In for a penny..?

TECH TALK: These auc­tions are not all they seem, says David Behrens.

Yorkshire Post - YP Magazine - - Front Page -

T’S a good rule of thumb that if an of­fer on­line seems too good to be true, it prob­a­bly is. Bear that in mind when you’re next of­fered an iPhone for a fiver.

There is a rash of ad­ver­tise­ments on web pages at the mo­ment for elec­tron­ics and white goods at prices which seem on the sur­face to be un­miss­able, and most are put there by the oper­a­tors of so-called penny auc­tions.

Dif­fer­ing from “tra­di­tional” auc­tion sites like Ebay, where bids are free and you pay only if you win, these sites charge a non-re­fund­able fee for each bid you make. The item for which you are bid­ding may in­deed go for a song, but only to one per­son; ev­ery­one else who bid and lost is out of pocket. You can’t buy any­thing on a penny auc­tion for a penny. In­stead, you must buy blocks of cred­its, cost­ing be­tween £30 and £350, and work­ing out at be­tween 10p and 12.5p each. You use up to six cred­its each time you bid - so if you have ten punts on an item, you’re down at least six quid if you don’t win. The bid­ding is con­fus­ing. Some penny auc­tion sites in­sist on unique bids – which means you must guess an amount dif­fer­ent to any other bid­der. If some­one else has bid an iden­ti­cal amount, both bids are can­celled and bang goes your credit.

It’s easy to see how penny sites like Mad­bid, Bid Budgie and Fast­bid­ding make their money: they can cover their costs many times over from the cash they rake in from failed bid­ders – to whom the whole thing is said to of­fer the same adren­a­line rush as on­line bet­ting. Have the au­thor­i­ties cot­toned on to this? The Of­fice of Fair Trad­ing (now re­placed by other quan­gos) ad­vises con­sumers to watch for “mis­lead­ing or fraud­u­lent sites”, with­out spec­i­fy­ing which

YOUR CALL:

those might be, and points out penny auc­tions can be ex­tremely com­pet­i­tive. Games can be open si­mul­ta­ne­ously to hun­dreds of play­ers, and there’s a high chance of be­ing pipped af­ter you’ve spent a bun­dle on mul­ti­ple bids.

The OFT also points out that au­to­mated bulk bid­ding, which some penny sites openly en­cour­age, can pro­long the auc­tion and push up costs quickly. In the event you win an item, you may not be able to re­turn it if you’re dis­sat­is­fied, even though penny auc­tions are tech­ni­cally cov­ered by the Sale of Goods Act. The ob­vi­ous ad­vice, then, is to al­ways carry a ten foot barge pole when in the vicin­ity of one of these auc­tions – eas­ier said than done be­cause the ad­ver­tis­ing doesn’t al­ways make its pur­pose clear un­til it’s too late. Never sign up for any­thing on­line un­less it’s some­thing you ac­tively went look­ing for.

If the price looks too good to be true, it prob­a­bly is.

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