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Thread: I'm another victim of shill bidding at Flippa

  1. #1
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    I'm another victim of shill bidding at Flippa

    [[Split from here - Admin]

    I am a new victim of shill bidding on a high value transaction on Flippa. I am a new member to flippa and was not aware of the amount of shill bidding that goes on everyday. After I placed the Highest Bid I did some research and using this thread I was able to see the pattern. I still have not paid any money yet because of my suspicion from the minute I put in my bid based on the last msg seller had sent me. That msg was a huge red flag but I acted on it without thinking twice. Please let me know what are my options.

    I have reached out to Bryan O'Neil and Tim Cooke 4 hours ago and waiting on a response.
    Last edited by Clinton; 3 July 2014 at 11:09 am. Reason: To split thread

  2. #2
    Moderator Kay is a Premium Member
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    I can sympathise with you about this waiting to hear from the people you contacted, but four hours isn't such a long time for a small business to respond. People have to sleep and do other things. And we're in time zones all around the world. That said, one might expect that a behemoth such as Flippa could be a bit quicker off the mark to respond to customers. Sadly, they're rather slow. As you'll have seen from the earlier postings in this thread, it took them about 12 days to respond to the concerns expressed by the member who posted here.

    Just out of interest, why did you contact Bryan? He's not a Flippa employee (as far as I know). Tim is - he's the guy who usually responds on behalf of Flippa here, but he doesn't seem to be around very much as you can see from his post count. Fingers crossed you'll get some answers soon. You probably have more chance of it by posting here than you would by contacting Flippa itself.
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    Thank you so much for your quick response on my last message I had posted earlier today.

    Attached is the listing I had 'WON'.

    https://flippa.com/3083467-wordpress...es-134-754-t-o

    If only I had gone through your thread before I would have known the huge red flags just by looking at the bidding trends itself. I was in talk with the seller / broker constantly back and forth trying to do a thorough due diligence and as soon as I put in my first bid I got out bid with in seconds through auto bid. With in seconds the seller messaged me with the following:

    'by the looks of the bid that was an automatic final bid mate, one more $100 will put you in the lead'

    Without thinking twice I put in my bid right away but after that I started thinking about his last message and it seemed like the seller knew the max amount of the autobid. That was a red flag but it was too late. Then I started doing my research to see how the seller can know the max offer through legitimate means. During that search I came across your thread and was able see the shill bidding by looking at the bidding pattern. From the trend itself one can see that Bidder 2 and Bidder 3 are the sellers shill buddies.

    Since I have not started any payment process, what is the risk to me?

    The business being sold is legit but cant say the same for the final price.

  4. #4
    Administrator Clinton is a Premium Member
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    I've split this to an independent thread, rifs84, to stand you a better chance of getting noticed.

    I had a look at your auction. To me the most suspicious circumstances are when there's only one bidder bidding against me. When there are multiple bidders it seems less likely to be shill bidding. I say less likely but it's not impossible - several sellers have mastered the art of shilling bidding and have numerous accounts they use for the purpose.

    I'm not saying this of your seller as I have no way of knowing if he's one of the bad guys, but a quick look at his profile shows that he has $157K of completed transactions. That could be a good thing as well as a bad thing. If he's a career seller - someone who regularly makes sites for resale in Flippa - it's probably a bad thing as he knows the system very well and is in a good position to manipulate it. If that $157K was from one or two big sites sold in the past it paints him as more likely to be a seller of genuine sites. In this case, unfortunately, Flippa doesn't disclose quite what all that $157K was about. It's not even like his account is a legacy account carried over from when the marketplace was a Sitepoint - which would account perhaps for some missing data. Given his "super seller" status icon I suspect he's the former - MFF seller - rather than an occasional seller of a genuine site. But, OTOH, he may be a perfectly nice guy selling a genuine site and without any shill bidding in the background.

    Legally, you're obliged to continue with the contract unless you can prove shill bidding. But the only people who are in a position to prove the connection between the seller and those bidders .... is Flippa. And there won't share with you the IPs of those bidders, their email addresses, the countries they're from and all the other data they have which would prove invaluable in making the connections. (Flippa themselves have an incentive to NOT make the connections as it means more success fees for them on completed auctions). Perhaps you could try a test case and serve them court orders to disclose the IPs of those bidders. I doubt such a case would succeed though.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    Hi Clinton - Thank you for your feedback. For me two very obvious red flags:

    1) the PM from seller stating:
    'by the looks of the bid that was an automatic final bid mate, one more $100 will put you in the lead'

    How can the seller know that it was the 'final' bid from 'Bidder 2' unless he knew the max amount set by the bidder through autobid?

    2) The bidding trend of 'Bidder 2' and 'Bidder 3'
    • Bidder 3 ( | $1.09K )
      $23,000
      Yesterday

      Contact

    • Bidder 3 ( | $1.09K )
      $21,207
      2 days ago

      Contact

    • Bidder 3 out bidding himself after few days. That is a big no no. When you check other items sold by the same seller like the one in this link:
    • https://flippa.com/auctions/2983449/bids
    • You see the same bidder showing up there as well, this time listed by Flippa as 'Bidder 4' but you see the same amount of completed transaction $1.09k. Once again when you see the bidding trend, the bidder keeps trying to spike up the price by out bidding himself.

  6. The Following 2 Users Say Thank You to rifs84 For This Useful Post:

    Chabrenas (4 July 2014), Clinton (3 July 2014)

  7. #6
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    Quote Originally Posted by rifs84 View Post
    Bidder 3 out bidding himself after few days. That is a big no no.
    Actually, there have been a couple of times in various auctions where I have bid twice (or more) without intervening bidders. If the reserve has not been met, and no one else has been bidding, the only way to try to reach the reserve is to bid again. I don't know if that was the case in this auction, but it can happen.

  8. The Following 2 Users Say Thank You to David S For This Useful Post:

    Chabrenas (4 July 2014), Clinton (3 July 2014)

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    David,

    Thanks for your input. Both the bid happened after the reserve was reached. Would you out bid yourself after the reserve is reached?

    As a follow up to my last message the reserve was met on June 27 and as noted above the over bidding happened 'Yesterday'.
    Last edited by Kay; 3 July 2014 at 7:49 pm. Reason: To merge posts

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    Hey rifs84,

    It doesn't make much sense that the seller would "know" the bidder's last bid, but is it possible that:

    1. He misspoke? Maybe he "assumed" it was the last bid?
    2. The bidder had communicated this privately to the seller? "I'm only going up to $XX,XXX on this deal"?

    A couple other things:

    1. Is it worth it to you at your final bid?

    There was an auction I was looking at where the numbers didn't add up. The seller was claiming income that I thought was definitely suspect. The interesting thing - I didn't care. I was buying based on the value I would get out of the platform. Even if the site made $0 per month, it was worth it to me up to a certain point, and that's where I was at my highest bid. (The seller ended up absolutely disappearing, which was odd - really wanted that site!)

    Let's just say there WAS definitely shill bidding going on here. Other than costing you more money, is the site still a fit for you at that price?

    (Look, there's something to say about not wanting to do business with someone that shady - if they're shill bidding, what ELSE are they hiding, right?)

    2. I think they way Flippa represents bids to general public might be bugged/funky.

    I totally get why a bidder would bid against themselves in an auction with a reserve, but even no-reserve auctions can look odd.

    We had an auction where someone reached out thinking the bidding was fishy. (bidder bidding against themselves) In looking at the bids from my end (seller) everything looked fine, but a buyer was seeing Bidder X bidding against himself and thought it looked super shady.

    I might be lying here of course, but there really wasn't any shill bidding on our end and I'm not sure what was going on there.

    In any event, I think you're on the right path to getting Flippa to look into this. I'd work quickly - have you dug into the seller and his background at all? Real person with real identity? Do your DD on the site before bidding/purchase? Try to wrap up any other loose ends or concerns you have in the meantime.

  11. #9
    Moderator Kay is a Premium Member
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    I had a closer look at the seller out of interest. Apparently he has a book titled "Rebel Entrepreneur". Funnily enough, a Financial Times journalist also has a book with the same title.

    Here's your seller's one - it's by a self-proclaimed online porn guru. I was disgusted by the superfluous apostrophe in the book's description.

    http://marklyford.com/mark-lyford-la...Book.com/deals
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  12. #10
    Administrator Clinton is a Premium Member
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    Quote Originally Posted by rifs84 View Post
    You see the same bidder showing up there as well, this time listed by Flippa as 'Bidder 4' but you see the same amount of completed transaction $1.09k. Once again when you see the bidding trend, the bidder keeps trying to spike up the price by out bidding himself.
    You spotted that this bidder is bidding on mulitple listings by the same seller. Funny how Flippa's "sophisticated" systems failed to spot this and flag them as possibly connected

    BTW, I'm still waiting your reply to Kay's question about Bryan's part in all this. AFAIK, he's part of a third party company that provides so called due diligence services. They work closely with Flippa and both benefit financially from the arrangement (which is a conflict of interest anyway as Flippa makes more money if flaws in listings aren't spotted by the company doing "due diligence"). Are you saying Bryan's also the broker in this deal?
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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