This is pretty interesting stuff. According to Iraq Museum International, it has detected a pattern of what it calls “eBay sniping”, in which bids are intentionally and artificially inflated to ensure that a legitimate bidder pays top dollar, and has managed to catch the thiefs (for that is surely what they are) in the act. While this is certainly nothing new, the expose is pretty interesting.
Why is Iraq Museum International involved in exposing eBay sniping, you may be asking? According to them, “Iraq Museum International is a volunteer organization created after the looting of the Iraqi National Museum in Baghdad. It seeks to accelerate the recovery of Iraq’s stolen treasures by bringing the rich history and cultural heritage of Iraq to the world. It invites the active participation of the Iraq reconstruction community as well as students, professors, professionals and cultural enthusiasts from all countries,” and here is what they have to say about the eBay sniping:
Iraq Museum International uses files still posted on eBay to recreate minute-by-minute how an eBay “sniper trap” cheated an online casino.
(PRWEB) August 15, 2005 — A leader in online gaming is among the latest victims of fraud on eBay. The online casino fell prey this week to a “sniper trap,” involving a bidder’s retraction and two phony bids.
The casino was the winning bidder in a highly-publicized eBay auction of a candy wrapper which ended on August 12, 2005.
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While monitoring online auction sites for the sale of illegal artifacts, Iraq Museum International (http://www.BaghdadMuseum.org) recognized in the candy wrapper auction a pattern it had been studying. Its line-by-line analysis of the auction’s bidding history, still posted on eBay, shows that the casino was cheated by the actions of at least one other bidder.
Timeline:
1. On August 6, 2005, the high bid was $705 placed by a bidder using the ID “terrestrial_seti.”
2. On August 7, 2005, the same day a press release was issued about the sale, a bidder using the alias “keepitbidding” placed a $3,000 bid on the candy wrapper.
3. This action triggered automatic bidding on behalf of “terrestrial_seti” up to the secret maximum set by “terrestrial_seti” the day before.
4. After placing the $3,000 bid, “keepitbidding” could see that “keepitbidding” had the high bid at $1,411. “Keepitbidding” could now calculate that “terrestrial_seti” had a secret maximum of $1,406.
5. Working quickly, “keepitbidding” filled out a bid retraction form giving eBay the excuse, “Entered wrong amount.” The retraction was automatically executed just 52 seconds after the $3,000 bid was placed by “keepitbidding.”
6. One minute later, “keepitbidding” placed a new bid on the same item, this time in the amount of exactly $1,400, knowing that this would be automatically outbid by “terrestrial_seti.”
7. The ruse worked. EBay’s automatic bidding system bid $1,405 out of the account of “terrestrial_seti,” just one dollar short of that bidder’s maximum. As a result, the high bid suddenly doubled. Like a wild fluctuation in the stock market, this heightened bidder interest in the item, drawing thousands of visits to the auction listing.
8. Undetected on a high-publicity day this scam touched off a bidding war which led to the casino placing a winning bid of $2,815.43 for the item.
The online casino is the kind of “mark” targeted by such auction manipulation. It is known for aggressively bidding on unique items on eBay such as the tatooing rights to a woman’s forehead and a grilled cheese sandwich reportedly carrying the image of the Blessed Virgin Mary.
The auction’s bidding history reveals one of the longest lists of bid retractions or cancellations in eBay’s history. A total of 10 bids ranging from $710 to $8,000 were cancelled by either the bidder or the seller.
This case study is a continuation of Iraq Museum International’s bulletin on “sniper traps” and other practices on eBay, as it formulates its recommendations to the antiquities market and monitors the Internet for sales of artifacts stolen from Iraq. To see supporting documents for the example above and how a variation of the “Sniper Trap” played out in eBay’s antiquities market, visit Iraq Museum International at http://www.BaghdadMuseum.org.
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Shill Bidding is not as bad as you think, just have to have the bidder know the max they will pay and that is it. It is only affects when they pay more than its worth. If they are going to bid $400, then bid $400, not $1000.
“Claims expert” woah, an expert in what? Asses?
Good call Don. “Author of this article is quite ignorant” says it all.
Author of this article is quite ignorant. This is called shill-biding, not sniping. Shill bidding is fraud, while auction sniping is perfectly legal and allowed.
This does not have a damn thing to do with sniping.
This is a practice as old as online auctions. eBay has mechanisms in place to spot these bids, though their lumbering system is neither fast nor complete. It is unfortunate that Iraq Museum International found it necessary to create their own term for this, “eBay sniping,” as this is already termed “shill bidding” by eBay and most industry professionals, and “sniping” is something else altogether.