Online auction traders were warned about bidding on their own goods to hike prices after an eBay seller became the first in Britain to be prosecuted for online auction fixing.

Paul Barrett, 39, from Stanley, Co Durham, is facing a fine of up to £50,000 after bidding against himself on the online auction website.

Barrett, a minibus hire firm boss, pleaded guilty to 10 offences at Skipton Magistrates’ Court after using two separate eBay accounts to bid on and increase the prices of his own items.

The case was adjourned for sentencing at Bradford Crown Court on May 21.

“We certainly hope this case is a bit of a wake-up call to people who do trade on eBay, or other auction sites.”

Barrett was investigated by North Yorkshire Trading Standards after a complaint that he had advertised and sold a minibus on eBay with false low mileage.

Officers found he was selling goods on the auction website under the username “shanconpaul”, then bidding on them under the identity “paulthebusman” — a process known as shill bidding.

He told the court he did not realise that bidding on his own items — which included a pie and pasty warmer priced at £127 — was a criminal offence.

Barrett admitted 10 breaches of the Business Protection from Misleading Marketing Regulations 2008 and the Consumer Protection from Unfair Trading Regulations 2008. Each offence carries a maximum fine of £5,000.

The two new laws were brought into force two years ago to tackle growing internet fraud after an EU directive to bring consumer protection up to European standards.

Claire McKinley, trading standards officer, told the court: “Mr Barrett placed bids on items he himself owned to raise the price and left positive feedback on his own eBay site, leading buyers to believe his reputation was better than was the case.”

After the hearing, Vanessa Canzini, head of corporate communications for eBay in Europe, said: “We are extremely pleased to learn of the conviction of Paul Barrett.

“Shill bidding is illegal and it is important for people to understand that there is not, nor has there ever been, room for illegal activity on our site.

“We invest over £6 million each year in state-of-the-art technology to detect shill bidding and other illegal activities.

“This acts as a strong deterrent to the small minority who attempt to use our site inappropriately but, more than this, it helps us to work with law enforcement agencies to secure successful prosecutions if anyone decides to try their luck.”

From the Times Online