Auction "Ringing"

A small group of bidders, who ordinarily might be expected to bid against each other, decide in advance that only one of them will bid on a particular item. It might therefore sell for less than it would otherwise have done. The group then have a second auction among themselves, usually in the car park. The winner pays up whatever he bid in the second auction, but the difference between (proper auction bid price plus commission) and this private bid price is then divvied up between the members of the "ring".

The seller loses out because the item sells for less than it's worth, and the auctioneer loses out on seller's and buyer's commission. Admission to these rings is very much by invitation, and you don't make yourself at all popular if you're invited to join in, but decline. If they then spot that you're bidding against the ring, they may even try to run you up to a daft price, accepting the risk that they'll get the item and make a loss in the second, private, auction, just to rub your nose in it.

They're common in antique auctions.

Many thanks I get it now Bob

Used to be common at machinery auctions too.Bit unusual nowadays as the old team have all gone or are at least my age.It`s illegal too,but very hard to prove.Last ones I can remember was when the coal board workshops and pithead machinery auctions were on in the eighties.After the auctioneers had went home there was another auction in the yard where all the stuff the ring had won was re-auctioned.

But presumably there would be nothing wrong with the "ring" nominating one of their number to show up at the auction, do all of the bidding for the stuff they have an interest in, transfer all the purchases to some other venue, and then conduct a 2nd auction there? After all, that is not a lot different from what dealers working on their own do

- buy stuff at an auction & then sell it on to other people in the trade. So it isn't quite clear to me what the problem is here.

Regards, Tony

Collusion between a private group of bidders to reduce or inflate the price of an item being bid on is banned, or an offence or both. If only one of the group is bidding, then there is no ringing involved. You have to have the group working together to constitute ringing.

Peter

-- Peter & Rita Forbes Email: snipped-for-privacy@easynet.co.uk

I can see exactly why it is difficult to prosecute.

Regards, Tony

OK... scenario (a).

Fred finds out about an auction; he tells five of his mates about it and they can't go that day, but they tell him there are several items that they are interested in. He decides to buy said items knowing he can sell them on, and takes it all home. He then invites said mates around the next day, and sells the items to whoever offers him the most. As he has made a tidy profit on his sales, he decides to give his mates back 1/6th of the profit each as a discount.

Scenario (b).

Fred finds out about an auction; he tells five of his mates about it and they can't go that day, but they tell him there are several items that they are interested in, and tells him to to buy said items so that they can have an auction the next day. Fred buys the items, and takes it all home. He then invites said mates around the next day, and they auction off the goods amongst them, and split the profit between them.

Are Fred and his mates operating as a ring? Or is Fred operating as a legitimate trader, buying stuff and selling it on?

Without knowing what conversation took place before the auction, how do you tell the difference? (the external appearance is identical in both cases).

Regards, Tony

No, they are not operating as a ring if they are not physically at the auction.

Peter

-- Peter & Rita Forbes Email: snipped-for-privacy@easynet.co.uk

...but the point is that the end result is identical. So why is one considered illegal and the other not?

Regards, Tony

Because at the auction they are free agents to bid or not as the case may be, and can make/change arrangements on the fly according to what is happening there and then, while pre-arranged bidding is considered differently as they have no influence on the actual bidding in real time.

If they were present by phone, for example, that would fall foul of the regulations.

Peter

-- Peter A Forbes Prepair Ltd, Rushden, UK snipped-for-privacy@prepair.co.uk

(snip)

I'm intrigued. What regulations/laws are the ringers breaking? Actual laws of the land, local by-laws etc. or a set of rules decided by the auction house (and therefore tacitly agreed by the buyers) under which that auction operates?

John

Auctions work exactly the same as casinos and pubs. They are private property and have the right to ask anyone to leave whether they are breaking the law or not. The only exception is if by doing so they are themselves breaking and of the discrimination laws. If you want to take part ringing yourself make sure all your colleagues are middle eastern, female, old, single parents and see if anyone has the guts to ask them to leave :)

If they were on the phone, they would definitely be ringing

Regards, Tony