Some words about fraud

The past several weeks have been difficult ones for our hobby, for sure.  Information has come to light which has long been the subject of speculation, but which the Federal Court has crystallized quickly and definitively this week.  Without describing the sordid details, you can read a news story about the incident here.  Part of the considerable fallout from this has been an (understandable) desire on the part of the collecting community to hear from auction houses.  After some thought, we’ve decided that the appropriate place for us to sound off is here, on our own blog.

The short answer: We do not shill our auctions, nor have we ever.  

We also do not alter cards.  We do not perform undisclosed restoration on memorabilia.  We do our best to accurately describe everything in our auction with educational and interesting copy, and if we discover an issue that materially impacts the value of a piece after the auction goes live, we publish an addendum and give each bidder an opportunity to cancel their bids if they choose.

Additionally, we do not have hidden reserves.  Occasionally, we offer an item that does have a reserve, and we identify such items clearly, and we publish the amount of the reserve one week before the auction closes.

The longer answer:

We do our absolute best to ensure that our bidders participate in an honest, ethical auction in which real people can bid and win at real prices, and in which consignors can enjoy consigning to an auction in which its bidders trust the process.

We have several safeguards in place to help our bidders feel more comfortable.

  1. Our auction software is configured so that we cannot see what your max bids are when you place them.  This is a deliberate safeguard that prevents us from ever knowing how many – if any – bid increments exist between the current bid and a max.  As we say in our rules, we don’t have a fancy name for this; we just call it “integrity.”
  2. Our auction software is configured so that we cannot see the passwords of our bidders.  This prevents us from logging into their accounts and viewing your private information.  Because of this, if you lose your password and call us, we have no way of telling you what it is – the only remedy is to send a “password reset” email.
  3. Our auction software does not permit consignors to bid on their own material.  We explicitly prohibit this in our consignor agreement, and if we feel a bid is made by a consignor under a different account, or by a consignor’s proxy, we reserve the right to cancel the bid.  There is no circumstance under which we permit a consignor to win their own item and pay us the buyer’s premium.
  4. While we can never tell why a person might be bidding on an item, or who might be friends with whom, we do look for signs of shilling between consignors and a proxy bidder.  On one occasion, we banned a bidder – and a consignor – for bidding activity that we felt was illegitimate.
  5. We do not bid in the auction.  There is no “house account.”  We understand why some auction houses feel it’s okay to bid in their own auction, but we feel that when we can see who we’re bidding against, when we know who the consignor is, and when we have a 20% advantage because we do not pay the buyer’s premium, it’s unethical for us to bid in the auction.
  6. We do not withdraw items from the auction if they do not appear to be selling well.  If an item that does not have a reserve is in our auction, and has a bid, it will sell.

Collecting sports cards and memorabilia is a fantastic hobby.  It’s the greatest hobby.  It’s the best way to see how tightly sports is woven into the fabric of American history, and each artifact is special.  Each tells a story, and each collector that preserves an artifact in his collection is saving a piece of history, and passing along stories that otherwise would be long forgotten.

When we read or hear accounts of fraud in the hobby, it disgusts us as much as it does you.  Shill bidding – even if you still win the shilled item for less money than you’re prepared to pay – is robbery.  We’re serious about this.  It’s a big part of the reason why this company was founded.  The hobby will tell us whether or not it’s possible for an auction house like ours to survive in the long-term without engaging in unethical behavior.  Maybe it will, maybe it won’t.  Our survival will depend not only on the confidence of bidders, but on the consignors who are willing to contribute material to an auction where the house will not engage in unethical practices to help inflate prices.  But one thing we can unequivocally promise our customers, our consignors, our families and our friends: you will never, ever see us deliberately engage in fraudulent behavior.

Period.

 

3 thoughts on “Some words about fraud”

  1. Well stated Al! I’ll continue to consign and bid with LOTG Auctions and hope that many others will follow suit and bid only with those AH’s that are willing to be ethical and maintain their integrity!

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