Quote:
Originally Posted by bnorth
Shill bidding is not illegal everywhere. Would have to find out the law in Daniels location.
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That I certainly did not know; I would think that {shill bidding} is a conflict of interest and theft by deception, unless there is a published reserve.
Perhaps, Scott can confirm; but this was my interpretation, with regards to shill bidding. [I]
In most states, the seller or their agent (which can certainly include the auctioneer) may be allowed to bid on behalf of any minimum reserve prices set by the seller, as long as “SUCH BIDDING IS DISCLOSED” to the bidders. This is also the primary difference between “shilling” and “protecting the reserve”.
There are basically two ways to “protect the reserve”. One method method is to “Pass” the item, if it does not meet the reserve. The other is “bidding on behalf of the reserve” and may only be done if DISCLOSED to the bidders (note the emphasis). Some auctioneers may also use a consignor bidder number or “house number”, in such cases that the reserve is not met, to keep things flowing smoother and allows for tracking during settlement of the auction. The key point is “DISCLOSURE”. If the auctioneer has not disclosed that such bidding may be allowed, then it would be considered “shilling” and would be considered fraudulent bidding.
With regards to ebay; this is there take
Shill bidding can happen regardless of whether the bidder knows the seller. However, when someone bidding on an item knows the seller, they might have information about the seller's item that other shoppers aren't aware of. This could create an unfair advantage, or cause another bidder to pay more than they should. We want to maintain a fair marketplace for all our users, and as such, shill bidding is prohibited on eBay.