Penny auctions, which promise winners fantastic products at knockdown prices, are not always what they seem. As always, we also recommend you check out the most popular articles from our other sites during the past week:.
game theory - How do penny auctions make money? - Economics Stack Exchange
Save Money with Freecycling: Take advantage of freecycling to save money and pass on unwanted items the same way. How to Dispute Credit Report Errors: Creating a School Scrapbook: Learning to create a school scrapbook is a great way to spend time with your kids and create memories. The Working Woman — Christmas Gifts for Her: Here are some ideas that will get you started on finding the perfect Christmas gifts for that special gal. Preschool Christmas Crafts You Can Finish in Ten Minutes: Simple preschool Christmas crafts that you can personalize as much as you want to or as little!
In order to buy at that price, you have to win the auction. And in order to win the auction you have to pay to bid. That, says the Federal Trades Commission FTC , makes penny auctions more like lotteries than regular auction sites. Some operate questionable tactics to lure people into playing, while others have gained reputations for poor product quality and late, or non-existent, delivery.
Penny Auctions | Online Shopping - Consumer Reports
The price starts at or near zero and the price increases by 1 cent per bid. However, in order to make a bid, you have to own a bid credit. Just to make things a little trickier, the auction deadline gets pushed back or is totally reset each time a penny bid is made, so you never actually know when the auction is going to end. To get their hands on your money, some of the less reputable penny auction sites engage in dubious or downright illegal practices that include the following:.
Again, there may or may not be an obscure statement about this somewhere on the site. Not making it clear that if you do win the auction, you still have to pay the winning bid amount plus shipping perhaps at inflated prices and sometimes even a transaction fee. Failing to send out the item to the winner, or seriously delaying shipping.
Running bogus testimonials from supposedly happy, winning bidders, both on their sites and in penny auction ads. Falsely claiming to be registered with and highly rated by the Better Business Bureau. Simply using the site as a front for phishing for your credit card number, shipping address and other personal details.
How to Avoid Penny Auction Scams By one estimate, there are now about penny auctions operating online and some of them have gone out of their way to distance themselves from the less reputable sites. So, first, know that the odds are against you winning and that some people consider it a form of gambling. Second, the FTC has issued a consumer alert which details how these auctions operate and how to avoid some of the pitfalls: Many scammers are very cunning, so being smart is NOT enough to protect yourself.
Every day smart subscribers thank us saying they would have been scammed if they didn't subscribe to ScamBusters. Don't take a chance. Subscribe FREE to ScamBusters , a public service and the 1 publication on Internet fraud.
Internet Scams, Identity Theft, and Urban Legends: Are You at Risk? Scams — Advice Identity Theft Urban Legends Subscribe. Internet Scambusters Penny auctions, which promise winners fantastic products at knockdown prices, are not always what they seem. Subscribe to Internet ScamBusters: Please enter your first name and full email address below. First Name Email We respect your email privacy. Most Popular Scams Home Search Subscribe Free Mystery Shopper Online Surveys Gift Card Scams Cell Phone Scams Work At Home Scams Scam Check ScamLines Urban Legend Unclaimed Money Scams.