The question was in essence, “Do I have an obligation to disclose the identities of backup bidders to winning bidders?” In other words, the high bidder at $50,000 wants to know who was the backup bidder at $49,000.
Why would a high bidder at $50,000 want to know this? Clearly this high bidder thinks maybe there wasn’t a bidder at $49,000. Unfortunately, in some auctions there isn’t any backup bidder strictly speaking — and the high bidder was being run.
What do we mean by “run?” Here’s our one such article from 2010 regarding auctioneers taking bids which aren’t there (fraudulent bids) to induce you to bid more: https://mikebrandlyauctioneer.wordpress.com/2010/02/07/unethical-bid-calling-4-run-run-run/.
Are most auctioneers trustworthy? I think so. However, there is a disturbing level of distrust in the auction process — live, simulcast and/or online — where bidders think maybe that other bidder isn’t really genuine.
As an expert witness, we’ve been called into more than one case of material amounts (claims exceeding $10 Million dollars) where the central issue was the auctioneer taking fictitious bids.
Here’s one such prior article where we described one such significant circumstance: https://mikebrandlyauctioneer.wordpress.com/2018/06/18/how-the-auction-industry-lost-at-least-one-bidder/. We as an industry will continue to lose the public’s confidence if (as) this behavior continues.
Yet another article noting the legal issues with asking someone to bid more with false (fraudulent) information (inducement) can be read here: https://mikebrandlyauctioneer.wordpress.com/2018/06/21/that-other-bidder-and-fraudulent-inducement/.
Disgruntled consumers (the public) are generally dissatisfied when there is a lack of either disclosure and/or communication. Further, consumers don’t appreciate being lied to … if you say you have $49,000 then you should actually have a bidder at $49,000 — and not just pretending to have such a bid.
Lastly, is an auctioneer or seller required to disclose the identity of any backup bidder? Certainly not. However, when a high bidder asks for that information, you can likely conclude he doesn’t trust there was actually one.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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