Playing Penny Auctions may cost consumers’ their credit rating and their identity. With the thrill of the game, players speed through bidding wars, adrenaline pumping, in hopes of winning the top bid for costly electronics, expensive jewelry or gift cards. What consumers’ forget is that every deal comes at a cost. With bidding bots inflating bids, gift card fees eating winnings, sites sending consumers on phishing expeditions, bidding sites know “… there’s one born every minute,” sucker, that is.
Penny Auctions & The FTC
The Federal Trade Commission wants consumers to be aware of the rules and risks involved in speed bidding sites. What is a Penny Auction, exactly? As the holidays approach individuals in search of a quick deal look to the web. Auction sites bring consumer’s to bid on discounted gift cards, laptops, iphones, Xboxes and jewelry items, to name a few. With a penny bid to start, a clock counts down the minutes as individuals try to ‘outbid’ unknown other bidders. All players are trying to get that laptop or game console at a significantly reduced rate. The clock runs out. The shopper wins the bid. The game is over in seconds. Now, the winner waits. The clock runs out, and the bid is lost. Penny Auctions do not only charge the winner. The loser also loses their bid money. The site may appear to sell an item at a great discount, but they get their money back tenfold. An individual who plays the Penny Auction can lose hundreds of dollars in the end.
Pay to Play
The risks may not be clear, initially. Was there a contact number or directions regarding how to collect items, track progress, complain about lost bids and address unauthorized credit card charges or hidden fees? After the win, maybe a window disclaimer alerts consumers that the tax, shipping and play fee are added to the cost of the item. What is their recourse? Weeks pass and the consumer does not receive his gift card. Individuals who play with a debit card can lose chances for a refund. Unexplained fees for auction subscriptions, site play and the cost of mailing from outside the U.S. reduce any savings from the auction. What is the Cost to Consumer? The Penny Auction Consumer Report says plenty.
• Hidden fees
• Bogus bids
• Identity theft
• Lost game – lost bids
• Excessive wait time
• Damaged goods
Be Wary of “The Bid”
The Penny Auction may seem like a fun and exciting way to save money on gifts and goodies but be wary of the game. Research the site and read all the fine print before attempting to play. Know the risks before playing. Are there additional fees? Is there a site fee to play? Remember, the lost bid is a donation to the bidding site. There are no refunds for lost bids. Write down the contact number, name and web address. Before playing, check the site certification to ensure its legitimacy.
Contact The Federal Trade Commission
Read the Federal Trade Commission’s Penny Auction Consumer Report on how to Report Problems with Online Auctions. The agency helps consumers avoid the pitfalls of unscrupulous business practices. To contact the commission with a complaint go to, ftc.gov or call, 1-877-FTC-HELP, 1-877-382-4357. The FTC investigates fraud in Penny Auctions, while protecting the right to play fairly.