Is there such a thing as a penny auction scam? Of course there is. There are a several ways a site that poses as a legit penny auction site can scam people out of their hard earned money. But the majority of these kind of sites are not scams. Here’s what goes on at scam sites and here’s how to make sure you don’t get ripped off.
There are probably a hundred or more sites on the net today where you can bid on items and the prices of each auction are raised by one or two cents every time a bid is placed. People are able to get great deals on these kind of sites, but you do have to watch out because there are some sites out there where people have been scammed. The way this happens is when the owners of the site either specifically set up scripts to bid on auctions that are too low for their liking or they pay people to monitor auctions and do what is called shill bidding.
Shill bidding is where people bid on items they have no intention of winning just to raise the price of auctions. Even though you really can get iPods for 90% off at some penny auction sites, each bid you place can cost anywhere from 50 cents to one dollar. So, in the end, it does pay for the owned of the site to get as many bids on an item as they can. The more people bid on a particular item, the more money they make. However, a penny auction site owner obviously doesn’t want to get caught shill bidding or creating a bot to do it for them because they then lose their credibility and probably most or all of their customers.
The best was to avoid the penny auction scam is to spend time on any site you want to join. If you find a TV, digital camera or MacBook Air or whatever you cant to bid on at a site, you need to watch that site for a day or so and look at several auctions to make sure everything looks legit. Also, if you see a site where the same kind of an item is selling for a lot more at one site than it is at any other penny auction, you may have a scam going on.
Another thing to look out for is a site that looks cheaply done. If the graphics look cheesy, the site is poorly organize or they may only have a few items up for auction, this could be another sign of a penny auction scam. Other signs that bear watching are lots of items up for auction, but hardly any items being bid on. If 99% of the price counters on an auction site all say zero, I wouldn’t bid on anything on a site like that.
There have also been reports of people winning auctions on some sites and then not having the items shipped to them. You can avoid this by looking for auction sites that have lots of previously won items. If you can’t find the section of a site labeled Ended Auctions or something similar, then it may be a good idea to either look into that site further or to just stay away from it.
If you do your due diligence you are much less likely to get ripped off or scammed when whopping at penny auctions.
If you want to look into some legitimate penny bid auction sites, then check out the articles below:
Big Deal Penny Auctions (different from above site)