Penny Auctions Scam

Penny auctions allow their members to buy expensive items such as electronics, jewelry and appliances at a fraction of what they cost. There are some established penny auction sites on the Internet, but new sites are always being started. Users have to be cautious with new sites, or they could become victims of scams.

With penny auctions, users buy a bid packet that costs around $100. Users then pay about one dollar each time they bid for an item, so they get to place 100 bids for the $100 they paid. In addition to the cost of bidding, users also pay a penny each time they bid for the item they want. A timer runs as users place bids. The person who places the last bid just before time runs out gets the item. Most sites do not refund the bid money if users do not get the items they want. If a person bid $75 and did not get the item, he or she is just out of that money. Some penny auction sites do not state this practice up front, which can be considered to be a scam.

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In one type of penny auctions scam, penny auction sites require a user to buy bids with a credit card. They then use the card information illegally. Some sites try to get users to sign up for monthly billing to their card. This is usually a warning sign of a dishonest auction site. Another scam associated with auction sites is fake bidding. Site employees may bid against real bidders in order to drive up the price of items. The computer might also place the fake bids.

Winning bidders sometimes have to wait weeks for their items to arrive. In some cases, they never receive the product they bought on an auction site. There are legitimate auction sites available. Users have to check sites carefully before joining one. There are some clues that a site might be a scam.

Penny auction sites may offer new users free bids, but in order to get those bids, users have to pay to sign up. When this happens, users are possibly dealing with a dishonest site. If a new site offers a lot of expensive items, that is often a sign that it is a scam. Most new sites cannot afford to start off with costly products. When a site has inexpensive products with high bids, that is also a warning to users. Those unusually high bids are probably the result of fraudulent behavior from the auction site.

Sites that have advertisements that do not seem honest are likely scams. These types of advertisements have get rich quick claims, easy weight loss promises, and other things that seem too good to be true. People should not join sites where the page states that users’ personal information may be sold to other companies. Sites that sell personal information are more likely to be scams. Information on scams and other criminal activity can be found in criminal psychology graduate programs, which focuses on the behavior that spurs criminal involvement.

Penny auctions can be considered to be a form of gambling. Most bidders are going to lose money because they will not get the item they tried to buy. This is not considered a scam, as users know from the beginning that they may not get the product. It is also not a scam if an item for auction can be found at a cheaper price elsewhere on the Internet. A user needs to research the price before placing bids.

New users should do their homework even when joining a legitimate site. If they do not take time to learn how the process works, they are more likely to lose money.