Off topic - questionable eBay auctions, "shill" bidding, etc.
June 12, 2000
'Shill' Coin Bids in eBay Auctions
Draw Complaints From Bidders
By GLENN R. SIMPSON
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- At online auctioneer eBay Inc., the warning not to take
wooden nickels has taken on new meaning.
The numismatic community has been abuzz with stories of misidentified wares
and dubious offers -- shill bidding -- that appear designed to boost prices for
coins, precious metals and paper currency.
The problems are akin to scams in eBay's sports-memorabilia and art auctions,
and many coin collectors and dealers are angry. "I personally consider shill
bidding to be larceny," collector Phil DeMayo says. "Unfortunately, eBay does
not have the same view." Dealer Fred Murphy says: "Shill bidding does happen.
We see a lot of it."
Officials at eBay say they have no indication that
the coin-auction problems are any worse than
those elsewhere on the site. Overall, spokesman
Kevin Pursglove said, problems with
misrepresentation and shilling appear in only a
tiny fraction of transactions.
While most collectors sympathize with eBay's
daunting task of policing its millions of auctions, they complain that the firm
lets abusers off too easily by suspending them rather than banning them from
the site. The company says it takes action proportionate to the offense, and
does in fact ban some offenders.
The numismatists also accuse eBay of moving slowly when problems appear.
Last month, eBay users complained that an item was misidentified. The purity
of a 32-ounce bar of platinum offered at $15,000 was questioned when a
collector pointed out that the dimensions of the bar indicated didn't have the
theoretical density of platinum.
Coin dealer Fred Murphy says he repeatedly warned eBay that the bar was
almost certainly a fake. "The reply from [eBay] was basically that they weren't
going to do anything about it, even [after] being told that it's probably $160
worth of silver being misrepresented as $15,000 worth of platinum," Mr.
Murphy said, providing copies of several e-mails he received from company
representatives. In one, an eBay official explained: "Unfortunately, eBay doesn't
actually handle the merchandise that is offered for auction."
Three days later, the bar was labeled a fake by the British company that
purportedly had made it, Johnson Matthey PLC. "I wish to draw your attention
to the fact that Johnson Matthey has never manufactured platinum [or any
other metal] bars bearing the marks shown in the photograph contained in this
listing," a company official wrote in a May 18 letter to eBay. "Additionally, a
solid-platinum bar of the dimensions shown would weigh approximately twice
the indicated weight."
The auction, which eBay never interrupted, expired later that day after bids
reached $13,100, below the $15,000 sought by Roy Thompson, a seller from
Bali, Indonesia. Mr. Thompson and a U.S.-based associate didn't respond to
e-mailed requests for comment. Mr. Thompson, dubbed a "power seller" by
eBay for the high revenues his auctions generate, remains a member of the site
in good standing.
The company said it didn't ignore the May 18 letter, and said it asked Johnson
Matthey for a sworn statement asserting trademark infringement. "We did not
hear back from them," said eBay lawyer Jay Monahan. "Under those
circumstances, it would be inappropriate to remove the item."
Many products come under attack from rival sellers, so the company won't
take action without a formal complaint from someone with a legal stake in the
matter, Mr. Monahan said. "That is there to protect our users from people
asking just willy nilly to get things taken down," he said.
To combat problems with shilling, some coin collectors, including Atlanta
computer technician Robert Shaw, have turned to online vigilantism, joined a
posse that calls itself the Shill Hunters. The group exposes what it believes are
frauds on rec.collecting.coins, an Internet online-discussion group.
Mr. Shaw's tales of detective work, and those of compatriots, offer a revealing
look at the inner workings of eBay. Some of the smartest alleged con jobs net a
few dollars each, but are undertaken in great volume.
Mr. Shaw gave an account of a recent "bust." The case concerned a seller
identified as "evangelism.4.him," who also offered "testamony" [sic] with his
sales. "I am using this Auction Site to spread the Word of God,"
evangelism.4.him wrote.
After purchasing two Mercury dimes from evangelism.4.him for the sum of
$6, Mr. Shaw grew suspicious of the transaction when he noticed that one of
the other bidders seemed to limit his other offers on eBay to just two particular
sellers. When buyers exhibit such an unusual preference for particular sellers, it
is a clue that they may be in league -- or the same person.
EBay members have the right to request the real name behind the screen name
of other members, and Mr. Shaw did so for the sellers he found suspicious.
"They listed the same real name of evangelism.4.him," Mr. Shaw recounted in
an e-mail. That person didn't respond to an e-mail request for comment.
A bit more searching by Mr. Shaw located additional eBay accounts allegedly
used by the man to place bids on his own wares, such as "gila-monster,"
"namrap," and "debbielynn44." EBay tries to ensure the credibility of buyers
and sellers through a vouching process known as feedback, whereby buyers
and sellers accumulate testimonials -- or criticisms -- from customers in past
transactions. When Mr. Shaw examined the feedback for each name, he found
that the three had vouched for each other, but no one else had. All seven
accounts have since been suspended by eBay.
While the Mercury dime auction was inflated by only a few dollars, if at all,
eBay records indicate that the seller may have conducted more than 1,000
auctions before he was suspended.
The incident, and Mr. Shaw's contribution, were confirmed by eBay. "He
absolutely helped us identify individuals who were shilling, and we suspended
them," said the spokesman, Mr. Pursglove.
Mr. Monahan, the eBay lawyer, said the company is in a difficult legal position
because too much oversight could leave it liable for transactions that go bad.
The company, he said, has drafted proposed legislation to give it some
protection.
Write to Glenn R. Simpson at glenn.simpson@wsj.com
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