This is a question we get on a somewhat regular basis … “How do we know online bidders are real?” What is my answer with little or no other information? “We don’t.” However, it’s good to look at the big picture here.
Such a bird’s-eye view of this issue would include questions such as, “How do we know that live bidder is real?” “How do we know that car salesman’s final price is his final price?” “Do we know that was really orange roughy?” “How do we know … anything for sure?”
My good friend Jason Smith wrote an excellent article about this topic. I encourage you to read it here: http://dreamdirt.com/blog/how-do-we-know-online-bidders-are-real/. Jason states that he — like many auctioneers — “verifies” his online bidders.
Verification is important — but also knowing that you can trust the auctioneer providing the online bidding is also important. Regrettably, any auctioneer could say he verifies bidders, but how do we know that?
We’ve been privy over the last several years to many phone calls and emails where a bidder/buyer is asking about unauthorized or fictitious online bidding. Too, as a contract auctioneer working across the United States, I’ve witnessed such activity …
However, I’m pleased to report that for the most part, auctioneers are honest and ethical and do not place unauthorized online bids, nor allow it to happen at their auction events. As a result, most bidders participating in an auction in the United States can trust all online bidders are real.
Lastly, what recourse does a bidder or buyer have if unauthorized bids have been placed? First, fictitious bids are prohibited in the United States. Then, if a without reserve auction, the seller nor an agent for the seller (for that specific purpose) can bid. In a with reserve auction — on the contrary — the seller can bid himself or through another and if disclosed, there is no bidder/buyer recourse.
A harmed auction customer can bring action against an auctioneer/seller in cases such as this, but it’s difficult business. Most online auction commerce is not licensed like the live auction business, and otherwise records and other history of bidders and bids may not be available; the burden of proof is clearly on the plaintiff and is demanding.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and Texas Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.