Auction.com, which is owned in part by Google, is being sued for fraud, The New York Post has reported. Google invested $50 million in the website last March.
The case revolves around the accusation that Auction.com artificially drove up the price of one of the homes on its listings through the use of a “shill buyer, ” or a non-existent buyer who was invented to drive up the bidding.
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The lawsuit, which was filed in California, is expected to come to court next year.
Apparently Auction.com made bids anonymously on behalf of sellers in order to ensure that the sale price would be above the minimum set price. But it insists that this is not “Shill” bidding. The company’s General Counsel Lee Leslie told the Post, “Shill bidding is illegal. Auction.com has never used or allowed this practice.”
Realtors everywhere dislike Auction.com for obvious reasons. But while the ethics of Auction.com’s practices are debatable, the State of California has passed a new law which goes into effect on Jul 1, 2015, that will require auctioneers to reveal the identity of all bidders. This will, of course, moot the practice.
Founded in 2007, Auction.com calls itself the nation’s leading online real estate marketplace, having sold more than $26 billion in residential and commercial assets. With buyers from more than 100 countries worldwide, the company serves a wide variety of real estate customers – from major financial institutions and institutional investors to individual consumers and real estate professionals. Auction.com declares its mission is to provide the most trusted online real estate marketplace, making transactions easier and more transparent.
With over 900 employees, Auction.com is headquartered in Irvine and Silicon Valley, California, and has offices in Austin and Plano, Texas, Miami, New York, Atlanta and Denver.
