Shill bidding plagues auction sites

Wednesday, July 7, 2010 - 14:22 by Graham Miller

A UK auction seller has been convicted of fixing online auctions by bidding on his own items to hike the price and glean more from potential buyers.

39 year old Paul Barrett will have to pay £5000 and take part in community service after he repeatedly used his two eBay accounts to bid on items he was selling, artificially raising the price in what is known as shill bidding.

This is the first prosecution of its type to take place in the UK after legislation was introduced two years ago to protect those hoping to enjoy safe shopping online using auction sites.

In addition to bidding on his own items, Mr Barrett admitted to giving himself positive feedback to further convince potential customers that they were buying goods from a reputable source.

Mr Barrett was discovered after he sold a minivan on eBay and the buyer informed the police that he had misrepresented its mileage before completing the sale. Although Mr Barrett admitted committing the misdemeanours, he claimed that he was unaware as to the illegal nature of his actions.

Three years ago the Office of Fair Trading said that a study it had authored showed 14 per cent of all users of online auction sites were of the opinion that they had been the victims of shill bidding at one point or another.

The Trading Standards Institute's Paul Milonseski-Reid said that anyone involved in shill bidding was not only damaging the reputation of e-Commerce and making it difficult to carry out safe shopping online, but was also defrauding individuals in a basic and easily identifiable manner.

Lawyer Ian Williamson said that people who believe that they have been caught out by a shill bidder will have a tough time gathering evidence to prove that this is the case and even if evidence is available, working out just how much they have lost is another complex variable to determine.