It’s not every day that you get to bid on a hotel supply, but that’s what happened to one of the company’s founders this week.
After an auction of hotel supplies went viral last month, eBay acquired the business for $100 million, giving eBay the rights to sell them.
The company had a number of sellers in the $1,000-to-$1,500 range, and it offered them all the same deal: they could sell any hotel supplies they wanted for $1 per item, or they could get a flat fee of $50,000.
As it turns out, eBay was willing to pay the flat fee, and those who were willing to give up some of their money were in the clear.
It wasn’t until a few weeks later, however, that eBay discovered that the hotel supply sellers were actually bidding on the same items they were selling.
As Ars reported in a report last week, eBay discovered the scam after it discovered a new type of hotel supply bidding scam, one that took advantage of a loophole in the auction site’s system.
“This type of scam is one that eBay is aware of, and we are taking immediate action to fix the issue,” a spokesperson told Ars.
The problem started last month when eBay noticed that hotels and hostels had been using the same “Hotel Club Supply” auctions, but one that had been auctioned on the site in a different format, with no bidding rules.
The auctions were not eligible for any sort of “Buy Now” or “Buy Later” pricing, and the auction was also not allowed to be used to create new listings.
In fact, eBay said that the only way to buy a hotel hotel supply was to bid against another hotel supply seller, and eBay had no way of knowing that the two hotels had been involved in the same bidding scam.
“If eBay was able to detect the same hotel supply listing on multiple auctions in the past and have identified the same person or persons participating in the scam, it would be very difficult to track them down and block them from participating in future auctions,” a spokeswoman said in a statement.
In a statement, eBay acknowledged that the site was being targeted, and said that “a variety of issues” were causing this to happen.
“We’ve identified a problem in the way the auctioning system is configured that may cause some hotels to be using different formats of auction and are working to address the issue.
We’re taking immediate steps to fix it and will update this article with any further information,” the company said.
Hotel supply sites have a reputation for running elaborate and expensive auctions.
It’s no surprise, then, that they’ve attracted the attention of law enforcement agencies around the country.
Last year, a federal grand jury indicted three of the same companies on fraud and money laundering charges for the sale of thousands of rooms, which were later shown to be fraudulent.