Bid shielding is the latest fraud on eBay. Don't mix it up with shill bidding. Unlike shill bidding, which is fraud perpetrated by dishonest sellers, bid shielding is fraud perpretrated by bad buyers. It hurts everyone - sellers, honest buyers, and eBay.
Here is an explanation of how this fraud works:
Legitimate Bidder L submits his max bid of 50, and let's say the current high bid ends up being 40. Let's assume the expected amount for which this item will be won is 80.
Fraudster submits, with account A, bid of 100. The current high bid jumps to 50+bid increment, let's say 51.
Fraudster submits, with account B, bid of 110. The current high bid jumps to 100+bid increment, let's say 101.
No one else is able to submit the bid until the end of the auction, because no one wants to bid above 80 or 85, as the item is not worth much more than that.
At the very end of the auction the fraudster retracts 110 bid submitted with his account B. The account A becomes the high bidder, and the current high bid drops back to 51, which becomes the winning price.
Yes, it can. Bids for all Gixen mirror subscribers are now submitted at the last second of the auction, in addition to the time (offset) user has chosen. In this way, Gixen squezees bids between the time when fraudset retracts a bid, and auction end time.
Here is an example of this (image 1). While in this case Gixen hasn't won this auction for the user (bid was too low), it managed to submit a bid after the fraudster's bid retraction. This certainly ruined a fraudster's day, as in this case he had to pay double of what he really intended to pay ($200 instead of $100, approximately).
If you take a careful look, it's obvious this was a fraud. The account used to shield the fraudster's bid has 0 feedback and 75% retraction bid rate (image 2).
Probably, this is possible because of the present bid retraction policy. You can see it here: https://www.ebay.com/help/buying/bidding/retracting-bid?id=4013
It's a difficult issue, however. Users do place bids in error, and it's useful for users to have a way to retract their bid. Bids can be retracted within an hour of being placed, but it would probably make sense to disallow bid retractions in the last 10 minutes of an auction.
Let us know your opinion, you can discuss this in the Gixen forum or on facebook.