The good old fashioned Auction House scam has a number of different variants, each of them with a varying level of offense to Blizzard and its customers. On a very basic level, the scam merely monopolizes and drives up prices in the Auction House. However, in more advanced modes, the scam can actually steal people's gold and leave them empty handed or with a stack of useless cloth.
The Basic Premise
The basic cheat that many people utilize is completely legitimate because it is within the scope of the game rules and really just involves manipulating the in-game economy a bit, something that is technically illegal in real life but completely doable nonetheless. However, it is something that you can easily watch out for by keeping careful track of prices and values in the Auction Houses of numerous servers.
The first step that these Auction House entrepreneurs take is to find an item on the Auction Block that few if anyone is selling. Let's say they've chosen Silk Cloth for example. They will then gather as much as 175 of this item. Now, to make sure they have full control of the market, they will buy off all the existing Silk Cloth on the market to ensure that only they have the ability to sell. Now, they can list their Silk Cloth for whatever price they want.
However, to keep up appearances, the price they list their cloth for will only be 25-40% above standard market price (this will add up quickly though). Now, with a full monopoly on the item, they must only watch for other people adding theirs and buy them as quickly as possible. It's a quick scam because they must ensure that they keep the market to themselves or they lose their money and their deposits.
The Scam Part
After monopolizing the market, there is a series of scams available to ensure that a scammer can get rid of their items quickly and for the price they've listed. To do so, they will then hotlink an item that they do not have, an epic blue weapon or the like. They will offer to trade the epic weapon for a fair number of silk cloth. Now, when everyone purchases the scammer's silk cloth from the Auction House and whispers to the scammer to trade, the scammer simply states that they already traded and ignores the rest of them.
By using this method, they can quickly and easily get rid of 200 or more silk cloths and get out of the Auction House with a 40% boost in sales by artificially inflating prices. This is hard to get in trouble for, so it is important as a buyer that if you see prices that look inflated, you check with other servers to ensure that it is fair and that you are not being scammed. Of course, with supply and demand, if you need the item, you might just have to pay the price for it.
