B.C. Better Business Bureau issues warning about online penny auctions after getting hundreds of complaints

Online bidding-fee auctions, or penny auctions, have been around for a few years. Because bidders for items—ranging from electronic goods to gift cards to tools—have to set up an account and pay nonrefundable fees to place bids, whether or not they are finally successful in the auction, the activity has drawn criticism.

Now the Better Business Bureau serving mainland B.C. has distributed an official warning to be cautious of such online auction sites, especially one in particular.

“Since May, BBB has received more than 800 complaints against a company called BidRack, many from Canadians who have signed up for their services,” stated a release that quoted BBB president and CEO Lynda Pasacreta.

“Consumers have reported to us that when they sign up for the BidRack service they are under the understanding that it is free. However, upon registration their credit card is then charged a fee, often around $99. The BBB strongly encourages you to read carefully the terms and conditions of any offer.”

The bureau also reports that complaints have been filed against other penny-auction sites, alleging the use of “phony bidders” and “bots” to drive prices higher.

“Unlike typical auctions, unsuccessfully bidding on an item through a penny auction will still cost you,” Pasacreta stated in the release. “BBB has heard from people who have lost hundreds of dollars bidding on items yet have nothing to show for it.”

Research penny-auction sites with the BBB before you give them your business, the bureau advises. And register a complaint if you feel you have been misled or cheated.