What makes this case stand out from the typical gripes about penny auctions is the allegation that DealDash is not only misleading customers about the high-end nature of the products it offers, but that some of these brands appear to have a direct, undisclosed connection to DealDash.įor example, the plaintiff says he placed 5,494 bids on a travel bag from a brand called “Bolvaint – Paris.” At a cost of around $.13 per bid, that comes out to about $714. consumers have lost tens of millions of dollars in their fraud-induced pursuit of sham merchandise.” The plaintiff in this case alleges that DealDash’s auctions are “perverse lotteries in which U.S.
It’s a problem we warned folks about six years ago when penny auctions really began to enjoy a heyday. Meanwhile the losers spent nearly as much money only to get nothing in return. In fact, that winner may have spent significantly more on bids than the amount of the winning bid.
So an item that went for $20 on a penny auction doesn’t just cost $20 you have to factor in the cost of all the bids placed to get to that point. On penny auction sites, users have to pay for each bid they place losers generally don’t get back the money the spend on these bids. Sites like DealDash differ from eBay and other more traditional auctions in some very key ways: In a normal auction, the person who bids the highest amount wins and pays the amount they bid losers pay nothing. In the lawsuit, filed last week in a federal court in Minnesota, the plaintiff raises a common complaint about many penny auction sites: The deals they advertise don’t really reflect the amount of money the bidder paid to win an item. A California man who spent thousands on popular “penny auction” site says that not only is the company misleading bidders into believing they are can score huge savings, but that many of the incredibly expensive brands sold on DealDash are actually worthless generics from a company with an alleged connection to DealDash’s founder and biggest stakeholder.
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