height of shill bidding on Flippa

[flippingdesk]

I was just going through a listing in flippa and found a website with bid of $30k and the site generates just around $100 per month. On research i found out that the bids are placed by the seller himself. I will tell you how to find whether the bids on flippa are of real buyers or just another duplicate account of the seller. Listing here: https://flippa.com/3028875-established-expat-retirement-business-w-4874-subscribers-kindle-books

revenueProof:

How to find out whether the bids are real or seller is on shill bidding?
On the bid page flippa shows the number of bids a bidder has placed on flippa in this way .(Bidder 3 has bid on 59 listings from 45 sellers)Now, to find out about the bidder, browse the previous listings of the seller and check the bids whether its placed by the same/different bidders.In this case the seller has used 2-3 fake accounts to raise the bidding interest of the buyer. You can find one bidder who has bid on 59 listings from 45 sellers has placed bids on all the listing of the seller and is just below the winning bid but never won.
See the attached image for proof. I have provided only few listings for reference but you will find the same bidders on all the listing of the seller.

Also, on one of his listing flippa shows suspected link to seller on the bid page.
Link here: https://flippa.com/auctions/2667120/bids

What does it mean? Why is the seller account not banned? Does flippa support shill bidding?

[petertdavis]

As far as I can tell Flippa doesn't put any resources toward rooting out stuff like that, since I was moderating the marketplace back when it was still part of the Sitepoint forums. Back then I'd go in every day, or pretty much every day, and find the shill accounts and other nasties and ban them. It is usually not very difficult to find stuff like that, especially given tools like IP addresses and cookie tracking. I even offered to help them with that when they converted the marketplace over to Flippa but they didn't even bother with as much as a reply to that offer.

A good rule of thumb, that I use when bidding on a Flippa listing, is to just assume that every other bid is a shill. Just assume every single thing about a listing is intentionally deceitful, till it's proven to you that it is not. As far as bids go, do not pay attention to what other people bid. Just figure out what you want to pay for the site and that's your bid, don't make multiple bids. Or better yet, use the BIN if it's at or lower than what you'd pay. Or negotiate a BIN privately with the seller.

[tbcooke]

We certainly don't support shill bidding.

Flippa has a number of internal systems that alert us to shill bidding, however sometimes we do miss it. Our support and marketplace integrity teams are expanding and we're always working to improve our internal security systems.

When you see something like this it's important that you contact us at support (or me directly) and we can take a look at it. As much as I love reading E-P, I'm unable to be here everyday and might miss a thing or two.

[crabfoot]

When you see something like this it's important that you contact us at support (or me directly) and we can take a look at it. As much as I love reading E-P, I'm unable to be here everyday and might miss a thing or two.

A reminder - this forum exists because complaints of this nature were ignored in the past by Flippa. Of course, that was before your time ...

[Thomas]

That is one of the most shameless displays of shill bidding I've ever seen. He's even got his shills to comment about how great the site is - when his multiple and justifications are ridiculous. Even played the classic "my Dad has leukemia" card.

Everything about that listing is laughable. He has $198k in sales - I wonder how many buyers have overpaid due to being bid up by shills on his listings in the past. Hopefully he gets a swift lifetime ban now it's been spotted.

[Kay]

Hopefully he gets a swift lifetime ban now it's been spotted.

There's no chance of it being swift now, Thomas. We don't know how long Flippa has been aware of this problem, but Tim posted about 12 hours ago, so it's at least that long ago. As far as I can see, nothing's changed. The seller hasn't been banned and the auction is still going.

Like you, I feel sorry for people who have lost money - or unnecessarily spent money - because of cheating such as this. It's all very well for Flippa to talk about their internal security procedures - we're not seeing much evidence that they give the buyer any protection at all, or that Flippa will even act quickly when it's become clear that something is amiss.

[Clinton]

We certainly don't support shill bidding.

Flippa does take action against some shill bidders. They do have some systems in place to detect shill bidding.

Howver, we do have to recognise that Flippa benefit from shill bidding. That's the way the charge/fee structure works. So, while in public it pays to bolster confidence in Flippa's "security" and ability to spot shill bidding, isn't it entirely in Flippa's interest to let some shill bidding slip through where such shill bidding can't be easily spotted by other users?

I've proved in the past - and without access to Flippa's database - how easy it is to spot multiple accounts. Shame Flippa don't have the internal talent, even with access to data like the Paypal account used, the IP and email address of the seller etc., to spot these multiple account criminals. Your manager, Andrew, posted once in that thread but didn't return ...possibly because he knew we had a point.

Some of the most prolific shill bidders are the "career flippers" - people who create and list sites regularly. Banning them, or even suspending their accounts for a significant period of time, would cause the number of listings to fall sharply, make the marketplace look deserted and, importantly, lose Flippa considerable revenue.

When you see something like this it's important that you contact us at support (or me directly) and we can take a look at it. As much as I love reading E-P, I'm unable to be here everyday and might miss a thing or two.

Then you should spend more time here, shouldn't you? Our members have found, time and time again, that posting publicly here is more likely to get their problem sorted than by sending Flippa support a private email. It also helps that unlike their postings in your Sitepoint forum and your Flippa blog, their comment here is guaranteed to not get deleted if Flippa find it inconvenient.

Simple question: If the OP could spot this and you didn't why should anyone believe you are serious about blocking shill bidding?

[Thomas]

There's no chance of it being swift now, Thomas. We don't know how long Flippa has been aware of this problem, but Tim posted about 12 hours ago, so it's at least that long ago. As far as I can see, nothing's changed. The seller hasn't been banned and the auction is still going.

Like you, I feel sorry for people who have lost money - or unnecessarily spent money - because of cheating such as this. It's all very well for Flippa to talk about their internal security procedures - we're not seeing much evidence that they give the buyer any protection at all, or that Flippa will even act quickly when it's become clear that something is amiss.

It is a shame. The industry really suffers from sellers like this - the number of buyers I speak to who have been ripped off buying sites is astronomical - many of whom are too embarrassed to ever say anything about it. These would be genuine regular buyers if their first experience had been better - once they've been ripped off once, they are unlikely to buy again (or will be too cautious making offers and miss out on good sites).

I'm a firm believer that responsibility with due diligence should fall on the buyer, but that's not to say I endorse sellers who outright rip people off - whether as a straight up scam or using shills like this to lure someone in. I'm genuinely surprised there have not been more lawsuits in the industry - I would imagine once a few have been successful it will set a precedent for many more.

[David S]

I'm genuinely surprised there have not been more lawsuits in the industry - I would imagine once a few have been successful it will set a precedent for many more.

There will probably never be many lawsuits in this industry.

If someone gets scammed out of $5,000 or $10,000, the cost of the lawsuit itself would probably exceed the maximum recovery, at least in the U.S. where even the winning party normally has to bear its own costs of the lawsuit.

In many cases the buyer and the seller are in different jurisdictions, often in different countries. Unless the purchase document provides that the seller agrees to submit to the jurisdiction of the courts where the buyer is located, the buyer might have to sue the seller in his "home court".

Of course, before you can bring any lawsuit, you have to know who to sue. I suspect that in many scammy deals, the seller is either a shell entity or fake name. You may be able to dig enough to find the "true" seller but that is more work and may not even stand up in court.

Finally, even if you obtain a judgment against the seller, you need to be able to execute on the judgment. First, you have to locate assets of the seller to levy. Assuming that the seller has no assets available to levy against in the buyer's jurisdiction, then collecting the judgment means bringing an ancillary action in the jurisdiction where the assets are located. That is another costly step.

Until the buyers learn to conduct adequate due diligence and protect themselves with an appropriate escrow that holds the buyer's money for a reasonable period to discover any fraud or misrepresentations, the scammers will largely continue unharmed.

[flippingdesk]

The shill bidding issue is not only with the above listing but almost with 30% listings on flippa of which 25% can be found on Most Active Listing page. It seems seller are using this technique to get better exposure for their listing on "Most Active page of Flippa" without paying for the upgrades other than increasing bidding interest.
Also, the most shameless part is that shill bidding are mainly used by established seller who have built good reputation.

It seems flippa will soon be left with those shameless sellers and the investors will wash their hands out from the marketplace once they are exposed about it. Flippa must think about marketplace integrity rather than making quick money through success fee ripping innocent buyers by supporting those sellers. They must think the website market is going to be huge in coming future and try to keep the market clean so that investors can feel secure.

Below is the proof of one more listing from active auction page where the seller is using shill bidding.

Check the 2 bidders bidding continuously on all the listing of same seller.