Buyer Beware! If you're buying or selling in an online auction, watch out for snipers and shills

August 30, 1999|By Monua Janah | Monua Janah,Knight Ridder / Tribune

Almost anybody can buy or sell at an online auction. But it helps if you have lightning-fast reflexes, preprogrammed software or a bunch of friends willing to post nice messages about you.

Consumer auctions on the Web are booming and, as they become more entrenched, they're spawning a variety of dubious practices, from outright schemes to the posting of deceptive information.

Though many of these tricks are centuries-old, observers say the relative anonymity of online trading environments gives people the latitude to pull off newer schemes they couldn't get away with at live auctions. To register and bid, all that's needed at most auction sites is an e-mail address, as well as any name, address and phone number.

While online bidders have long worried whether the item they're buying will arrive in the promised condition -- and sellers have wondered about being paid -- these days they might also have to contend with "sniping," "bid shielding" and other bid manipulations.

There's no central reporting of online auction problems, but Web-auction companies contend that reports of trouble are exaggerated.

"Less than one-hundredth of 1 percent of all transactions on eBay result in a problem," said Steve Westly, vice president of marketing and business development at eBay Inc. in San Jose. "That's fewer than 27 per million, which makes eBay one of the safest trading places in the world."

eBay is the world's largest auction site, with more than 1.2 million unique visitors in June, according to Media Metrix Inc. It has 2.5 million items up for auction at a time, and the company estimates that 300,000 new items are added every day.

eBay users and people who buy and sell on other online auctions point to parallel abuses in the offline world.

"Real-world auctions are pretty treacherous as well," said John Horner, a San Jose resident who has been using online auctions for almost two years.

"The terms used to describe scams -- words like 'shill,' for example -- weren't invented for the online world. Unfortunately, high integrity isn't a natural state for many people, online or offline."

Craig and Laura Weiss of Concord can attest to that. They say they've been receiving harassing e-mails and voice-mails from an eBay customer who is angry because the Weisses wouldn't agree to take payment in installments for an item she bought.

Craig Weiss claims the same woman also is "shilling" her own items. In other words, she puts items up for auction, then assumes a different identity and bids the price up.

"When you go and look up an auction she is running, and type in her e-mail ID and request information about her, you get all the same information for the seller and the buyer," Weiss said. "We've told that to eBay, but they won't do anything. They say we don't have enough evidence against her."

eBay's Westly said he wasn't aware of the details of this particular case, but "for the great majority of cases, people are satisfied with or extremely satisfied with our customer support."

While shilling is definitely against the rules on eBay, sniping isn't. Sniping is the practice of swooping in at the last minute with a winning bid, thereby enraging the bidder who thought he or she had just emerged victorious from the fray. Sniping can be done either by being extra-watchful as the auction draws to a close, or by using software such as $10.95 TurboBid, which will automatically submit a bid with as little as 15 seconds to go. That makes it virtually impossible for other bidders to counter before the clock runs out.

Sniping "essentially preys on the ignorance of other bidders and contributes to a general sense of unfairness and unpleasantness at eBay," wrote Barry Goldberg, a Somerville, Mass., resident, on a bulletin board on www.auction watch.com, a site that tracks the online auction world. "I hate the feeling that somebody is lurking in the bushes just waiting to jump out at the last moment in an effort to catch me by surprise."

Others, though, defend the practice, saying it makes the online-auction experience more exhilarating. "I'll tell you why I snipe," said Victoria Elders, an Alabama resident. "It's cost-effective ... [and] sniping is a rush."

But she added, "I always leave a low-ball bid on an item that I like. ... Some snipers never give a first bid, but I think of it as kind of sporting to give a fair warning that I'm interested."

Recently, MSNBC reported on a practice on eBay called "bid shielding," as experienced by an eBay user identified as Jason Hamilton.

Hamilton described the experience on his Web page, saying two bidders had colluded in the scheme. One person put in a low bid and the second a very high bid, "in a price range the average user is not going to spend lightly. [So] there are no other bidders."

Just seconds before the auction closed, the high bid was retracted, and the low bidder won by default.

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