When PWCC Marketplace was banned from eBay over accusations of shill bidding, company executives went through a wide range of emotions.
At first, they were angry at being targeted by a company they had done business with for years.
Then they were scared over what might happen to one of the hobby’s largest sellers of sports cards.
Then, when the smoke had cleared, they began to get excited about the possibility of reshaping their business and creating their own platforms and marketplace.
“Internally, when it all happened, we were angry because we didn’t understand it, and we still don’t,” said Jesse Craig, director of business development for PWCC. “Then you get a little scared. It’s like, holy crap, this is changing our entire business.
“The first day or two, it was anger and fear, and then it has just been, for us, really excitement since then and we are super excited about what we are building.”
eBay announced on Aug. 18 that PWCC had been restricted, and ultimately banned, from selling on its site, claiming that individuals associated with the company had “engaged in shill bidding.”
PWCC, which had more than $200 million in eBay sells last year, quickly released a statement saying it was shocked by the allegations and denied any knowledge of shill bidding, the practice of placing false bids to artificially inflate the price of cards being auctioned. PWCC threated legal action and criticized eBay for its “defamatory press release” and “bad-faith action.”
Two weeks after the controversy erupted, Craig said eBay had yet to provide PWCC with any information and evidence of shill bidding. PWCC’s own internal investigation also uncovered no evidence of inappropriate conduct, he said.
Craig said the company was shocked by the allegations because it had been working with eBay for more than 10 years to clean up its own auction process, including account verification, bid retractions and return policies. He declined to speculate on why PWCC was targeted but is not surprised, he said, that eBay has yet to respond to requests for evidence.
“The damage has been done. You don’t publicly come out and say something along the lines that they did unless you want to hurt a company,” he said. “There are so many ways to do that behind closed doors. Even if there was something going on, they said ‘associates.’ We don’t even know what that means, and they wouldn’t elaborate. We’re like, ‘Is that one of our employees? Is that a client? Who are you talking about? Give us the evidence, let us investigate it ourselves, because we don’t tolerate that.
“The whole thing was a mess and the only way that someone does what they did is to hurt someone’s reputation as a company. … Everybody knows what goes on on eBay as a whole, so for them to target us for it was pretty inappropriate, in our opinion.”
eBay has declined to comment on its decision to ban PWCC or provide further information about the allegations.
Craig said customer complaints and “backlash” from the accusations has been minimal, with less than 5 percent of its customers removing cards from its vault, despite rival companies opening their own vaults to attract new business.
“We have a very good user base and people who do business with us and know us, they know how we operate, they know we don’t tolerate those things,” he said. “Fraudulent bidding or shill bidding doesn’t do us any good. We sell so much stuff we don’t even have time to think about doing that. When items go unpaid it just makes us look bad, so the whole shill bidding [thing] doesn’t make any sense for us to do.”
PWCC, which has more than 130,000 registered users, recently launched a new monthly Premier Auction, selling $13 million in sports cards in August. With 11 web developers on staff and online infrastructure already in place, it was able to quickly move its business to its own website. On Sept. 1, it launched its new Fixed Price Marketplace, offering more than 50,000 cards worth more than $250 million.
In hindsight, the eBay ban may have been a blessing in disguise for the company, which has brokered the sale of multiple record-breaking cards this year.
“The shift, while scary at first, is really exciting because of the fact that we can control everything ourselves now and not have to worry about Big Brother, so to speak, and having to clear things through them or figure out ways to make things work,” Craig said. “It was so frustrating and so much we had to go through for years, we don’t know how else we would have gotten this Band-Aid ripped off other than what happened, so we are actually kind of fortunate that it did.”
Rumors have spread for years about shill bidding on eBay — allegations that have escalated during the current card boom. The problem is that false bidding is difficult to track and even harder to prove.
“There are situations that we cannot control,” Craig said. “If you have a card listed with us and you have a friend bid on it, there is no way to know anything fraudulent is going on. It is just impossible.”
He believes shill bidding is prevalent in the industry, however, especially on eBay.
“We know it is a problem on eBay because accounts aren’t verified and people can go all willy-nilly and they don’t do IP addresses or anything like that,” he said. “It’s pretty prevalent on eBay and that has always been a big complaint.”
Craig said PWCC sent numerous emails to eBay over the years urging them to clean up their procedures and implement tighter restrictions.
“When the market got really hot and competitive and competition is coming in, we had a lot of conversations with eBay about how they need to change to be better because they were our selling partner,” he said. “We have tried to give them our recommendations to clean up their own website and look where we are at now.”
Craig said PWCC has implemented numerous procedures on its own site to protect buyers and sellers and prevent shill bidding. The company has contracted with third-party companies to verify bidders and ensure that no one can see the high bids.
“We have the ability to control it all now,” he said. “We can track IP addresses, we have algorithms put in place to notify us of potential fraudulent bidding. There are a lot of things we can do — verified email accounts, bank accounts, credit card accounts — to make sure the people participating are legit and everybody knows we are doing everything above board.”
Craig believes PWCC will quickly regain the trust and confidence of customers and collectors who may be concerned about the shill bidding allegations.
“I think the good news is, the people who have done business with us, they speak very highly of us and they are excited about what we are going to build,” he said. “It is a small community in trading cards, so word gets around.
“There are going to be the naysayers who don’t really do business with us, but the people who have can instill that confidence for everybody else.”