Accused of using shill billing to drive up prices in online auctions
PHOENIX — Attorney General Mark Brnovich announced his office filed a Consumer Fraud lawsuit alleging that Phoenix companies Auction Nation, LLC and Auction Yard, LLC, and their principals, deceived online bidders. The lawsuit alleges Auction Nation and Auction Yard, by unfairly and deceptively bidding in their own auctions, falsely drove up prices for items and, as a result, collected millions of dollars from legitimate auction participants who were unaware the “house” was manipulating the auction process.
“It’s time to bid farewell to disingenuous auctions that are deceiving Arizona consumers and send a message to the industry,” said Attorney General Mark Brnovich. “Auction rules must be clearly stated and strictly adhered to, so all bidders are legitimate and competing on an even playing field.”
Auction Nation and Auction Yard allegedly required would-be bidders to agree to their terms and conditions, which prohibited “shill” bidding and assured participants that Auction Nation was not involved in the transactions between buyers and sellers. Nevertheless, Auction Nation, Auction Yard, and some independent auction sellers placed bids under multiple bidder numbers so they could not be identified as shills. Auction Nation and Auction Yard also was able to view bidders’ “max bids” on their auction website, which could have facilitated their scheme to drive up prices. Items that “sold” to shill bidders were relisted in later auctions.
The complaint alleges that Auction Nation and Auction Yard continue to shill bid on their online auctions, despite knowledge of the Attorney General’s investigation and numerous consumer complaints.
Auction Nation and Auction Yard are Arizona limited liability companies, and their principals, Gabriel J. Prado, Brian Long, and William M. Russell, are Arizona residents. The State’s lawsuit seeks consumer restitution, up to $10,000 in civil penalties for each violation of the Arizona Consumer Fraud Act, injunctive relief, and attorney’s fees and costs.
Senior Litigation Counsel Rebecca Salisbury is handling this case.
If you believe you have been a victim of consumer fraud, please contact the Arizona Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the metro areas at 1(800) 352-8431. Bilingual consumer protection staff is available to assist. Consumers can also file complaints online.
Copy of the complaint.