Fraud Tactics Used in Penny Auctions
With the increasing number of penny auction sites on the internet and their popularity, penny auction fraud is also rising. The owners of the penny auction sites want to increase their market shares so they use such fraud tactics to make the bidders run out of the money.
Many site owners are trying to make their policies transparent so as to avoid fraud and get the trust of their bidders. But in reality the world of penny auction is full of fraud, uncertainty, dishonesty and unfair means of business practices. Only few websites of penny auction like DealDash etc are working with honesty and fair means. Some commonly used fraud tactics in penny auctions are explained below.
Shill Bidding is the most commonly used fraud tactic by the penny auction site owners. In this technique the known persons of owner take part in the auction like friends and employees etc just to increase the end cost of the auction and to consume more time so that more bidders will bid in the auction.
Another very common fraud technique used by the penny auction site owners is Bidding Bots. In this technique there is a built in function in the website that creates user ids that are completely fake. Those fake ids take part in the auction and place bids for the items against the real player. In this way the paid bids for the item increases as the real player is not aware of this fraud tactic.
There is another drawback that is the won items in auctions are not delivered to the bidder. The main reason for this flaw is that it is very simple to create penny auction websites as they cost very low. This business also runs well because many people find it quite interesting to invest less and get more. But when many items are won by the bidders at cheap prices then it is difficult for the low rated sites to fulfill the demand so the won items are not delivered and the bidding amount of the bidder get wasted.
There are also some frauds based on debit and credit cards. The people usually prefer to go for some newly created penny auctions site as there are more chances of winnings. No doubt this tips works but it also comes with a big risk as there is no authentic history of the website to calculate its integrity in business practice.
As the new websites have less business so there are more chances that the owner will go for some fraud tactics to increase the income. If the payment method is via debit or credit card then this confidential information can be used wrongly by the owner. So go for the websites that provide PayPal service and has a good history e.g. DealDash.
So above were some famous fraud techniques applied by the penny auctions site holders. The bidders must look for some reliable auction websites that clearly shows their rules and also play fair.