If you’ve watched television lately, you may have seen commercials promoting online auctions that promise the chance at expensive merchandise for pennies on the dollar. Some of these companies even have former athletes and other celebrities as pitchmen; but are they legitimate? According to Sarah McDaniels, an online technology expert who exposes scam websites aimed at profiting off consumer ignorance, many online auction sites are not reputable.
“I just wrote a story about a publicly-traded auction site called Bidz,” she said. “This is a company that has connections to some shady people, and there are numerous complaints accusing it of using bait-and-switch tactics on its members.”
McDaniels says multiple complaints have led the Better Business Bureau to give Bidz.com an “F” rating; however, she says the rip-offs don’t end with this one particular site.
“One of the biggest scams going right now is the penny auction industry,” she said. “Sites like SkoreIt and QuiBids are openly advertising on television. Unfortunately, this is leading consumers to believe these companies are reputable, when they are in fact quite deceptive.”
According to McDaniels, penny auction sites require members to buy bid packs using actual cash. When they bid on an item during an auction, the consumer loses his or her bid along with the money he or she used to acquire it. McDaniels says this allows the penny auctioneers to profit at the expense of their members, who typically lose their money without winning the auction.
Along with SkoreIt and QuiBidz, McDaniels includes Beezid and MadBid as penny auction sites consumers should avoid. That said, she says that, in some cases, these sites may offer a form of entertainment to people who enjoy high-risk, high reward games of chance.
“My biggest problem with these sites is the fact that they pass themselves off as auction sites, when they are really more like games you’d find in a Las Vegas casino,” she said. “That being said, obviously, some people like games of chance; so if you look at these sites as forms of entertainment, they may be worthwhile to certain types of people.”