Art & Money
Online Auctions May Yield
Fake Antiques and Mistakes
By KEN BENSINGER
Staff Reporter of THE WALL STREET JOURNAL
The online auctioneer eBay Inc. recently featured a wooden trunk
described as an 18th-century mahogany "officer's campaign chest" and a
"wonderful piece of early American history." With a starting bid of $225, it
seemed like a bargain.
Just one catch: It's "totally a fake,"
says Helaine Fendelman, a Scarsdale,
N.Y., appraiser, examining a photo of
the item. The problem? Wrong
century. (The joints are 19th century.)
Wrong style. (The legs are bowed.)
Wrong country. (The hardware is
British.) "It offends your sensibilities,"
she says.
Meet the new kids on the auction
block. With names such as eBay,
Auction Universe and
Yahoo!Auctions, online auctions are suddenly wildly popular players in
electronic commerce -- and a major force behind the surge in Internet
stock prices. The sites, on which buyers post bids and ask questions via
e-mail, accounted for about $2.1 billion of the total $13 billion in Internet
commerce last year, and analysts expect sales to more than triple by 2000.
At any one time, eBay has more than 1.7 million items up for bid. Visits to
the site have increased 12% since Christmas, despite a slight dip in overall
online sales. Recently, even old-line institutions such as Christie's
International PLC and Sotheby's Holdings Inc. announced plans to hold
auctions online.
But behind the Internet auction craze are a growing number of allegations
ranging from unintentional misrepresentation of merchandise to outright
fraud. Last Friday, eBay, the largest site, disclosed that federal authorities
are investigating potentially illegal transactions on its Web site. Two weeks
earlier, the Federal Trade Commission announced the nation's first felony
fraud conviction connected to online auctions, in the case of a Florida man
who accepted payment for computers he auctioned but never delivered. In
all, there were 5,236 complaints of online auction fraud to the National
Consumers League last year, accounting for more than two-thirds of all
complaints about Internet fraud.
To find out just how risky Internet auctions are, Weekend Journal rounded
up five specialists in art, antiques and collectibles and asked them to
examine listings of wares on five sites: eBay, Auction Universe,
Yahoo!Auctions, eHammer and uAuction. The experts reviewed listings
and bidding records for dozens of objects, judging the accuracy of
descriptions and comparing bids with real-world values. (They didn't see
the actual objects.)
The group found that as many as half the items in some categories were
misrepresented, inaccurately priced or so inadequately described as to
make informed bidding impossible. That was true even for relatively
high-end items, which are presumably directed toward more discerning
buyers. We also witnessed serious bids -- sometimes astonishingly high --
on items our experts derided as total junk.
Why so many problems? For one thing, virtually none of the major services
screen wares for quality or accuracy of description. Although most collect
and post comments on buyers and sellers, they insist they are simply
publishers, much like newspaper classifieds, with no responsibility for
transactions that go sour. "We stand behind nothing," says Larry Schwartz,
president of Auction Universe, a unit of Classified Ventures LLP of
Chicago.
E-addiction
Of course, buyers bear some blame. Like the "auction fever" that famously
infects people at live auctions, there seems to be an addictive quality to
online bidding. In December, visitors to eBay spent more time there than
on any other Web site, save the online-sports pool Gamesville.com,
according to the market-research firm Media Metrix Inc. On the Web,
"dealers can get rid of inventory that won't sell in the real world," says
David Rydzynski, an antiques dealers in Athol Springs, N.Y., who says he
recently sold an Atwater Kent lamp for $857 that had been collecting dust
in his shop at about half that price.
During our foray into online auctions, we found the highest number of
suspect objects in the category of antiques. Our expert, Ms. Fendelman,
raised serious questions about more than a dozen items, including two on
eBay: a reupholstered 1920s chair labeled as an 1850 original and a
carousel horse described as "old," but which Ms. Fendelman says is
spanking new.
Seller Keith Wilbur of Mundelein, Ill., says the horse, which failed to
attract a bid at his $3,800 asking price, is an "original," but won't
"guarantee that it's old." The chair's seller, Randall Wallace, an attorney
and antiques collector in Edmonton, Alberta, says the style and condition
of the chair make him "darn sure it's 1850." The chair also didn't sell.
Online auctions are "absolute caveat emptor," Ms. Fendelman said after a
two-hour session online. "My reaction to this is, 'You're a fake. Prove me
wrong.' " Because many antiques are difficult to evaluate, she suspects
some sellers don't know they are misrepresenting their wares.
For knowledgeable buyers, however, that can be an opportunity. The
experts found some bargains in cases where sellers didn't seem to realize
what they had. On the Yahoo! site, for instance, a first edition of Robert A.
Heinlein's "Methuselah's Children," came up for sale earlier this week
starting at $100, about a third of what it recently fetched at live auctions. A
set of andirons described as 19th century on eBay were actually Louis
XVI, making them worth double the $2,225 paid by the buyer.
Still, there were plenty of traps. Because many collectibles are nearly
impossible to value without an up-close examination, even our expert on
them, Kathleen Guzman, was sometimes unable to tell what she was
looking at. For example, the value of mass-produced items such as
baseball cards depends heavily on their condition, but that's awfully hard to
assess on a computer screen. Same with autographs, which are sometimes
faked. Many collectible listings that Ms. Guzman examined weren't even
accompanied by a photo.
Ms. Guzman, who is president of the U.S. unit of London-based Phillips
International Auctioneers, was particularly flabbergasted by a listing on
Auction Universe for a baseball glove allegedly worn and autographed by
Hall of Famer Reggie Jackson in 1973. No photo. Minimal description.
No certificate of authenticity. Starting bid: $5,000.
"I don't think there's a shot in hell this
thing is going to sell," Ms. Guzman
said midway through the bidding
period. Sure enough, so far, the
glove hasn't attracted a single bid.
The three other experts also had
concerns. Mike Gallagher, a photo
and magazine dealer in New York,
didn't find any fakes. But he thought
the majority of bids for vintage magazines -- such as $370 for a 1922 Life
magazine he values at $40 -- were shockingly high. Mr. Gallagher, who
says 20% of his own business is done through online auctions, concedes he
benefits from the inflated prices bidders are willing to pay, but says buyers
outside big cities wouldn't otherwise have access to the merchandise.
Where is "the buyer in Boise, Idaho, ... going to go to get this?" Mr.
Gallagher says of the Life cover, illustrated by Maxfield Parrish.
Philip Weiss, who runs a small Oceanside, N.Y., auction house specializing
in books and toys, says the problem in his field is that experienced dealers
scoop up the bargains, leaving amateurs to duke it out over material that is
higher priced but poorer quality. He spotted a first United Kingdom edition
of Jack Kerouac's "On the Road" on Yahoo!Auction with a starting bid of
$650. Consulting a reference book, he found that a similar copy sold at a
recent live auction for about $128.
A Raised Eyebrow
Perhaps the biggest potential for misrepresentation is in the fine arts.
Although paintings by famous artists are seldom sold online, their prints
sometimes are. Richard Polsky, our fine-arts expert, raised an eyebrow
over a print on eBay by American master Jasper Johns. The print, titled
"Cup Two Picasso" was described as a signed, numbered lithograph. It
ultimately sold for $610.
An online bargain? Yes and no, says Mr. Polsky. The print was identical to
one that sold for $2,070 at a live auction at Sotheby's last month, so the
online buyer clearly got a better deal. But the print wasn't as valuable as it
sounded. Contrary to the description, the print was neither numbered nor
signed.
So what's a buyer to do? Most auction services say they have no plans to
vet merchandise. "We want to get rid of the fraud," says an eBay
spokesman, but "the responsibilities rest with the buyer as well as the
seller." Still, competition may force some sites to adjust their policies.
Sotheby's and Christie's have already said they or the dealers selling on
their sites will vouch for all items.
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