Cautionary tales of two auctions

Mike Brunker Writer • Profile • E-mail

Oct. 10, 2002 - When an online bidder with the handle of “dd9191” paid $1,825 for a nearly complete set of 1959 Topps baseball cards on eBay in July, the winner wasn’t the only one who walked away with a rare and valuable prize. The auction also provided two self-appointed detectives with conclusive evidence that the seller used a phony identity to illegally dupe the buyer into paying an extra $531 for the cards.

While Ebay users who devote considerable time and energy to expose fraud on the site say they are sure that phantom bidding and other scams occur every day, proving it is far more difficult. Even when they can point to suspicious activity that appears to defy rational explanation, eBay policies that the company says are designed to protect the privacy of sellers and buyers usually make it impossible to prove that a crime has occurred. And eBay responds to complaints with boiler-plate e-mails stating that action has or has not been taken, but never reveals details of what it found.

In the course of a two-month investigation into complaints that eBay is unresponsive to reports of fraudulent auctions on its site, especially when they concern profit-generating merchants known as “power sellers,” MSNBC.com examined 24 complaints that fell into the suspicious-but-unprovable category.

Now and then, paydirt!
But every now and then, the seekers hit paydirt.

During MSNBC.com’s review, investigators unearthed evidence that strongly indicated wrongdoing in four of the cases they presented.

Two of those cases are particularly revealing, both for the insight they provide into eBay’s practices in dealing with fraud complaints and for the light they shed on the self-appointed sleuths’ determination and ingenuity in pursuing their quarry.

While shill and phantom bidding are difficult to prove in the online environment, eBay user Bruce Moreland of Seattle found a “smoking gun” when he examined the results of the auction in which the Topps baseball cards changed hands on July 19.

The seller, “brsz-2,” listed contact information at the bottom of the auction as Broadway Rick’s Strike Zone, a sports memorabilia shop in Boynton Beach, Fla. “Bid with confidence - we have been in business for over 12 years!” the tagline read.

The eBay bidding history on the 1959 Topps baseball cards shows the shilling identity -- "nsports" -- prompting the eventual buyer higher in the final hours of the auction.

Moreland soon discovered that the bidder who drove “dd9191” upward in the late bidding on the cards — “nsports” — had provided identical contact information on another auction. He immediately used the company’s online complaint form to alert eBay’s “Safe Harbor” team that the seller and the bidder in the baseball card auction apparently were one and the same.

EBay should have had no difficulty recognizing this as seller or phantom bidding, said Steve Proffitt, a Virginia attorney who specializes in auction law.

‘Strong and powerful evidence'
“If you got the same identifying information from different screen names, that’s pretty darn strong and powerful evidence that would convince most people that he’s bidding up his own items,” said Proffitt. “That’s seller bidding and it’s illegal.”

But “Samantha,” a representative of the “Power Seller Trust and Safety” team, which investigates many fraud complaints against eBay’s biggest vendors, didn’t find the evidence so compelling.

“In accordance with our site policies, we have found that there is not enough evidence to show that a violation has taken place,” she replied in an e-mail to Moreland. “We understand your concern about this situation, and can reopen the investigation if any additional information can be provided.”

The rejection might have stood had not another eBay user, Alan P., who asked that his last name be withheld, followed up with a second complaint. After elaborating on the original complaint and citing eBay’s policy statement that “shill bidding is considered a felony with severe consequences,” he received a response from another power seller representative assuring him that “we have taken appropriate action in accordance with our site policies.”

Even though phantom bidding - identical to shill bidding, but perpetrated by an individual rather than co-conspirators — violates state and federal criminal fraud statutes and constitutes fraud under civil law, the “appropriate action” turned out to be a warning to the seller.

In a phone interview with MSNBC.com, Broadway Rick’s owner Richard Kohl acknowledged that he improperly bid the cards up using an account that he originally created for a friend, but said he did so only to avoid taking a financial hit on the item.

‘I will never do it again'
“I started my piece out at $1 and (the false bid) was to get people up to get the price I paid for it, and not to take a great loss,” he said. “I should have started at the price I wanted. I was warned by eBay. I’m ashamed of myself and I will never do it again.”

The buyer of the baseball cards — “dd9191” — did not respond to numerous e-mails seeking comment.

But another buyer — who ended up paying $200 more than he otherwise would have in another sports memorabilia auction in which “nsports” bid on an item offered by “brsz-2” — said he was never informed by eBay that he had been victimized.

Ronald Marshall of Oakland, Calif., said it was “disconcerting” to learn from a reporter that he had paid too much for the rare 1910 boxing book, “My Life,” by former heavy-weight champion James Jeffries, and that the seller had gone unpunished.

“If they find out somebody is shill bidding they should be removed from the system forever,” he said.

EBay spokesman Kevin Pursglove said that under the company’s privacy policy he could not discuss the specifics of the case, but he indicated that the officials with the company’s fraud-fighting team were “comfortable” that it was properly handled.

Meanwhile, since receiving the warning from eBay Kohl has used the “brsz-2” account only for “private auctions,” which hide the identities of bidders and make it impossible for anyone other than eBay to determine if fraudulent bidding is occurring. EBay help files state that auctions should not be made private “unless you have a specific reason, such as potential embarrassment for bidders and the buyer.”

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