Bidding Site Fraud Happens

I watched a friend logged on to a bidding site, placing bids on a cable to fix a broken shifter on their bicycle. Each time they bid, within a few seconds, their bid was trumped by an auto bid.

Curious by nature, I wanted to see who was doing the auto bidding. Turned out the auto bids were listed only as “Dealers”. There were three different “Dealers” who submitted auto bids over my friend’s bids.

I am thinking, why would several “dealers” auto bidding on a mundane item with a ten dollar shipping charge? There was not a lot of room left between the bid and buying locally. Per my friend it was getting close to the cost of gas and sales tax.

What resale profit is there after over bidding a live human bidder when the price is this high? There is none. Nobody is going to buy a cheap product at more than the price is worth, Dealer or not.

I know little about bidding sites. I have never done any business with one, though I have been to auctions and know how they can be manipulated. Somehow these “Dealers” are managing a fraud scheme without tripping any flags on the bidding site that monitors the bidding for fraudulent behavior.

In real world auctions, though it is rare, there will be a group of four or more people in the crowd to bid up prices. If they ‘win’ the bid, the item is simply set aside for another auction on another day. No one loses, except the unsuspecting bidder who are cheated out of what should have been their purchase.

In the case of the human bidding with auto dealer bidding over them on a bicycle cable it doesn’t need but a few bids to spot what’s going on. In my friends case it was four bids. My friend ran into a Fraud Coop, auto bidding on randomly assigned products sold by other members of the Fraudulent Price Gouging Coop. If the Dealer’s bid is the winning bid, the transaction takes place per bidding site regulations, the money is refunded in another manner, and the product never gets shipped.

The winning “Dealer” now becomes the seller, with the original Dealer the shipper. I thought what I was watching was a carefully thought out scam, involving many people.

The people involved in the fraud could be anywhere around the world, placing auto bids driving up prices for themselves, gouging customers who aren’t aware of what what is happening. If funded well, more than one or two people are all thats needed, only virtual computers, physically located in disparate locations, far apart from each other with no obvious connections.

No matter what someone buys, there is always room for cheating the buyer or seller out of money. No matter how policed any sale is, someone may be willing to cheat innocent buyer. After all who is going to take time to pursue a real claim over a few dollars?

Caveat Emptor – Buyer Beware.