19

While it’s definitely in a murky area ethically, I don’t really think this is fraud. The way I see it is this: when you input your maximum bid, you’re fully aware that you might be paying that. If you get a little bit of a break at the end of the auction, that’s just a bonus; it’s not the way it has to happen. Ebay isn’t just a place where you can get “deals,” it’s a place where you can find rare items, and you have to be willing to pay a premium on that collector stuff sometimes. If you didn’t think the product in question was worth as much as the closing price was, you wouldn’t have bid so high. Especially in the case of proxy bidding, you can’t say something like “I let the high emotion of bidding on the auction get to me,” because in that kind of auction all you do is input your high bid and leave it alone. What these bidders did was crappy, and I can see why Ebay makes it against their rules (since a lot of buyers would get pissed about it), but if the buyers didn’t want to pay that much they shouldn’t have put their proxy bids so high. Sometimes, you’re just going to have to pay your maximum bid.

20

Well the law doesn’t see it that way. In an auction the item is supposed to go for what the market will bear. If you want there to be a minimum bid then set one. Artificially inflating the price using socks is illegal. And it should be.