2. FAKE AUCTION
• Definition
fake auction is unscrupulous buyers, with the help or
encouragement of buyer’s agents, are using dirty tricks to secure
properties at auction as a record number of homes are sold under the
hammer and prices hover near record levels.
The practice, known as “collusive bidding", involves two or more
bidders who represent the same buyer, but creating the impression that
there are multiple buyers bidding for the same property. One buyer’s
agent said the tactic worked “brilliantly" and recently saved their client
more than $300,000 at auction.
The vendor would be furious, of course. “It’s illegal, but very hard to
police," said Rich Harvey , chief executive of Sydney buyer’s agent,
propertybuyer.com.au, who slammed the ploy.
4. THE STEPS THE CRIME
• The increasing popularity of using online auctions has led to an
increase in fraudulent activity.
• This is usually performed on an auction website by creating a very
appetizing auction, such as a low starting amount.
• Once a buyer wins an auction and pays for it, the fraudulent seller
will either not pursue with the delivery, or send a less valuable
version of the purchased item (replicated, used, refurbished, etc.).
• Protection to prevent such acts has become readily available, most
notably PayPal's buyer protection policy. As PayPal handles the
transaction, they have the ability to hold funds until a conclusion is
drawn whereby the victim can be compensated.
