According to the Better Business Bureau, penny auctions are costing Americans thousands of dollars every day by using deceptive business models that prey on consumer ignorance. Recently, a site called Kudu Bids has gained attention for offering gift cards and electronics for pennies on the dollar; however, there are numerous online reviews complaining about a supposed KuduBids scam. Before you visit this site or one offering similar promises, learn what the BBB is saying about these so-called bargain websites.

A warning to consumers

Recently, the BBB issued a warning letter outlining the potential pitfalls associated with penny auctions. According to the BBB, the organization has received hundreds of complaints, which led it to include websites like KuduBids in its annual top ten list of popular rip-offs.

Carrie A. Hurt, president and CEO of the BBB's Central, Southwest Texas, Coastal and the Permian Basin office says most consumers don't understand the risk associated with these bargain websites. According to her, winning users often end up paying more than an item is worth, thanks to the cumulative cost of placing bids. Additionally, because these sites force users to pay for the right to place bids, failed bidders end up losing money without gaining anything in return.

Are they all the same?

According to the BBB, consumers should be wary of any penny auction site; however, it has awarded some with A ratings, including QuiBids and DealDash. According to the BBB, these companies attained these ratings thanks to relatively low complaint volumes and because they've taken steps to audit their practices to prove they aren't using automated software to make fictitious bids on behalf of the companies.

What about Kudu Bids?

Recently, negative reviews have been popping up all over the Internet complaining about a supposed KuduBids scam in which the company is accused of using automated bots to encourage user failure. Although there's no way to know if these claims are true, the BBB warns that the strategy is frequently utilized by disreputable companies. Currently, KuduVids.com has not been rated by the BBB, and consumers would be well-advised to stay away from companies that haven't gained the organization's seal of approval.

Recommendations

Despite giving high ratings to certain penny auctions, the Better Business Bureau clearly states that it does not endorse the business model. That said, it does offer a guide to consumers who are dead set on participating.

According to the agency, users should always read each site's terms and conditions. It also recommends that bidders start small and set strict spending limits they can stick to. Additionally, the organization encourages consumers to research an item to find out its actual worth. Finally, the BBB warns users to avoid sites that have been accused of using automated bots and encourages bidders to check the organization's Business Review to see if a company has received an inordinate amount of complaints relative to its size and age.


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