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EBay Bid Shield or Shielding Scam

2013-04-03T09:40:52  +
EBay Bid Shield or Shielding Scam

EBay "Shield" or "Bid Shielding" is a scam used by scammers to win EBay bids on very expensive items cheaply. This scam targets EBay sellers who are selling expensive items without a reserve price. A reserve price is the lowest price at which a seller is willing to sell an item. If a seller doesn’t want to sell an item below a certain price, he/she can a set a reserve price.

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This scam involves using multiple EBay accounts. One account to bid very low on an item and other to bid very high on the same item.

This is how the Bid Shield scam works

  1. The scammer uses his first EBay account to bid very low on an item (usually very expensive). 
  2. Scammer then uses his second EBay account to set a very high bid on the same item that other legitimate bidders would not be able to match, discouraging them from bidding. Because other bidders were discouraged by the very high bid set by the scammer, the only bids for that item would be the low and high bids set by the scammer. 
  3. At the last moment before the auction closes, the scammer withdraws the very high bid he/she had placed. This will leave the very low bid that the scammer placed first, as the winner of the auction.

Here is an example:

If an item cost $500 and the seller forgot to set a reserve price on this item. The scammer can place a low bid of $20. The same scammer will then place a very high bid of $6000 on the same item.

This high bid will discourages other ligitimate bidders from bidding on the same item. This leaves only the two very low and high bids set by the scammers for the same item.

At the last moment before the bid closes, the scammer withdraws the very high bid ($6000); leaving only the very low bid ($20) as the winner of the auction.

Ebay rules state a bid is a legal binding contract and you cannot cancel within the last 12 hours of an auction unless you contact the seller. Although bidders cannot cancel the bid themselves with the last 12 hours, these people will contact the sellers and ask them to cancel the bid for some reasons. The naive sellers will cancel the bid not knowing that they are being scammed.

Sellers are advised to ensure that they place a reserve price on the items they are selling on EBay and do not  honor suspicious bid cancellation requests.

Please share with us what you know or ask a question about this article by leaving a comment below. Also, check the comment section below for additional information, if there is any.

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Comments, Questions and Reviews ✍
(Total: 5)

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  • Posted: Oct 22, 2017 12:13 PM by an anonymous user from or near: Summerfield, Florida, United States

    I think the seller can also cancel an auction by declaring the item to be lost or damaged. One lie to fight another lie.

    Also something to consider is that instead of multiple ebay seller accounts for one person it can be an agreement between multiple ebay sellers. So tracing the shill bidding would be harder.

    A seller should have the right to withdraw the sale at any point prior to payment. God knows ebay gives the sellers a hard enough time as it is.

    delete


  • Posted: Jul 29, 2013 2:05 PM by an anonymous user from or near: Manchester, Manchester, United Kingdom

    The high bid would have to be placed within one hour of the auction end. The price could be quite low at this stage, since a lot of bids are placed near the end of an auction.

    The low bid is unnecessary, but this second bidder (the one that will win the item) also places a high bid. The price is now high enough to deter any other bidders

    The first high bidder retracts the bid seconds before the end of the auction, leaving no time for further bids to be placed.
    The closing price immediately drops to one increment higher than any other bids in favor of our second bidder.

    delete


  • Posted: May 22, 2013 8:41 AM by an anonymous user from or near: Brisbane, Queensland, Australia

    Your example is wrong. If the high bidder puts $6000, the current high bid will only be an increment above the ow bid of $20. So it will be $21. With ebay, it is the 2nd highest bid that dictates the price, not the highest bid. Also to pull his 'scam' off you would have to place the high bid in the last 12 hours of auction ending, otherwise you won't be able to retract the bid. There's a good chance the item would have received many legitimate bids by that time.

    delete


  • Posted: Mar 30, 2013 8:55 PM by an anonymous user from or near: Montego Bay, Saint James, Jamaica

    Yes, you are right. Ebay rules state a bid is a legal binding contract and you cannot cancel within the last 12 hours of an auction unless you contact the seller. Although bidders cannot cancel the bid themselves, these people will contact the sellers and ask them to cancel the bid for some reasons. The naive sellers will cancel the bid not knowing that they are being scammed.

    delete


  • Posted: Mar 30, 2013 6:15 PM by an anonymous user from or near: Brisbane, Queensland, Australia

    This is categorically untrue. Bids cannot be cancelled within the last 12 hours of an auction. Max bids do not scare anyone away unless someone else exposes your max bid by bidding to that amount. This article is shockingly short of facts and should either be retracted or amended accordingly.

    delete


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