Apparently, shill bidding is not illegal

[LVSteve]

Came across this in the small print relating to the conditions of a large online auction disposing of seized firearms. Note the parts I have highlighted in bold.

PLEASE READ: At the request of the auction company, this auction permits bids to be placed by the auctioneer, an employee of the auctioneer, or the seller or an agent on the seller's behalf. While *******'s Unified User Agreement prohibits this behavior, in accordance with UCC 2-328, this auction is permitted to engage in this activity by providing this clear disclosure to you, the bidder.

I have rarely seen such a crock in my life. However, examination of UCC 2-328 revealed this gem on this website. The 15 most misunderstood things about the UCC 2-328 | Mike Brandly, Auctioneer Blog

Check out Point 13, again I have bolded the vital part.

“The seller can’t bid.”Yes, he can. The seller can bid if the auction is a with reserve auction with disclosure, and can bid regardless of the type of auction if the auction is a forced sale. If the seller bids otherwise, the UCC 2-328 dictates remedies for the high bidder.

Talk about "learn something new every day". I assume this auction qualifies as a "forced sale", but I still say the seller bidding is a crock. Be careful out there.

 

[DWalt]

An ethical auctioneer would not be a party to shill bidding. However, there are many auctioneers of questionable ethics. There is no way to prevent some friend or family member of the consignor of the merchandise being sold (or even the consignor himself) from bidding up the price.

 

[Whitwabit]

Beware of people who bid on everything but never buy .. If I see that I leave immediately ..

 

[old bear]

Shill biding, such as described borders on, if not downright fraud. It certainly is not ethical, and I for one would never knowingly do business with any company who engaged in that type of activity. Sadly, it seems there is a very real lack of ethics in this day and age.
The only way I see around this, is to make your first bid/offer your BEST offer then let the seller accept or reject it.

 

[vytoland]

if the warning sign says....enter at you own risk....i read and move on.....

 

[Absalom]

As has been said, the minimal identifiers usually required to register as a user/bidder on most popular gun auction sites makes it easy for any seller so inclined to enlist "associates" as shill bidders. How anyone could expect an auction platform to make it "illegal" or to even attempt to police this I do not understand; what would you have them do, have Gunbroker insist every bidder submit a sworn notarized statement that they don't know the seller?

On the other hand, the only "victims" of shill bidding are people chasing after "deals". If you focus on offering a fair personal maximum bid that reflects the value of the gun, you'll never get your BVD's tied in a knot about "shill bidding". You either get the gun or move on.

 

[hittman77]

I'm not sure what difference this would make unless:

1. folks think they're gonna "steal" something at a auction which never happens these days

2. bidders have no self control and decide to bid whatever it takes to buy an item

I bid the maximum I'm willing to pay and never look back. If I get it, great. If I don't, my competition paid too much.

 

[Iggy]

That kind of stuff goes on at cattle auctions too.. I watched the auctioneer take my bid and then that of someone behind me.. I looked and there was nobody behind me. I quit bidding. That left the auctioneer holding $30K of cattle to explain to the seller what had happened.

I have seen the seller bidding on his own cattle too. Fun bidding him up and then leaving him holding the bag for his own cattle. They charge the seller a commission for running them through the ring and he's still got the cattle and they're charging him yardage too.

 

[Rastoff]

2. bidders have no self control and decide to bid whatever it takes to buy an item

This is what the shill is hoping for. They don't want to give an item away cheap so, they bid hoping the interested person will get carried away or at least bid more.

It is unethical. If the seller has a minimum they need to get, put a reserve price on it.

 

[eaglescout316]

I'm not an auction expert, but those exceptions actually make sense to me (sorry folks). If there's a reserve, the seller's already put a lower bound, so helping it get past that seems useful. I could see it being unethical if the seller can bid past that and thus artificially raise the reserve.

If you're forced to auction something and you're willing to spend more than the other bidders to get what used to be yours back, what's the harm in that? I wouldn't think the seized firearms count as a "forced sale," they probably mean certain real estate or vehicle auctions.

Just my opinion, could certainly be wrong.

 

[chaparrito]

I have been to in person property auctions that have "seller has the right to bid" disclaimers. Nobody reads disclaimers. They really should....

 

[chaparrito]

My understanding of shill bidding is not the seller bidding, but rather a seller having someone else bid judiciously to up the price. I do it every year at our local 4H/FFA livestock auction at our local fair. It's in support of the kids who raised the animals and besides, the serious buyers are local businesses who are doing it as PR and a tax writeoff and don't really care how much they have to pay. It backfires once in a while and I go home with a lamb or hog I paid WAY over market price for. That's OK too...

 

[rwsmith]

Even if it was...

... there'd be no way to enforce it. Best thing to do is know what you max bid is and don't let them 'fever' you into a slugging match where you end up paying retail....or more.

There's too much out there and too many decent sellers to play that game.

[ame]https://www.youtube.com/watch?v=Z6EsNyIRG-g[/ame]

 

[PPS1980]

An ethical auctioneer would not be a party to shill bidding. However, there are many auctioneers of questionable ethics. There is no way to prevent some friend or family member of the consignor of the merchandise being sold (or even the consignor himself) from bidding up the price.

Seen it happen. Was not pleased. Auctioneer asked me to leave when I asked them about it- politely. This is why you know what you are willing to pay, do NOT go over that, and stick to your limits. That way, shill or not, you haven't been fleeced.

 

[BB57]

I'm not an auction expert, but those exceptions actually make sense to me (sorry folks). If there's a reserve, the seller's already put a lower bound, so helping it get past that seems useful. I could see it being unethical if the seller can bid past that and thus artificially raise the reserve.

If you're forced to auction something and you're willing to spend more than the other bidders to get what used to be yours back, what's the harm in that? I wouldn't think the seized firearms count as a "forced sale," they probably mean certain real estate or vehicle auctions.

Just my opinion, could certainly be wrong.

In this veery limited case, I agree. From time to time I'll bid on a reserve auction, and have no one bidding against me. Thus, it never reaches the reserve or my maximum bid.

In that case, I wouldn't mind the seller bidding his reserve bid. If My maximum bid is over it, I win. If not, oh well, he's going to have to pay the listing fee - but for that price, he knows exactly how far I was willing to go.

 

[Lee's Landing Billy]

Happens ALL the time at car auctions. They are called "chandelier" bids. The auctioneer points at the lights and takes a fake bid trying to run the bid up to the reserve.

 

[Jim1392]

I had this happen to me on GunBroker. There was a top seller that had the same two shill bidders run up every one his auctions. I sent GB a long email with all the open and sold auction numbers for this seller. I included the screen names of the two shills that would run up every auction and the stop bidding. I'm going to say it was over 40. I most likely could have found plenty more since he was a top seller and he had at least 75 guns listed.. GB did NOTHING. They just want the money they could care less about how fair the auction is, or if the seller is using shills. Now before I bid I make sure I research the seller and his past closed and open auctions to see who's been bidding.