Business ProfileforBidStarzz

The discounts offered on penny auction sites are tempting, but the BBB warns bargain hunters that they should stop and do their research before making their first bid.

Most commonly with a penny auction, users must set up an account and purchase bids with a credit or debit card; each individual bid may cost less than a dollar and are often sold in bundles. Every item has a countdown clock and as people bid, the cost of the item goes up incrementally and more time is added to the clock. Even if you don't win the item, you still have to pay for the bids you placed which can add up over time.

The BBB has received hundreds of complaints from consumers about penny auctions and we're encouraging online bargain hunters to do their research. Unlike typical auctions, unsuccessfully bidding on an item through a penny auction will still cost you and the BBB has heard from people who lost thousands of dollars bidding on items and have nothing to show for it.

Many people have complained to the BBB about being automatically charged just for signing up for what was supposed to be a free trial. Others complainants have voiced their concerns that some sites use phony bidders and "bots" to drive up the prices on items. Customer support is also a major concern as many complainants explain they had a very difficult time receiving refunds or resolving other issues with the company.

Before making your first bid on a penny auction:

* Research the penny auction with the BBB first. Not all penny auctions are created equal. Always research the penny auction site with your BBB at www.dallas.bbb.org before signing up.

* Read the fine print carefully. Before providing any personal information or signing up for any "free" trial with a penny auction, read all of the fine print carefully on the website. Pay close attention to details on signup and annual fees, minimum bidding requirements, maximum prize amounts and how to get a refund.

* Know what you're buying. Before bidding on an item, research how much it costs elsewhere and keep track of how much you're spending on bids overall to see if you really are getting a good deal.

* Keep a close eye on your credit card statement. Some complaints were also automatically charged for more bids when they ran out or for a yearly registration fee, not realizing this would be the case.

* Complain to the BBB if you feel you've been ripped off. If you feel you've been misled by a penny auction site, file a complaint with the BBB.