Online ads for online penny auctions are popping up everywhere, but your BBB warns consumers that they should do their research before making any bids.
With penny auctions, typically users set up an account and purchase bids with a debit or credit card. Each bid may cost less than a dollar and are often sold in bundles of 100 or more. Every item in the auction has a countdown clock and as people place bids, the cost of the item goes up and more time is added to the clock. Each bid costs money, and even if you don’t win the product, you still have to pay for those bids placed.
The BBB has received many complaints against penny auctions, with consumers stating they have been automatically charged for what was supposed to be a free trial offer. Other complaints allege that some sites use fake bidders to drive up the prices on items. Consumers also indicated they had a very hard time receiving refunds or resolving other issues with the company.
Before making your first bid on a penny auction, your BBB offers the following advice:
* Research the penny auction with BBB first. Not all penny auctions are created equal. Always research the penny auction site with your BBB at www.bbb.org before signing up.
* Read the fine print carefully. Before providing any personal information or signing up for any “free” trial with a penny auction, read all of the fine print carefully on the website. Be sure to pay close attention to details on signup and annual fees, minimum bidding requirements, maximum prize amounts and how to get a refund.
* Know what you’re buying. Before bidding on an item, research how much it costs elsewhere and keep track of how much you’re spending on bids overall to see if you really are getting a good deal.
* Keep a close eye on your credit card statement. Many have complained to BBB about being unexpectedly charged more than $150 just for signing up. Some complaints were also automatically charged for more bids when they ran out or for a yearly registration fee, not realizing this would be the case.
* Complain to BBB if you feel you’ve been ripped off. If you feel you’ve been misled by a penny auction site, file a complaint with your BBB. BBB has assisted customers in resolving their issues, including getting refunds. If the business does not cooperate, your complaint will still go down on the company’s BBB Reliability Report and serve as a warning to others.