Australia’s peak association for buyers’ agents has issued a stark warning to consumers to be aware of dummy bidding at auction.
Real Estate Buyers Agents Association of Australia (REBAA) President Melinda Jennison said consumers must understand that dummy bidding is illegal and attracts significant penalties.
“A dummy bid is a false bid by a non-genuine bidder in the crowd, usually to influence the sale price, at either an on-site or in-rooms auction,” Ms Jennison said.
“Sometimes these dummy bids are made by friends or family of the vendor or they may come from people associated with the sales agent.
“While there are laws to curb the practice, including strict bidder registration requirements and penalties for misconduct, the risk of manipulation still exists.”
Ms Jennison said the primary danger of dummy bidding is that it misleads genuine buyers, creating a false sense of competition and driving prices beyond fair market value.
“This can result in buyers overpaying for properties, leading to financial strain or even mortgage difficulties,” she said.
“Additionally, the practice erodes trust in the auction system, making buyers hesitant to participate in future auctions.”
Ms Jennison said the best defence for buyers is vigilance by understanding auction rules, researching market prices, and watching for suspicious bidding patterns.
“As authorities continue to crack down on fraudulent practices, awareness remains key to ensuring fair and transparent property transactions,” she said.
“Consumers must be aware that it is an offence for any person to arrange for another person to make a false bid at an auction.
“Not only that, genuine bidders at auctions should be aware of who else is bidding to ensure they are also above board.
If in doubt, bidders have the right to ask the auctioneer to indicate who else made a bid.” Ms Jennison said a blatant recent example took place at an in-room auction in Brisbane.
It was clear that there were dummy bids being submitted during the auction in an attempt to increase the final sales price,” she said.
Ms Jennison said consumers should notify the relevant statutory authority in their state or territory if they believe they have witnessed dummy bidding during an auction.
“Dummy bidding is illegal and those who perpetrate this insidious practice should be prosecuted,” she said.
ENDS
For more information or to organise interviews with Ms Jennison please contact:
Bricks & Mortar Media | media@bricksandmortarmedia.com.au
