You may have recently seen a commercial featuring an attractive woman talking about Qui Bids, an auction website that claims to offer big savings on name-brand products. According to the website, the company's goal is to make its auction model transparent, while increasing its membersí chances of winning an "awesome item." But is QuiBids legit; and if so, why are so many consumers complaining about the website? According to the FTC, it's usually because they don't understand how penny auctions work.
The FTC steps in
The Federal Trade Commission recently issued a report warning consumers about the pitfalls associated with penny auction websites like QuiBids. According to the agency, many of these sites use bait-and-switch tactics to deceive customers, while others are often guilty of failing to come through with deliveries. In its report, the FTC said that the vast majority of users tend to lose money at these auction websites, because they're forced to pay for each bid whether they win or lose an individual auction.
The agency also warns that winners tend to pay much more for items than they expected; for instance, according to the FTC, when a consumer wins electronics or a gift card for the price of $50, the ultimate cost may add up to around $250 if the consumer was forced to use over 200 bids to win the auction.
QuiBids legit in the eyes of the BBB
Currently, the Better Business Bureau gives QuiBids.com an A- rating based on the age of the business and relative volume of consumer complaints. That said, the BBB recently issued its own report warning consumers about the pitfalls of penny auctions.
According to both the BBB and FTC, most consumer complaints center on a fundamental misunderstanding of how penny auction's work. Although many penny auction sites have been accused of using automated software to make false bids on behalf of the auctioneers; according to the BBB, QuiBids.com recently completed an internal audit to verify that this wasn't the case with its company. The BBB states that the audit was performed by a respected third-party professional services and accounting firm, named Grant Thornton. Ultimately, the audit was said to reveal that Qui Bids uses effective controls to ensure that all bids are placed by human customers and not automated bots.
Should you participate?
Although the BBB is satisfied that QuiBids is legit enough to merit an A- rating, the auction company has faced at least one lawsuit accusing the site of being nothing more than a gambling platform. Considering the nature of the auction model, consumers should be wary of risking their money unless they fully understand what they're getting into. The FTC strongly recommends that consumers read each site's terms of service before participating to prevent unexpected losses. If you are in a hurry to score big bargains on gift cards or electronics, you'd be well-advised to slow down and follow the FTC's recommendations.