maybe i should edit the title of my post.
no one has really said it was fraud and nowhere did I say that bidder 2 would be paying either.
In a typical offline auction, you bid 2000 and I decide to outbid you to 2001 just because I knew you bid to 2000 and I decide not to pay, the second bidder is NOT responsible..... You are right. The auction house or auctioneer is screwed.
However, I dont think NW has really considered this and I'm not sure how they cover it in their terms. Either way SOMEONE will end up with some good names, I just hope they get what's coming to them and have to pay MORE than they are worth so they learn their lesson