ebaylogo.jpgA Manhattan company called EMH Group LLC that auctioned jewelry over eBay.com under the name Jewelry by Ezra agreed to a $400,000 settlelement of charges that it engaged in a practice known as shill bidding. That practice involves fakes bids being used to drive up the prices of auctioned items.

WNBC is reporting that the jeweler was instructing its employees to secretly bid on items their employer was selling, so that the end sale price was inflated. According to state officials, almost a quarter of a million fake bids were placed by company employees in a year's time. We're going to assume that this scam involved eBay's proxy bidding feature that automatically raises bids to a set price ceiling, because that large a number of shill bids comes out to about 900 fakes a workday.

eBay says this it takes such fraud seriously and the company's internal investigation unit personnel were the ones who brought the case to New York State official's attention. In addition to the fine, part of the settlement was a ban of EMH Group LLC from the online auction business for four years. This complaint on RipoffReport.com's site leads us to believe that even if one wasn't oversold on items by shill bidding by EMH, customers would have been well advised to steer clear of the company.