Home Ebay Seller Convicted, Fined for “Shill Bidding”

Ebay Seller Convicted, Fined for “Shill Bidding”

What’s to stop you from posting an auction on online auction site Ebay and then bidding on it yourself from another fake account to boost the price? Nothing, if you don’t mind the idea of breaking the law and possibly facing jail time and a $7,500 fine when you get caught and convicted.

Paul Barrett was the first U.K. seller “to be prosecuted for artificially inflating prices by bidding on his own eBay auctions has been told to pay £5,000 in fines and costs, and ordered to do 250 hours community service,” according to an article in The Register.

Barrett first plead guilty to the charges last April, arguing that he did not “realize bidding against himself was illegal”. He was convicted of ten offenses of a consumer protection law passed in the U.K. in 2008 and 2009 and could have been fined up to $7,500 for each offense. According to the Register article, Barrett could have also faced jail time, but Judge Peter Benson said a clean record kept Barrett from behind bars.

Ebay spokesperson Vanessa Canzini told the Register that Ebay is “extremely pleased” with Barrett’s sentence.

“While this case was not solely about shill bidding, we hope that it highlights how seriously we consider the practice of artificially increasing prices. This practice is not only prohibited on eBay as it damages the integrity and fairness of trading on our site, but it is also illegal. We continue to invest over £6 million every year in industry leading technology to proactively detect shill bidding. We will always work closely with law enforcement agencies to ensure that, on the rare occasion someone attempts to follow in Barrett’s footsteps, they will be stopped and will face the consequences.”

In this case, it doesn’t seem that Ebay needed its multi-million dollar software, as Barrett used the same contact information and IP address to place the shill bids and was discovered not by this type of technology, but instead because the odometer reading on a minibus he sold had been tampered with. The resulting investigation led to the discovery of Barrett’s artificial price inflation.

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