Shills operate not only in in-person situations but also online.

Shills operate not only in in-person situations but also online.

A “shill” is a hired person (or organization) who publically assists in inciting enthusiasm for a company and/or their products in order to encourage the general public to join a MLM company as a consultant or to purchase products/services. “Shills” are typically very closely associated with the company who hires them to deliberately give spectators (for example in an audience scenario) the impression that they are a passionate consultant or customer, when in reality they are secretly working for the company they pretend to endorse.

The purpose of a “shill” is to encourage onlookers or audience members to purchase products or services. Wikipedia goes on to describe a “shill” as:

“Plant” and “stooge” [“shill”] more commonly refer to any person who is secretly in league with another person or organization while pretending to be neutral or actually a part of the organization he is planted in…

Shilling is illegal in many circumstances and in many jurisdictions[1] because of the potential for fraud and damage, however if a shill does not place uninformed parties at a risk of loss, but merely generates “buzz,” the shill’s actions may be legal. For example, a person planted in an audience to laugh and applaud when desired (see claque), or to participate in on-stage activities as a “random member of the audience,” is a type of legal shill.

In another MLMLegal.com blog post titled “The Federal Trade Commission Provides Consumer Information on Online Penny Auctions,” we offered an article written by the FTC that gave us the following information about electronic “shills:”

Bogus Bidders: Bots and Shills

Some dishonest auction sites use bid bots, which are computer programs that automatically bid on behalf of the website. And some fraudulent sites achieve the same effect using human shills. You may be seconds away from winning an auction when another user places a bid. That keeps the clock ticking, and forces you into a bidding war to stay in first place. Though the bidder appears to be another user, it may be a shill, or a bot programmed by the website to extend the auction and keep people bidding (and spending money) as they chase the “win.”

Shills, therefore, operate not only in in-person situations but also online.

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