Online ads for penny auctions are cropping up on popular websites claiming that you can get great deals on iPads and other electronics.
With a penny auction, users must set up an account and purchase bids with a credit or debit card; each individual bid may cost less than a dollar and are often sold in bundles of 100 or more. Every item has a countdown clock and as people bid, the cost of the item goes up incrementally and more time is added to the clock. Even if you don’t win the item, you still have to pay for the bids you placed, which can add up over time.
Before making your first bid on a penny auction:
- Research the penny auction with the BBB first. Not all penny auctions are created equal and BBB ratings on various sites range from A- to F. Always research the penny auction site with your BBB at wynco.bbb.org/Find-Business-Reviews/ before signing up.
- Read the fine print carefully. Pay close attention to details on sign up including 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 the BBB about being unexpectedly charged more than $150 just for signing up. Some complainants 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 the BBB if you feel you’ve been ripped off. If you feel you’ve been misled by a penny auction site, file a complaint. The 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.
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About the BBB
The Better Business Bureau, founded in 1912, is a champion for ethics and trust in the marketplace. Only businesses that meet the high BBB standards are invited to become BBB Accredited Businesses. Today, 123 BBBs across the United States and Canada rate more than 4 million local and national businesses and charities with scores ranging from A+ to F. Only a BBB Accredited Business may elect to participate in BBBOnLine, one of the most trusted and recognized Internet seal programs in the world.
The BBB serving northern Colorado and Wyoming topped 1.1 million instances of service to consumers and businesses in the last 12 months. These services include reliability reports on local companies and charities, access to companies that can be trusted by industry, help with dispute resolution, and trustworthy information on consumer and business topics.
Luanne Kadlub, BBB media relations manager, 970-488-2044 lkadlub@wynco.bbb.org