So this is a bit of a gray area, but I imagine for some items or patterns this will be a great way to keep the competition down.
When you COD an item to somebody, you have to pay a small amount in advance, a COD tax of sorts. The way this scheme works is you sweet talk people into COD'ing that awesome item or pattern they have, locking it up into your mailbox untill the COD expires or you pay for it. First of all if it expires they will NOT get their deposit back, only their item. Second, you now have the market rid of one more competitor which can really be a boon when selling legendaries or rare motif's such as daedric and ancient.
I'm not saying that I approve of you all doing this, it's a dick move to be sure. But in the end these ARE game mechanics so at the very least use this guide as a scam/troll prevention from others if you are into the zone chat trading and all that good old school mmo stuff.