Recently, the popular bargain website, Zeekler.com went offline for what it called "scheduled repairs." While it's not clear whether the site will return in its previous form, many suspect the move may have something to do with the prevalence of online complaints regarding a supposed Zeekler scam. Before you use this site or one that employs a similar business model, learn what the FTC is saying about penny auctions.

FTC Speaks Out

The Federal Trade Commission recently issued a report warning American consumers about problems associated with penny auctions like Zeekler, including potential scams involving automated bots that place bids on items in an effort to drive up prices, increase auction times and cheat human bidders. According to the FTC, this type of auction model usually proves costly to most participants, because it compels them to buy bids, which they must inevitably place at risk. In the end, these bids are lost whether the consumer loses or wins an auction, the latter of which is extremely atypical, the FTC says.

Other Organizations Join in

The FTC isn't the only organization warning consumers about penny auctions. Last year, the Better Business Bureau named these sites in a list of what it considered the most popular rip-offs of 2011. The American Association of Retired Persons (AARP) also recently spoke out against these sites, calling them deceptive and accusing some of specifically targeting seniors, who tend to be less Internet savvy.

A Different View

A quick online search reveals all sorts of consumer complaints regarding a supposed Zeekler scam; however, there are also reviews that support the company for providing so-called high-risk entertainment. Additionally, though the BBB appears to hold penny auctions in low regard, it has awarded some an A rating, including QuiBids, which it recently lauded for hiring a third-party auditing company to ensure that its auction was on the up-and-up.

That said, the FTC and AARP do not recommend these sites as a source for discounts or bargain merchandise; and both the FTC and BBB strongly encourage consumers to read each site's rules and terms prior to participating.