Shill bidding vs. taking bids off the wall.

Ting-Tang

I know that shill bidding is against the rules in ebay world, but is it actually illegal in real life auctions?


I only wonder because I've been in the antiques trade for years and I know for a fact that many auctioneers will routinely take bids off the wall. In effect this is "shill bidding" by the auctioneer - i.e. artificially driving up the price.


Don't get me wrong, I'm not condoning shilling, and it isn't something I'd ever indulge in, it's just that I wonder why auctioneers are allowed to get away with it and other people aren't.....

soolin

Ting-Tang wrote: »

I know that shill bidding is against the rules in ebay world, but is it actually illegal in real life auctions?


I only wonder because I've been in the antiques trade for years and I know for a fact that many auctioneers will routinely take bids off the wall. In effect this is "shill bidding" by the auctioneer - i.e. artificially driving up the price.


Don't get me wrong, I'm not condoning shilling, and it isn't something I'd ever indulge in, it's just that I wonder why auctioneers are allowed to get away with it and other people aren't.....

One auction house I used to attend took bids off the wall, but punters would call them on it and ask where the bidder was. It got quite confrontational and surprisingly enough the auction house closed down.

I still attend about 6 auctions routinely and some are very small, certainly small enough to notice if auctioneer was fabricating bids, but even in the larger places the dealers aren't mugs and I would fear for the auctioneers safety if he tried to play fast and loose with them.

Where there is a reserve or a left bid then it is always done properly by bidding against the book.

Ting-Tang

Yes, I don't think it's as common as it used to be but I'm sure it still goes on....

RFW

If you look at the conditions of sale, most, if not all, auction houses will have something along the lines of "the auctioneer reserves the right to bid on behalf of the vendor.". That pretty much covers every eventuality.

It may well be illegal but having worked as an auctioneer for a number of years, I'd say it was close to impossible to prove. You'd really need a confession from the auctioneer.

I would often get left genuine bids on scraps of paper. If I was dishonest I could easily say someone had done that.

I've been to thousands of different auctions and only know of one that never takes bids off the wall. Pretty much every sale room does it. I can usually spot how blatant it is within five minutes of being in an auction room.

As a customer I'd always advise to never pay more than you were planning to before the auction started.

As an auctioneer one of the problems to run a successful business is to keep buyers and sellers happy. So even if you sell without reserve you would not want to sell a £1000 item for £10 just because there was only one interested party in the sale room.

Ting-Tang

Yes you're right, and it doesn't really bother me who or what I'm bidding against - I'll go up to my limit and then drop out if it goes beyond that.

shaun_from_Africa

Whether on ebay or in a bricks and mortar saleroom, shill bidding is illegal but legal cases are few and far between.
http://www.theguardian.com/technology/2010/apr/20/ebay-seller-convicted-auction-fixing
and this case only made it to court because TS were involved due to a clocked motor.
However, whilst ebay say that they will take action against shill bidders, the reality is that in the large majority of cases they either totally ignore any reports or if action is taken, it's generally just the shilling account that gets closed down.
After all, shill bidding increases the final selling price of the lots, therefore ebay make more money from the final value fees.

mrcol1000

I know of an auction house where it is very common. I often stop bidding as a mystery person is beating every bid I make and lost. The following week the same item has come up again and I have won it for far less than I bidded the previous week. In fact some weeks its worth taking a risk in pulling out lower than you are willing to go as you'd most likely get it cheap the following week.

This auction house either a) Has a lot of items in exactly the same condition that come up every week b) Have a lot of bidders who do not pay c) Are up to no good.

RFW

mrcol1000 wrote: »

This auction house either a) Has a lot of items in exactly the same condition that come up every week b) Have a lot of bidders who do not pay c) Are up to no good.

It could be all three!

The only time I would take reserves was from big sellers who had more stock to get rid of. They would usually set a reserve on the first sale and then if it didn't sell would sell without reserve for the next sale. Big companies never want the stock back once it's off their premises. So going back to the second sale is often a good idea. Patience is very rewarding when visiting auction houses. My worst sales were always the one after a really good one, that's when the bargains went out.

I knew of one saleroom that had a handful of regular customers. The auctioneer always took bids off the wall and all his customers knew it. He had set prices for everything, it ended up as a game between them. He'd have done as well opening a cash & carry but no one seemed to care. Funny old business, can't say I miss it!

Blackjack_Davy

mrcol1000 wrote: »

I know of an auction house where it is very common. I often stop bidding as a mystery person is beating every bid I make and lost.

I saw it on TV's Flog it! or one of those antique shows it was explained the bids were "off the wall" and the first time I'd heard the phrase I remember thinking "isn't that shill bidding...?" Pretty sure he didn't get arrested for it.