Oversight is Necessary

Over the course of the last 19 months we’ve found many penny auction sites that have done the following dishonest and/or fraudulent acts:

  1. Shill bid (bid against their paying bidders, either with software to do this, or manually).
  2. Failed to ship items out, some have even relished in this. A violation of the Consumer Protection Act.
  3. Denied refunds after stealing users’ money – PayPal doesn’t always protect us.
  4. Disappeared and didn’t respond to customers.
  5. Blackmail: Threatened their members, and even said the winners would not receive their items unless they posted a positive comment to our forum.
  6. Used marketing call-to-action language such as register within the next X minutes to reserve a spot.
  7. Charged membership & re-curring membership fees.
  8. Advertised deceptively by way of advertorials made to look like consumer news report sites.
  9. Set up shill penny auction “review” sites, i.e. Penny Auction Investigator among many others.
  10. Posted shill reviews (fake reviews made by the owner/staff or affiliates) to our forum and in blog comments as well as in other places.
  11. Sent me threats and defamed Penny Auction Watch℠ with libel all over the Internet in an attempt to discredit this site because their shady site(s) have been pointed out.

It’s one thing to go into bidding on a penny auction site and know that you may not win and that money spent could be lost, users go in knowing this, we have, these are on sites that are legit and don’t have bots, but is it easy to tell? We truly believe that “con artists” can set up penny auction sites to rob from consumers easier than if they wanted to go and rob a bank, why is this being allowed? It shouldn’t be and offenders should be prosecuted to the fullest extent of the law.

It should be legal to run a penny auction site, but they should be regulated and should have a way to prove that who we’re bidding against are real and what we’re bidding on is real and real products will be shipped out.

There are many larger sites who have put as much as millions of dollars and a lot of time into running a penny auction site, just this summer I met with BigDeal, Swoopo & Oohilove all sites that allow users to apply bids spent and all sites- users have received items from. BidCactus has even gone as far as to become audited by Ernest & Young, there are sites out there that people enjoy to bid on, but the problem is a lot of the scam sites are giving the whole penny auction industry a bad name. Something needs to be done to stop the sites that are not legally operating online businesses in the form of penny auctions.  Oversight is necessary.

The way you can help this is to do your research before purchasing bids, read the terms & conditions thoroughly, check out the about information, find out who is running the site. Sometime’s it’s hard to find out, some are even operating sites outside the US. They shouldn’t be allowed to hide behind private domain registry and offshore corporations.

Penny Auction Watch℠ has tried its best to gather information for you about penny auction sites so you can make an informed decision, but remember, anytime you bid on penny auction sites there’s risk and if you can’t afford to lose, don’t do it.

Discuss penny auctions in our forum!

Photo credits: Attribution Some rights reserved by ivanpw

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3 comments… add one
  • Bidbananas October 14, 2010, 8:09 pm

    Hello,

    I think this is a fair analysis on whether penny auctions are a scam. The blog owner also includes some legal views that penny auctions are not a Scam and absolutely not a Bargain.

    These Auctions make lots of money applying gambling psychology and marketing.

    Reply
  • aaron May 23, 2011, 5:58 pm

    Search “Quibids are Scammers” on facebook and like me please!

    Reply

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