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BBB Alert: Don’t place that bid yet! Be sure it's not an auction scam

BBB Alert: Don’t place that bid yet! Be sure it's not an auction scam

Rockford, IL – April 19, 2022 – Auctions can be a great way to buy an expensive item at a significant discount. However, the Better Business Bureau cautions consumers that scammers know the promise of a “good deal” is an excellent way to lure unsuspecting victims out of their money.

“Even if an auction appears legitimate, potential bidders should be wary,” says Dennis Horton, director of the Rockford Regional Office of the Better Business Bureau. “Scammers may try to hustle you with “entry fees” or “pre-bid deposits” without even having any actual items in their auction. It is essential to research businesses in advance by checking BBB.org”

Horton notes, “BBB Scam Tracker has received several reports of fake auctions phishing for consumers’ personal information and money.”

How the scam works:
You see an ad for a website auctioning cars, motorhomes, boats, and other big-ticket items. You visit the website, and everything seems legitimate. The site might even claim to be affiliated with the government. You register to bid, which may include sending the auctioneer a copy of your driver’s license and other sensitive personal information.

After you register, you place a bid on an item. You win the item for a price that seems almost too good to be true. The auctioneer gives you instructions on how to transfer the money. Once you’ve paid, the auctioneer will likely disappear and become impossible to contact. The item you won is never delivered. Unfortunately, you just gave money and personal information to a scammer!

BBB tips to avoid auction scams
  • Research auctions and auctioneers before participating. If an auction claims to be a “government” auction, reach out to the branch of government hosting the event to make sure it’s legitimate. If you’re looking at a private auction or an auction run by a private company, look into the auctioneer ahead of time. Look carefully at reviews from previous buyers. Does the auctioneer have a good reputation? Do they have the appropriate licensing to conduct the auction? If the answers are “no,” or there is no information available about the auctioneer, it is best not to participate.
  • Get to know the terms and conditions of the auction. Find out whether there are entry fees, winning bidder fees, taxes, or shipping costs you’ll be responsible for paying. Winning an auction may not be as simple as paying the price you offered.
  • Don’t give in to bidder’s excitement. Don’t make impulse buys when participating in auctions. Scammers will be counting on you to get wrapped up in the excitement and could even prod you into a fake bidding war to get more money out of you. Even when you are on a reputable auction website, set a spending limit and stick to it. If an item goes over your budget, don’t buy it.
  • Understand how auction sites work. Check each auction website’s rules and policies carefully. Pay special attention to what buyer protections the auctioneer has in place. Find out what policies apply if an item is not delivered or is significantly different from its description. Each site may have different rules and procedures. If a website offers no buyer protection at all, that is a red flag.
  • Find out how payments are made. Know how and who you will pay before you place a bid. If the seller insists on using a payment method you are unfamiliar with, do some research. If the payment service doesn’t have a customer service line you can contact to find out details about how the service works, don’t use it to make a payment.
  • Check the seller’s contact information. The same goes for the seller or auctioneer. Check out their website and look for valid contact information. If you can’t reach anyone, or if you do speak with someone who is uncomfortable answering your questions, don’t participate in their auctions.
  • Be careful with your personal information. Be sure you trust a website, company, or auctioneer before you divulge your personal information. Once your information is in the hands of a scammer, you won’t be able to get it back.

For more information
Visit BBB.org or follow us @ChicagoBBB on social media. If you have spotted a scam, whether or not you lost money, please report it at BBB.org/ScamTracker. Your report exposes scammer tactics and helps protect your community. Sign up for BBB’s free consumer newsletter, BBB Edge, at BBB.org/ChicagoBuzz.
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About BBB:
BBB of Chicago and Northern Illinois is a nonprofit organization that has served both consumers and trustworthy businesses for over 95 years and is a part of the IABBB. We help protect consumers from scams and provide a free database for consumers to see business ratings and reviews to find businesses they can trust. We connect customers to businesses they can trust. BBB is the sign of a better business.

The International Association of Better Business Bureaus (IABBB) is the network hub for BBBs in the US, Canada and Mexico. Like BBBs, IABBB is dedicated to fostering honest and responsive relationships between businesses and consumers -- instilling consumer confidence and advancing a trustworthy marketplace for all. Please visit BBB.org for more information.
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