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Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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Car company fined for ghost bidding on Trade Me


A Christchurch car company has pleaded guilty to 55 breaches of the Fair Trading Act with its Trade Me auctions. 

NBR staff
Tue, 09 Aug 2011

A Christchurch car company has pleaded guilty to 55 breaches of the Fair Trading Act with its Trade Me auctions.

Fines up to $46,000, including $1000 in court costs, have been handed out to Morrison Car Company by the Christchurch District Court for making conscious decisions to ‘shill bid’ (ghost bidding) on their own auctions along with failing to provide Consumer Information Notices with its motor vehicles.

Judge Jane Farish said the car company’s explanation for its conduct that it was bidding on behalf of customers, was “implausible in the extreme”.

Judge Farish also acknowledged the company’s actions cost Trade Me money through lost sales.

Stuart Wallace, Commerce Commission competition branch manager said: “Motor vehicle traders have legal obligations whether they are selling from a car lot or selling online via sites like Trade Me. Failure to comply can negatively affect consumers and also other businesses that are doing the right thing.”

Morrison Car Company listed vehicles on Trade Me through two accounts ‘m_c_c’ and ‘mcctrades’ between 2005 and 2009. Around 150 of the 200 vehicles, which were listed had a $1 reserve. The Commission’s investigation turned up that at least 39 of these vehicles had not been listed at a $1 reserve due to shill or ‘ghost’ bidding done by members of staff, in turn raising the auction prices.

“Shill or ghost bidding is one of the most immoral forms of behaviour in a marketplace. We’re delighted the Commerce Commission took such prompt action on this incident, and we’re equally pleased with Judge Farish’s sentencing which included $45,000 in fines. The Commission was able to make good use of our investigation materials to get a solid conviction, ” Trade Me’s Head of trust & safety Jon Duffy, said.
 

NBR staff
Tue, 09 Aug 2011
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Car company fined for ghost bidding on Trade Me
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