Shill bidding occurs when the seller of an item on eBay bids on their own auction to inflate the price up artificially. In most instances (not all), the eBay seller will setup another eBay account to push up the price of item(s) being sold through their primary account. Friends or family may also be involved to bid on the auction to ensure items sell for a high price. This is a type of social engineering and has proved to be quite a popular scam in these hard economic times. A few friends felt they were victims of this tactic (especially private auctions) and after we all looked at the bidding history, the bidding behavior seemed consistent with possible shill bidding.
As you can tell it was difficult to prove, but nevertheless we sent our concerns to eBay (see below). Some research around the eBay forums and it appears this type of scam is on the increase – people are talking about it. eBay prohibits this type of selling scam, but it is very difficult to identify. This has become harder to spot since eBay introduced anonymous bidding, where only the seller can see the bidders’ names. It can be difficult to spot, however I suggest you click on the ‘bid history’ link to look at the complete history of the item(s) you are bidding on.
If you suspect you are victim of shill bidding, you should report it using the eBay form with the relevant user ID and item number. If the seller is found guilty of shill bidding, then eBay may suspend the sellers account or even may refer the case to the police.
Safe surfing folks!