Help!  I am a victim of shill bidding.  What should I do? Found Here

You found an item that you really like.  So, you place a proxy bid with a relatively high maximum in order to improve the chance of winning an auction.  Then, you notice that some mysterious bidding patterns are taking place.  Someone bids above you, retracts, and then bids right under you.  Or maybe some low feedback bidder seems to reside on this seller's auctions.  You are not sure about it, but something seems fishy here.  You begin to wonder, "Have I been shilled?"

What is Shill Bidding (aka shilling, bid padding)?
Simply, this is where a seller bids on their own auctions.  This can also include a friend or family member bidding as well IF the purpose of their bidding is to lose and help get the seller a higher price.  This practice is forbidden on Ebay.

Why does the seller do this?
It is meant to make the seller more money.  They figure if the shill bids (under a different ID) are made on an item, it will make the item appear more attractive to other bidders.  After all, many people might look at items with several bids and assume that this is a "hot" item based on the number of bids.   A shill bidder might also try to bid against someone who has placed a high proxy bid.  Here, the idea is to get just under the legitimate bidder's maximum to gain the most profit.   In either case, the seller could get caught doing this.  They might not know that it is wrong, which is typical of some newer sellers.  Others know exactly what they are doing by engaging in shill bidding and take it as a calculated risk.  It is possible that a shill bidder will win their own auction if no one bids above them.  This is also part of the risk that they take.

Why it is bad for buyers
Had it not been for the shill bidder, the buyer may have acquired the item for a lower price!

Why it is bad for sellers
They could get caught and face suspension.  As for the good sellers  (the majority) in the Ebay community, this has become an embarrassment to us.  It makes us all look bad.

What happens if a shill bidder is caught?
Ebay officially states that the first time offense will lead to temporary suspension.  If they do it a second time, suspension will be indefinite.  Also, shill bidding is quite illegal, so it has the potential to be prosecuted!

How does one detect shill bidding?
This is the tricky part.  I would also like to put in a disclaimer here.  Often, it is impossible to determine with 100% accuracy that shill bidding is occurring.  There are bound to be many cases where one may suspect a shill bidder, yet the auction has been legitimately run.  Then, there are the cases where nothing appears wrong, but shill bidding has taken place.  It is not always easy to detect.  A very intelligent shill bidder can cover their tracks very well.  Some of the indicators that will be presented here are warning signs (some stronger than others).   Some of the most common patterns that have made their way to Ebay's message board forums are the following:

(1) You are outbid.  Later, the high bidder retracts and then rebids somewhere near your maximum bid.  This seems to be a common type of shill bidding.  A common characteristic of this type of bidder is low feedback, multiple bid retractions, and a tendency to only bid on the seller's auctions.  Here is the typical scenario:

You bid 100$ on an item that is worth that much to you.  However, you take the lead at 50$ with your maximum proxy bid set at 100$.  Someone bids $1000, taking the lead at $101 (just enough to beat your maximum).  You would never know that they bid $1000, because maximum bids are kept secret by Ebay.  However, everyone knows that your maximum had to be 100$, because the high bidder only leads by one increment.  Sometime later, the high bidder retracts with some excuse.  It could very well be "wrong amount".  You are now the high bidder at 50$ again.  Suddenly, that same bidder rebids at 99$.  You are now winning the auction with a 100$ amount due to your proxy.  There are several variations of this particular scam, but this seems to be the most common one.  The seller has squeezed you to your maximum.  Sure, you were willing to pay the 100$, but you were wondering how much you might have saved had it not been for this individual.  If you see this happen to you, it might be worthwhile to notify Safe Harbor.  Something like this could still be legitimate, but the odds are against it.

(2) You place a maximum bid of 100$ on an item, but for right now, your bid registers 50$ (because this is all that is necessary for you to take the lead).  During the life of the auction, some low feedback bidder whittles away at your maximum bid.  They never outbid you, but certainly raise the price of the item.  Perhaps you like what this seller has up for auction.  So, you look at some of this seller's other auctions.  You notice that the bidder is winning some of the seller's other auctions, but at a relatively low price.  Out of curiosity, you use the "Search" feature to look up this person's bidding history.  You notice that they never win an auction and that they only bid on that seller's auctions.  There could even be multiple bidders that display this pattern on that group of auctions.  Common  characteristics of this shill bidder include low feedback and bidding specifically on that seller's auctions.  If you see this, it is time to send Safe Harbor a note.  Be advised that many buyers like to stick with certain sellers.  Perhaps this is due to a narrow category or maybe a good business relationship.  However, you would expect them to win an auction from time to time.

(3) This is a risky type of shill bid, but it has been known to happen.  You see an item that you like that has a current bid of 50$.  You decide to just bid the next increment and see what happens.  Now, you lead at 51$.  Sometime later, you get that famous "outbid" message in your e-mail.  You think about it and bid again.  Now, you lead by another increment.  Later, that same person outbids you.  Then, you bid again, and so forth.  One of three things will happen:  You will either win the auction by one increment OR they will win the auction by an increment OR someone else will come in and beat the both of you (perhaps a "snipe" bid?).  You perform a bidder search out of curiosity and maybe see the same pattern in (2) above.  They have little to no feedback and only seem to bid on this seller's auctions.  There is another facet to this type of scam.  If the shill bidder wins, the seller may try to sell you the item claiming that the high bidder backed out.  Be especially suspicious if the seller contacts you within a day of the end of auction.  After all, it takes time to try and work things out with the high bidder!  Personally, I do not like to make this type of transaction, because it is not considered an Ebay sale.  That means that the buyer's protection insurance would not apply here.  I might be willing to buy the item as the 2nd highest bidder if they have some dot-com address and online business that proves they are a dealer of the item.  Of course, that is just me.  Feedback can only be left for and by the highest bidder, so no one else in the Ebay world will know how this transaction ended.  That could make it easier for a seller to hide their shill bidding operation to some degree.   Again, this is another type of pattern that I sometimes see brought up on the message boards.  It does not guarantee that something is wrong, but does raise suspicions.

These three patterns seem to be the most common.  However, there are probably many variations of these as well as more scenarios.  A seasoned buyer eventually learns what seems wrong and what seems OK.  Again, I cannot stress this enough--there may be nothing wrong in actuality although there seems to be something wrong.  If you report strange activity to Safe Harbor that looks like shill bidding, and they reply back that there is no problem, don't worry about it.  It is better to be safe than sorry.  The investigation will be discreet.  In meantime, you should assume this is a valid transaction until Safe Harbor tells you otherwise.  There are many people who back out of an auction where nothing wrong happened.  That is certainly not fair to the seller.  If Safe Harbor does tell you that a problem exists, they will be able to assist you with the next appropriate steps.
 
How do I report it?
First and foremost, I would say--use your best judgment.  I do not intend for this page to initiate a witchunt against everything that could remotely resemble a shill bid.  If you really think that a genuine shill has taken place, it may help to ask someone else what they think about it.  If it looks like a problem, you need to send all of the information about that auction to Ebay.  Include the auction number, why you think this is shill bidding, and the appropriate user ID's.  The email address is safeharbor@ebay.com.  They will investigate the auction(s) and do so discreetly.  If you have won the particular auction, be prepared to pay for the item if Ebay has determined that the auction is legitimate.  If the auction has not concluded, you may still send the information to Safe Harbor so that they can look into this.

How can I safeguard against shill bidding?
(1) Bid as late as you can.  For the veteran posters in the Bidding board as well as myself, the most favorite weapon is the late bid (the later, the better).  You cannot be a victim of shill bidding if you do not even give the seller a chance to bid against you.  Even this method is not foolproof.  Shill bidding may have occurred to someone else earlier in the auction.  If you bid late, they will not get a chance to whittle away at your maximum bid.

(2) Notify Safe Harbor when necessary.  If there is good evidence of a shill bid, let Safe Harbor know.  They have the software to look at things that we cannot, such as common ISP's, email addresses, home addresses, credit card numbers, etc.  If they catch a shill bidder because of your vigilance, then you have rid Ebay of one of these unscrupulous people.  Good job!  Again, use good judgment.  Some people have a tendency to cry "wolf" on the message boards when there is nothing apparently strange about the auction.

(3) Know your seller   Before you bid, look at some their past auctions and check for bidding patterns.  Look through the auctions and check the seller's  feedback for low-feedback NARUs.  NARU indicates a non-registered user.   Usually, these people have been suspended for some reason.  It could be possible that they were once the seller's "accomplices".  Also, look for those warning signs that are given above when trying to detect a shill bidder.   No one can protect you from shilling better than you can yourself!