Be Careful With New Penny Auction Sites
It is highly recommended to steer clear of new penny auction sites, since they have not built up a reputation and have a high risk of being scams. Since there is little information and ratings available to new penny auction sites, you would be taking a huge risk in registering and providing them with your credit card information without the research to back the safety of the site. However, if you choose to take on the risk and register, there are a few things you can do to keep yourself safe from scams and other possible risks.
The first thing you want to do is attempt to gather as much research as possible pertaining the new penny auction site. You will want to look for red flags such as bad reviews or BBB complains to ensure that nobody else has been taken advantage of in the short time that the site has been active.
If they provide a free trial as a hook, do your best to find as much information as possible before accepting the offer as they may request your credit card information.
Another safety tip to keep in mind when taking a risk with a new penny auction site is to never give out your credit card information. Yes, you can dispute the charges through your credit card company, although it is better to avoid the whole fiasco and not give them the information to begin with. If for some reason it is a scam, they may attempt to steal your credit and run up quite the large tab. This can take years to correct and could ruin your credit for up to 7 years unless you work endlessly to explain your situation to the credit bureau to have it removed from your credit history.
Check the legitimacy of the site before you start bidding. Can you find an address and phone number in case you run into problems? If not, don’t bid.
Also, run an Internet search of the company name along with the word “complaint” to see what others have said about the site; check out the site’s record at Penny Auction Watch (on its forum and directory) and at the Better Business Bureau (BBB) site.
Read the BBB’s site carefully, going beyond just the overall “grade.” QuiBids has an A rating, despite 1,108 complaints in the last three years.
Source – Forbes
The risks involved in participating in new penny auction sites are endless. Penny Auction Watch’s website lists many reasons to steer clear of these sites and why they can go south so quickly. The auctioneers for the new penny auction site promise they are legit, no bots or shills, and nothing hinky. However they get people excited and bidders start winning items, then as time passes and nobody receives their items that they paid for, that is when the excuses come rolling in. Kim Komando on USA today wrote -
“These sites can be slow to take off. Sites need a large number of bidders for auctions to pay off. Otherwise, they’re simply selling expensive items at a huge loss. Of course, it is difficult to get traffic to a new site. They may only be able to offer a few auctions a day when starting out.
Don’t feel sorry for owners of penny auction sites, though. They have strategies to overcome these obstacles. It looks like sites gang up to smear the reputations of other competitors. They start fake blogs touting the benefits of their own site. “
The numerous excuses that are provided are enough to drive you crazy.
There then comes the bots and fake bidders, although its very hard to prove that such practices go on, many new penny auction sites are believed to be guility of this according to tressler on aarp – “Some unscrupulous auction sites use computerized bid bots or human shills to automatically push up the bid prices. That keeps the clock ticking, and forces you into a bidding war to stay in first place … and paying more money in bid fees,” This is the risk involved in new penny auction sites.
How to Handle a Failed New Penny Auction Site
You do a have a few options to handle these failed penny auction sites. Reporting sites that make promises that they just can’t keep, especially when you have spent your hard earned money, is a responsibility that should be taken by all bidders on the site. The agencies that you will need to report these sites to are The FTC, The FBI’s IC3, your credit card company, PayPal or other payment processing company, Attorney General’s Office, Secretary of State, The BBB, Penny Auction Watch, Rip Off Report, and Complaints Board. Complaints and reports to these agencies will put the pressure on new penny auction sites that attempt to pull a fast one on you by not providing either full refunds or the items you have purchased.
You will also want to call the new penny auction sites customer service center and inform them that they need to either provide you with a refund or ship the items to you. This will put the pressure on them to fulfill their promises which they had left empty and broken. It is also important to tell them that you either will report them or have reported them for the indiscretion and that you have informed your credit card company of the infraction. Your credit card company may be able to reverse the charges as well ensuring that you receive your money back from the penny auction and they don’t get anything.
Recommendations and Suggestions
It is highly recommended that you watch penny auctions for a set period of time before participating. It is also suggested that you read the terms of service agreement and avoid sites that don’t allow you to read the agreement in its entirety.
Also ensuring that the site has the proper accreditations is a must to help protect yourself from the risks involved in participating in new penny auctions.
By one estimate, there are now about 100 penny auctions
operating online and some of them have gone out of their way
to distance themselves from the less reputable sites.
But it’s often difficult to know who’s legit and who isn’t.
So, first, know that the odds are against you winning and that
some people consider it a form of gambling.
In that case, you should only ever play with money you can
afford to lose.
And be aware of how much the site operator is making from bid
credits sold for each item.
Source – scambusters