Shill bidding on eBay

Nothing really new in this Sunday Times piece, except catching out a big UK seller of antiquities on tape:

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.

Frankly, I'm not as upset over shill bids as I am over more serious forms of fraud. eBay could do a lot more to protect buyers from being scammed outright, and as long as items are routinely and grossly misrepresented, it may be misplaced concern to focus on transactions where the buyer gets what he wants at a price that he deems acceptable -- even if he could have paid less, minus the shilling.

Last November eBay changed its rules to conceal bidders’ identity — making it even more difficult for customers to see whether sellers are bidding on their own lots.

It made good sense to remove the ability to search out what other individuals are bidding on; the hiding of bidder IDs, however, would appear to be misconceived. If eBay isn't going to police shill bidding aggressively itself, it should at least give its customers the ability to detect it on their own.

One of the beneficiaries of the boom is Eftis Paraskevaides, a former gynaecologist, from Cambridgeshire. He has become a “Titanium PowerSeller” — one of eBay’s handful of top earners — selling more than £1.4m worth of antiquities a year on the site.

Back in 2000, the BBC reported that Paraskevaides was suspended from practice "after fears were raised about his work". He subsequently resigned, thus evading an independent inquiry into his work. Now that he has reinvented himself as an antiquities dealer, a Google search suggests that shill bidding is the least of the man's offenses -- though the only one that the Times concerned itself with:

In a conversation with an undercover reporter last week, Paraskevaides claimed shill bidding was commonplace on eBay.

When the reporter asked whether he arranged for associates to bid on his own items, he replied: “Well, if I put something really expensive (up for sale) and I was concerned that it was going for nothing, I would phone a friend of mine, even a client of mine who buys from me, and say: For Christ’s sake, I sell you 100 quids’ worth of items a week . . . just put two grand on it, will you?” The reporter was posing as a seller of valuable antiquities. He inquired whether Paraskevaides could sell them on eBay and guarantee a minimum price.

This sort of bidding is probably the least worrisome, as well as the most difficult to catch. The online chatter suggests, however, that Paraskevaides' shill bidding is much more systematic, not restricted to the occasional "unofficial reserve", and -- most likely -- done with multiple accounts under his direct control. I've seen many other sellers with such an MO, where items are routinely "sold" for very high prices, almost always reappearing for sale again some months later. This also might call into question the £1.4m annual sales figure cited above: how much that was "sold" on eBay was actually sold?

He claimed eBay would never follow up a complaint against him for shill bidding because he generated about £15,000 a month in commission for the company. “Are they going to ban somebody who’s making them the best part of 15 grand a month? No,” he said.

"No" is right, unfortunately -- but a writeup of this sort in the Times is another matter:

A spokesman for eBay said he expected that the company would now launch an investigation into Paraskevaides.

Incidentally, the Times did not provide Paraskevaides' eBay seller names, which at last report were bidancient and eftis -- neither of which presently have any items listed (it may be supposed that he is being booted, but the accounts are still listed as registered). A list of eBay sellers of fake ancient coins may be found here; the Yahoo! Coin Forgery Discussion List is another useful resource. They are also a useful corrective to all of eBay's spin: the fact remains, there are many other large-scale vendors of fakes that eBay has no interest in confronting. Caveat emptor.

PS Note that eBay feedback on bidancient is currently 4213, with 99.5% positive -- and now finally listed as "No longer a registered user". Only 23 negatives in over six and a half years, which just goes to show you the rather sharp limits of eBay's feedback system. Bad sellers who give refunds don't get bad feedback.

Posted by David on January 28, 2007 5:44 PM