American Memorabilia: Ethics

[sammy]

Noticed this on the AMI web site, and wondered if the recent FBI investigation of shill bidding at auction houses prompted the following disclosure of a practice AMI has always done?


The auction house reserves the right to place a bid on any lot on behalf of the seller. Auction house will not specifically identify bids placed on behalf of the seller.


The seller, and AMI can shill bid the price up and both make more money, while legitimate bidders get ripped off. This is morally, and ethically wrong.


This is also on top of the 20 percent fee to spend your money with them, if you choose.

[trsent]

Noticed this on the AMI web site, and wondered if the recent FBI investigation of shill bidding at auction houses prompted the following disclosure of a practice AMI has always done?


The auction house reserves the right to place a bid on any lot on behalf of the seller. Auction house will not specifically identify bids placed on behalf of the seller.


The seller, and AMI can shill bid the price up and both make more money, while legitimate bidders get ripped off. This is morally, and ethically wrong.



This is also on top of the 20 percent fee to spend your money with them, if you choose.


A few observations.

First, is this new or has this always been there and we have never seen it?

I assume this policy is for hidden reserves on items, so say they take a consignment that the seller will not sell for less than $20,000 - They start the bidding at $10,000 and the consignor automatically bids it up until the $20,000 bid is met. I assume many other auction houses have the same policies and hidden reserves.

If this is the reason they offer such terms, it would be nice if items with hidden reserves were disclosed. It would make sense. I doubt AMI would ever agree to such terms, but it would make for a more honest environment where people would not accuse them of not being ethical.

[sammy]

Joel,

The disclaimer itself is new, as it is on every category page and it would have been noticed and questioned long ago.

The practice itself is not new, and I don't believe it has anything to do with hitting a reserve.

Per your scenario, if the consignor bids it up to the reserve, then they are on the hook for the 20 percent buyer's fee unless someone else bids, as well as the consignment fee.

It is just flat out, dishonest shill bidding, and I would concur that many other auction houses have, or had the same policy.

[buc]

Actually, ethical auction houses place reserves on items, just like reserves you see on ebay. This is a common practice for auction house like Huggins and Scott, Heritage, and a few others. I'll give you a nice little story about a not so ethical auction house that may or may not be the one listed in the title here. A few years ago, a Babe Ruth single signed ball that was of mediocre grade was placed on auction with this auction house. The ball is/was about a $10,000 ball. The consignor called the auction house with about a week left to go in the auction and the ball was bid up to around $4,000. The consignor spoke with the OWNER of this auction house and complained, saying he could have sold the ball for, and I quote, $14,000 on ebay. The owner said not to worry, it will get that high. The morning the auction was to end, the price was still in the $4,000 range with 3 bidders. The ball sold that night for $14,000 with 4 bidders.

[skipcarayislegend]

The consignor spoke with the OWNER of this auction house and complained, saying he could have sold the ball for, and I quote, $14,000 on ebay. The owner said not to worry, it will get that high. The morning the auction was to end, the price was still in the $4,000 range with 3 bidders. The ball sold that night for $14,000 with 4 bidders.

AM's Luckman jersey ends tonight. As of 12:30 pm EST today, it's at $31,386 with 13 bids. Long way to go before it hits $100,000 (and then some, according to Moreno). But something tells me we'll see a final number close to Victor's prediction. Good luck, bidders!

http://www.americanmemorabilia.com/Auction_Item.asp?Auction_ID=45086

[both-teams-played-hard]

But something tells me we'll see a final number close to Victor's prediction. Good luck, bidders!

I am in my computer office right now. I can see my current AMI catalog on the coffee table in the living room. This makes me an expert on sports memorabilia auction houses. This also gives me expert knowledge on vintage Bears jerseys. Since, I am an expert, I will have to agree with Skip that the final bid price will be determined by whoever is allowed to place the high bid.

[skipcarayislegend]

I am in my computer office right now. I can see my current AMI catalog on the coffee table in the living room. This makes me an expert on sports memorabilia auction houses. This also gives me expert knowledge on vintage Bears jerseys. Since, I am an expert, I will have to agree with Skip that the final bid price will be determined by whoever is allowed to place the high bid.

Excellent, but how big is your auction house catalog archive? I have 8,000+ in mine, which makes me a more expert expert. :)

[lund6771]

Joel,

The disclaimer itself is new, as it is on every category page and it would have been noticed and questioned long ago.

The practice itself is not new, and I don't believe it has anything to do with hitting a reserve.

Per your scenario, if the consignor bids it up to the reserve, then they are on the hook for the 20 percent buyer's fee unless someone else bids, as well as the consignment fee.

It is just flat out, dishonest shill bidding, and I would concur that many other auction houses have, or had the same policy.



I have never seen a bigger pile of shit than this so called "disclaimer"

So collectors are suppossed to trust these same guys who tell you that you will be paid in a month?....and you're lucky to see your money in 6?

At least publish the fucking reserve!!!!...

I can see it later tonight...Victor's consignor buddies (both of them) will call in and decide where to sell their piece at...."let's see if we can get this guy to go up another bid Victor"...."No problem, if they don't bid it again we'll get them on the max bid or call them in a few days and tell them that the high bidder backed out if you want"

I hope the FBI is reading all this!!!!!!!!

[trsent]

That Michael O'Keeffe article is funny because a "collectibles dealer who works closely with American Memorabilia" was all over my case via private emails when I posted that the jersey has a number change which was never disclosed until I posted in on Game Used Universe's forum.

Since then, the jersey is properly advertised with the number change, but this dealer who "works closely with American Memorabilia" told me he didn't own the jersey but was very concerned that I was trying to sabotage the item, which I never was. He told me he had offered the seller $40,000 for the jersey but it got consigned to AMI.

I was just stating a fact but he took it the wrong way. I guess since he said he had no interest in the jersey it shouldn't have mattered, right?

[trsent]

Actually, ethical auction houses place reserves on items, just like reserves you see on ebay. This is a common practice for auction house like Huggins and Scott, Heritage, and a few others. I'll give you a nice little story about a not so ethical auction house that may or may not be the one listed in the title here. A few years ago, a Babe Ruth single signed ball that was of mediocre grade was placed on auction with this auction house. The ball is/was about a $10,000 ball. The consignor called the auction house with about a week left to go in the auction and the ball was bid up to around $4,000. The consignor spoke with the OWNER of this auction house and complained, saying he could have sold the ball for, and I quote, $14,000 on ebay. The owner said not to worry, it will get that high. The morning the auction was to end, the price was still in the $4,000 range with 3 bidders. The ball sold that night for $14,000 with 4 bidders.

I think the concern here is shouldn't the auction houses be forced to publish "Reserve Not Met" such as eBay does so all can see it? I believe the issues here are that bidders are bidding against a blind, hidden reserve so they think they are bidding against another high bid and do not realize it may be a reserve.

People assume this new clause means there will be shill bidding. I have no clue about that, I just assumed it meant there were hidden reserves.

Someone should call AMI today to find out for sure and publish their findings here. I am going to bed, so I am not calling them again today!

[mvandor]

I have never seen a bigger pile of shit than this so called "disclaimer"
Umm, I wouldn't have put it quite that way, but that was generally my reaction. Obviously such an action should simply be ILLEGAL, disclaimer be damned. That's why the entire reserve concept came into being, or just start the bidding at a base minimum as has been done since auctions were run by fast talkin' hillbillies.

[buc]

I understand the concern. The ethical ones do have Reserve Not Met published on the individual item pages, or allow bidding up until there is one week left. If the reserve is not met by that time, all bids are deleted and a new minimum bid required (say bidding was up to $1400, but the reserve is $2000, they erase all bids and the new minimum bid is $2000.)

[otismalibu]

People assume this new clause means there will be shill bidding. I have no clue about that, I just assumed it meant there were hidden reserves.

I recently talked to a guy that had an item listed with a major auction house and he said he'd be buying the piece back if it didn't get the price he wanted. That sounds more like he'd be bidding on his own item, rather than having a hidden reserve, IMO.

[trsent]

I recently talked to a guy that had an item listed with a major auction house and he said he'd be buying the piece back if it didn't get the price he wanted. That sounds more like he'd be bidding on his own item, rather than having a hidden reserve, IMO.

I have been told in some states that a consignor has the right to bid on their own items. I have never looked up the laws myself, but I believe in California and New York State a consignor has the right to bid on their own items if the auction house permits it.

I understand why an auction house would have no problem with a consignor bidding as long as they paid all fees both ways. I know some people will find this wrong, but as an auction house you get your money either way so why would you care as long as no state or federal laws were being broken?

Then again, breaking laws in a whole other story.

[lund6771]

I have been told in some states that a consignor has the right to bid on their own items. I have never looked up the laws myself, but I believe in California and New York State a consignor has the right to bid on their own items if the auction house permits it.

I understand why an auction house would have no problem with a consignor bidding as long as they paid all fees both ways. I know some people will find this wrong, but as an auction house you get your money either way so why would you care as long as no state or federal laws were being broken?

Then again, breaking laws in a whole other story.

I personally feel that there is nothing wrong with this as long as everything is on the up and up...if I consigned my collection to an auction, and everything was going pretty low, I'd feel that I should have the right to buy back my own stuff as long as I paid the fees both ways...if we, auction house and I, conspired to drive up prices and then sell to the second bidder, that's a whoel different story

[mvandor]

I personally feel that there is nothing wrong with this as long as everything is on the up and up...if I consigned my collection to an auction, and everything was going pretty low, I'd feel that I should have the right to buy back my own stuff as long as I paid the fees both ways...if we, auction house and I, conspired to drive up prices and then sell to the second bidder, that's a whoel different story
But if you set a minimum starting bid or set a reserve, such shenanigans wouldn't be necessary would they? It's not like auctions are a new concept.

[lund6771]

But if you set a minimum starting bid or set a reserve, such shenanigans wouldn't be necessary would they? It's not like auctions are a new concept.

I agree 100%...

[otismalibu]

But if you set a minimum starting bid or set a reserve, such shenanigans wouldn't be necessary would they? It's not like auctions are a new concept.

Agreed. But I've heard many an eBayer state that high opening bids and reserve auctions turn off bidders. That's why Fraudway Rick had his own special reserve system.

I think bidders will be more aggressive thinking they're battling a fellow collector than they would if they were simply bidding against a reserve or worse yet, the owner of the item.

[Eric]

Noticed this on the AMI web site, and wondered if the recent FBI investigation of shill bidding at auction houses prompted the following disclosure of a practice AMI has always done?


The auction house reserves the right to place a bid on any lot on behalf of the seller. Auction house will not specifically identify bids placed on behalf of the seller.


The seller, and AMI can shill bid the price up and both make more money, while legitimate bidders get ripped off. This is morally, and ethically wrong.


This is also on top of the 20 percent fee to spend your money with them, if you choose.

Where is this on the ami website?

[sammy]

Click on any category, and you will see it.

[helmets]

I can see it later tonight...Victor's consignor buddies (both of them) will call in and decide where to sell their piece at...."let's see if we can get this guy to go up another bid Victor"...."No problem, if they don't bid it again we'll get them on the max bid or call them in a few days and tell them that the high bidder backed out if you want"


That is exactly what happened to me. I bid $800 something on a helmet. It immediately stated that I was outbid. I bid 1200 something...outbid...1500 something...outbid...1800 something...outbid, finally I tried 22 or 2300 something, and was outbid again. I went to bed, and as I lay there, I felt pretty good that I did not win the helmet, as I got tied up in the moment and should have quit at about the 1200 or the 1500. However, I was outbid on some others that I had bid on, and I was bound and determined to win one. I slept great that night, knowing that I did not overpay for something that I was not 100% sure was the "Real Stuff" anyways. The next morning I woke up, checked email, and I get a congrats email that I was the winner of the helmet at the 2200 or $2300. I look at my inbox, and there about 5 emails up is the "outbid" notice that I received 6 hours earlier. I forwarded both of the emails to the auction house along with a note telling them that I was outbid and I did not want the item. I then called them later that day and was told...you guessed it...the high bidder was not "verified" and should not have bid on the helmet. That in turn made me the high bidder and I was obligated to buy the helmet. "Ahh, I don't think so..." was my reply. I went on to ask how I was to know that the high "unverified" bidder was not the same one that outbid me at my 800 bid? She said to hang on a minute and she would check. She came back on the line and said - nope, they are not the same bidder, so the helmet was mine. I did not buy the helmet from them, and have not bought since. I now question every time that I was outbid in the past and ended up winning an item from them.

[MGHProductions]

My story with AMI is just like Helmets. I was bidding on a bat that had two bids and was up to 605. I took the next bid and was outibid, bid again, outbid and so on. I went up to 1400 or so and was outbid. I check the lot at 3 am and the price had not gone up and I was still outibid. I check my email in the morning and there is a congrats you're the high bidder (winner) at 1400 (whatever my last bid was). I emailed them a few times and did not get a response to what happened, so I finally called them. I told the person the situation, they showed I was outbid in their system and said I did not have to pay, then put me on hold, came back and asked me how much I wanted to pay for the item. I offered to split the difference, from my first bid to my last bid... she said she would get back to me and never did.

[trsent]

My story with AMI is just like Helmets. I was bidding on a bat that had two bids and was up to 605. I took the next bid and was outibid, bid again, outbid and so on. I went up to 1400 or so and was outbid. I check the lot at 3 am and the price had not gone up and I was still outibid. I check my email in the morning and there is a congrats you're the high bidder (winner) at 1400 (whatever my last bid was). I emailed them a few times and did not get a response to what happened, so I finally called them. I told the person the situation, they showed I was outbid in their system and said I did not have to pay, then put me on hold, came back and asked me how much I wanted to pay for the item. I offered to split the difference, from my first bid to my last bid... she said she would get back to me and never did.


That is exactly what happened to me. I bid $800 something on a helmet. It immediately stated that I was outbid. I bid 1200 something...outbid...1500 something...outbid...1800 something...outbid, finally I tried 22 or 2300 something, and was outbid again. I went to bed, and as I lay there, I felt pretty good that I did not win the helmet, as I got tied up in the moment and should have quit at about the 1200 or the 1500. However, I was outbid on some others that I had bid on, and I was bound and determined to win one. I slept great that night, knowing that I did not overpay for something that I was not 100% sure was the "Real Stuff" anyways. The next morning I woke up, checked email, and I get a congrats email that I was the winner of the helmet at the 2200 or $2300. I look at my inbox, and there about 5 emails up is the "outbid" notice that I received 6 hours earlier. I forwarded both of the emails to the auction house along with a note telling them that I was outbid and I did not want the item. I then called them later that day and was told...you guessed it...the high bidder was not "verified" and should not have bid on the helmet. That in turn made me the high bidder and I was obligated to buy the helmet. "Ahh, I don't think so..." was my reply. I went on to ask how I was to know that the high "unverified" bidder was not the same one that outbid me at my 800 bid? She said to hang on a minute and she would check. She came back on the line and said - nope, they are not the same bidder, so the helmet was mine. I did not buy the helmet from them, and have not bought since. I now question every time that I was outbid in the past and ended up winning an item from them.

These stories are both along the same lines, and I had similar happen on a bat years ago with them. I understand not all high bidders are going to pay, but time and time again, the very next morning?

The problem is we all know the auction houses all own many of the items in the auction, not everything is consignment so they may put in hidden reserves then decide to sell before going to bed for the night to the last high bidder who went to sleep thinking they were outbid.

The more I think about this new clause it makes me think that auction houses should disclose which items they own and which are consignments so there is no confusion with what is being bid up by a consignor or the auction house itself.

[Danny899]

These stories are both along the same lines, and I had similar happen on a bat years ago with them. I understand not all high bidders are going to pay, but time and time again, the very next morning?

The problem is we all know the auction houses all own many of the items in the auction, not everything is consignment so they may put in hidden reserves then decide to sell before going to bed for the night to the last high bidder who went to sleep thinking they were outbid.

The more I think about this new clause it makes me think that auction houses should disclose which items they own and which are consignments so there is no confusion with what is being bid up by a consignor or the auction house itself.

Joel,
I'm still trying to digest this policy as it is new to me as well. If this isn't illegal, certainly it is morally wrong, wouldn't you say? I always thought I was bidding against other bidders, not the house itself! What gives them the right to decide that the price isn't high enough that they just go in and pump it up? Do they actually plan on winning it for themselves by outbidding you? And if you don't go back in and top THEIR bid, they contact you in the morning and say you're the high bidder because of an "unverified" bidder and are expected to purchase it? I don't get involved with the auction houses much anymore because of the 20% fee, shipping overcharges and mostly poor communication and unfriendly customer service. But this "self bidding right" and their attempt to justify it sickens me and I will cease to engage in any future auctions. I enjoy your open minded and objective posts, so please tell me if I'm reading this or interpereting it incorrectly. Thanks, Dan

[David]

Some people may phone in bids, in part as they want to discuss an issue or the lot with a company rep, and the auction house would then enter in their bid. This would be an instance where the auction house typing in someone else's bid would be reasonable and okayed.

[trsent]

Joel,
I'm still trying to digest this policy as it is new to me as well. If this isn't illegal, certainly it is morally wrong, wouldn't you say? I always thought I was bidding against other bidders, not the house itself! What gives them the right to decide that the price isn't high enough that they just go in and pump it up? Do they actually plan on winning it for themselves by outbidding you? And if you don't go back in and top THEIR bid, they contact you in the morning and say you're the high bidder because of an "unverified" bidder and are expected to purchase it? I don't get involved with the auction houses much anymore because of the 20% fee, shipping overcharges and mostly poor communication and unfriendly customer service. But this "self bidding right" and their attempt to justify it sickens me and I will cease to engage in any future auctions. I enjoy your open minded and objective posts, so please tell me if I'm reading this or interpereting it incorrectly. Thanks, Dan

Dan, there are so many different ways that this could happen.

I agree with you - 15-20% buyers premiums and a "no return" policy? Many auction houses treat customers like the customers owe the auction houses for letting them bid in their auctions, etc. etc.

I believe we are over evaluating this new AMI posted policy. I do not think they are bidding on their own items, but this policy means they could. Since they know what a high bid is, they can bid up any items so why would anyone place a high bid other than the next bid on an item knowing the auction house has the right to bid on it themselves?

The eBay system works great, but items such as the Sid Luckman jersey do not get a chance to sell on eBay. I am sure the owner of the jersey would be pleased with his $35,000ish from the auction, but at the end of the day, they may have got more on eBay with all the excitement the jersey brought.

Finally - I am going to assume (bad word, but it fits) this policy is for when an item is consigned with a reserve, but they start the bidding below this reserve. This would make sense, but it shouldn't be necessary. Just like eBay - Post "Reserve Not Met" and there are no concerns, right?

This posted policy is troublesome to many, and it may scare away bids.

[Danny899]

This posted policy is troublesome to many, and it may scare away bids.

Joel,
It certainly scares me away from bidding. I would never enter a ceiling bid again, knowing it will be pushed up to just that. I'm sure you wouldn't get a friendly explanation if you called them either. Either put a reserve like Ebay or start the bidding near what you want to get for it. Unless I see something that I "just have to get" I'll stay away from the large auction houses for the reasons I documented in the earlier post. Ebay still is a valued source for collecting. Also, I purchased a jersey from you a while back and I didn't need to add 20%, overpay for shipping and wait a month to get it!! That's the way to do it. Thanks again, Dan

[cohibasmoker]

The way I have always looked at auctions is, I have a price in mind and I bid accordingly. If my bid is exceeded, oh well there's always some other auction house having an auction, the internet or even eBay.

I remember back in the day going to card shows and seeing suspension helmets and Duke Thorp footballs and saying to myself - WOW. Now with eBay, the market has opened up and although the above items are still hard to get, in nice condition, they are much more accessible than they once were.

Jim

[jppopma]

These hidden reserves and cancelled bids are what scare me the most in these auctions. I do not have unlimited funds and have to pick and choose what items I want to bid on (I'm sure most are in the same boat).

If say I have $3,000 to blow on an auction, I would at least like to place that bid on something I have a chance with and not let it sit on an auciton with a hidden $4,000 reserve.

As with Helmets example..once I get outbid, I will move on to the next item that I am interested in. We have to pick and choose and I can't see how they can go back and pull up any past bid. I understand that a bid is a "contract", but once outbid that contract has in a sense been voided at that moment.

[Oil Can Dan]

I had an experience similar to the two mentioned above with a major auction house, and it left such a bad taste in my mouth that I haven't bought from any major auction house since. It's a shame, because I am fortunate enough to drop five figures on items I'm interested in but I will not until there's more transparency, because as it stands, the major auction houses smell very bad.

Looking forward to seeing the end result of this latest FBI investigation.

[sammy]

America Memorabilia has removed this notice from all their category pages.


The auction house reserves the right to place a bid on any lot on behalf of the seller. Auction house will not specifically identify bids placed on behalf of the seller.



It appears their first, and only shill bidding notice on all their category pages, where every bidder could see it, was not good for business in their last auction. The notice is now safely tucked away in their "Auction Rules" where few people look.



American Memorabilia reserves the right to bid on behalf of the seller as per Nevada Revised Statute.



Now if AMI sold on eBay, their account would be terminated for shill bidding.


If you leave a maximum bid with these people, well, live and learn.

[MichaelofSF]

I was bidding on an item in the American Memorabilia auction last night. I placed a few bids but kept getting auto outbid. I decided that the item probably had a "reserve bid" so I stopped bidding. This morning I checked and the lot disappeared from the auction results. This thread probably saved me some money by not bidding against myself/reserve. Thanks forum members

[lund6771]

Has anyone heard news about the FBI investigation into AMI lately?

[trsent]

Has anyone heard news about the FBI investigation into AMI lately?

Was there every any news about the FBI investigating AMI? I heard that members of Mastro were questioned. Was there any press into AMI being questioned?

[lund6771]

in the "subpeonas" thread in Game Used Discussion...(Did I spell that right?)....there was an article in some paper that someone qouted that AMI and Mastro were being investigated....now that I look back at the thread, I can't see ithe post with that article anymore...

anyone else remember that, or have any more info?

[trsent]

in the "subpoenas" thread in Game Used Discussion...(Did I spell that right?)....there was an article in some paper that someone quoted that AMI and Mastro were being investigated....now that I look back at the thread, I can't see the post with that article anymore...

anyone else remember that, or have any more info?

It may have been a Michael O'Keefe article from one of the New York newspapers. He generally writes more about the sports memorabilia industry than any other member of the press. I do not remember them being mentioned, but I would like to know if they were in fact involved.

I had my spell checker correct your spelling in the quoted post above for you! :)