Hiding a reserve is not attempted fraud because they are not expecting a bid. If it is bid up to the reserve and sold the auctioneer / seller is not trying to make more money so no benefit and no intention to get benefit so no fraud or attempted fraud. If the bidder does not know what their limit is that is their probem.
I can't find anything to say that the presence of a reserve has to be declared. It is very clear however that the value of a reserve does not have to be revealed.
Another perspective:
An item that I want has a reserve (value not to be revealed to bidders, but lets say £50) I want the item at up to £100. Other bidders drop out at £30. Unless the auctioneer bids to the back wall I don't get to buy the item so I loose out. If he bids the wall until I hit reserve I win because I get the item and the reserve confidentiality is preserved. Yes it could be abused and tht would be fraud.
I guess we will have agree to disagree. I can't prove a negative and I'm not going looking for case law to prove your point
Red herring. Nobody has said that the existence of a reserve has to be declared, except obviously in the case where a lot doesn't make its reserve because you have to give a legitimate reason for a winning bid to become a 'no sale'. The only way reserves come into this at all is because you keep asserting that a shill bid that serves to push the bidding up to the reserve is lawful. A shill bid is a shill bid, reserve or not.
The criminality is in the auctioneer
manipulating the price by injecting
fictitious bids, no less, no more. Think beyond auctioneering to other people who have been jailed for price manipulation in what are supposed to be an open, fair markets. The LIBOR price fixing scandal has just come back into the news, there's an example, the charges were "conspiracy to defraud". Any dishonest action that serves to manipulate a price is fraud. The dishonesty in a shill bind is the pretence that the bid is made by a
bona fide bidder when it is not.
I can't conveniently quote statute on this that says in black and white that "
auctioneers making bids off the wall commit an offence", because the statute law (e.g. Fraud Act) is broad and not specific to auctions so you have dip your toe into jurisprudence to show how it meets the offence of fraud.
The CPS gives the following elements for the offence of "Fraud by false representation"
The defendant:
- made a false representation
- dishonestly
- knowing that the representation was or might be untrue or misleading
- with intent to make a gain for himself or another, to cause loss to another or to expose another to risk of loss.
The offence is entirely focused on the conduct of the defendant.
So if the auctioneer makes a bid
representing it to come from a bona fide bidder, not themselves(proves 1), they will automatically
know that the representation is not true(3), which is
ipso facto dishonest(2), and obviously makes for a
financial gain to the seller(4),
inflates their commission(4), and causes a
loss (higher price) to the buyer(4), or
exposes buyers in general to a risk of paying a higher price than in the abscence of the shill bid(4).
All points of the offence met.
Moreover, I'm not the only one who thinks that an auctioneer pretending to accept bids that have not been made is fraud, and the salient difference is that this writer has LLB after her name, which I do not.
Sometimes, the auctioneer and/or the auction house can be prosecuted for criminal activity around an auction, including fraud. Fraud may arise where an auctioneer pretends to accept bids which have not been made, and you could have a claim against him in relation to the deposit (and interest). The buyer can take legal action for fraud, and criminal prosecution for fraud can also follow.