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EcommerceBytes-Update, Number 9 - March 04, 2000 - ISSN 1528-6703     5 of 11

A New eBay Bidding Scam?

By Alan Mendelson

March 05, 2000

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Some funny things are happening with the bidding on auctions on eBay, the online auction site. It seems that some collectibles are getting many bids - perhaps too many bids - and the bids are going up to ridiculously high prices. But this is not a case of a seller who is using shills to increase the bids for the items he is selling. No, this is a case of bidders creating their own shills to scare away legitimate competing bidders.

The scam works this way: One legitimate bidder finds an item he wants to bid and buy, and he places a legitimate single bid on the item. Then, using other bidding identities, he enters many more bids that not only outbid his one legitimate bid but also outbids all other bidders including the bids of the phony bidders he has created.

In one instance, the legitimate bid for an item might stop at ten dollars, but the phony bids could reach fifty or seventy dollars. Those super-high phony bids have the effect of scaring way other legitimate bidders - but in the last seconds of the auction, the phony bids are all retracted, leaving the low legitimate bid to win the item.

One Internet newsgroup member identified as John told other Internet newsgroup members how he recognized one such scam: "Just the other day, I was talking to my wife and trying to explain how a couple of fraudulent bidders (or one bidder with multiple ID's) could bid up a coin so high that the legitimate competition (other bidders) would take one look at the auction and then pass it by without bidding. Then at the last minute," he writes, "the scam-artist could withdraw his high bid(s), leaving his second or third account the new highest bidder, but with a much smaller amount to win the auction."

His advice is that if you want to enter a legitimate bid, do so, and your high bid might be reinstated if it turns out higher bids were fraudulent. But with the eBay system and other Internet bidding systems, that might not be possible because the Internet computers will only recognize a new higher bid, and will not let you enter a bid that is lower than one that already appears for the auction item.

Watch out for this scam.

About the author:

Alan Mendelson is "money reporter" for KCAL-TV and KFWB Radio in Los Angeles. His Web site, http://www.moredeals.com, features articles on collecting and hard assets. These articles are sprinkled in two sections of the site - MONEY TIPS and MONEY ALERTS and are updated twice a week. You can read more of the "personal finance information" and "best buys shopping tips" on moredeals.com.

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