Fraud Warning Signs and How to File a Complaint With the FTC

The USPS just recently sent out a mailing to inform consumers about fraud and what to look out for. The publication entitled Do You Know the Warning Signs of Fraud? includes some very helpful tips. Their 8 fraud warning signs can also be applied to penny auctions.[pullquote]”If it doesn’t feel right, don’t do it. That is the lesson, and that lesson alone will save you a lot of grief. -Oprah.”

Fraud Warning Signs

  • Sounds too good to be true. That final end price of $123.99 for an iPad, well that means 12,399 bids were placed ($0.01 increments), the winner may have spent 5x retail just to win.
  • Pressures you to act “right away.” Is the site saying they’re only accepting new customers for the next few minutes?
  • Guarantees success. Are they guaranteeing you will win?
  • Promises unusually high returns. Once again, you cannot always win an item for less than retail, you won’t win an item for mere pennies in a penny auction.
  • Requires an upfront investment – even for a “free” prize. All penny auction sites, pretty much, require an upfront bid pack investment, some sites are legit – meaning users have won and received items, some are successful at bidding, too. Do your homework.
  • Buyers want to overpay you for an item and you have to send them the difference. Ok, now this hasn’t happened in penny auctions but this has happened on Craigslist, etc., so be careful!
  • Doesn’t have the look of a real business. Look over everything, do they have a legit business name, address? What are their privacy policies, terms & conditions? Research. Investigate, put their address in Google, map it out. Go to the Secretary of State’s office website in the state the site is said to be located in and look to see if they’re even a registered company. Check their Alexa ranking, if the number is high that means their traffic is pretty low and you see a lot of bidders and winners they may not be legit. Ask questions in our forum, that’s why it’s there for you!
  • Something just doesn’t feel right. “If it doesn’t feel right, don’t do it. That is the lesson, and that lesson alone will save you a lot of grief. -Oprah.”

How to File a Complaint With the FTC

If you believe that you’ve been a victim of fraud or just want to find out more about your consumer rights, visit or call the FTC’s (Federal Trade Commission – the nation’s consumer protection agency), toll-free number 1-800-FTC-HELP.

In case you would like to file a complaint but didn’t know how, take a look at the FTC‘s new video:

To file a complaint with the FTC all you have to do is go to and follow a few easy steps to provide the FTC with information that could not only help you, but save many others from being ripped off in the future.

Visit our forum to learn more about penny auctions – help us determine which sites are scams and which may be legit!

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6 comments… add one
  • stephen taylor November 10, 2010, 7:09 pm

    find page very use full thank you

  • Penny Auctions January 24, 2011, 10:55 pm

    Thanks, this info will come in very handy. I will post it to my facebook page. I’ve received many complaints about penny auction site. Apparently, was a huge scam and a lot of folks got scammed out of hundreds of dollars by (Willie Stanford). People paid for bid packs, bid on items on, won auctionss and paid for their shipping/handling…But NEVER shipped out any items to their winners. Everyone tried to contact them via phone, email, and facebook but didn’t get any response. owner Willie Stanford sent out 3-4 emails in the span of 3 months stating they were having shipping issues. In December 2010, VANISHED…with everyone’s money. Their site was Gone. No communications, No Site, No Refunds, No items were shipped to winners, and No more

  • Matt March 16, 2011, 3:42 pm

    Good to see someone spell it out. Maybe you could send some folks to… we have never had anything go close to the real price and have been taking a beating. It kills a small company like us to see some other sites stealing when we are running things with integrity.

  • Dave May 25, 2011, 2:27 pm

    A couple of those warning signs aren’t necessarily true. The first warning sign, regarding $123.99 for an iPad meaning that there were 12399 bids place and the winner spent 5x retail for the item. You’re assuming that the winner placed all of the bids when the winner could have placed just 5 bids and won the item. Also you state “you won’t win an item for mere pennies in a penny auction” which is kind of misleading. While it’s true that you won’t win an item for a few pennies because the bids may cost $.60 each and you’ll more than likely have to pay shipping, which you would if you bought the item with an online retailer anyways, you can win an item for a few bids and save an enormous amount of money. I personally won a high end digital camera for that retails for $1200 for a total investment, including shipping, of $45….but that’s not pennies.

    • AuctionWatcher May 27, 2011, 3:42 pm

      Not all bids but it is a possible scenario. Thanks


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