Ads for six pay-per-bid auction websites have been banned for misleading consumers about the full costs of buying items such as laptops, TVs and Apple watches.
The Advertising Standards Authority’s (ASA) investigation into the penny auction sites – BidBid, LikleBid, TokenBidder, MadBid, Swoggi and Bidwiz – found they all left out important information or made misleading claims about the total cost of winning bids, and therefore their true value.
The sites, which claim to offer expensive goods to the winning bidder for a fraction of the recommended retail price (RRP), are a type of timed online auction where customers pay each time they bid, usually with pre-bought credits.
What they didn’t tell you
But the ASA found the sites did not make the cost of placing bids clear to customers, incorrectly quoted RRPs and did not include shipping charges, which in some cases was more than the cost of the item itself.
The ASA found that Swoggi could not provide adequate evidence of its claims that a customer had won an iPad for £57.76, a KitchenAid mixer sold for £39, an iPhone 6s went for £29 and an iPad Air 2 sold for £19, concluding they were “misleading”.
It found no evidence to substantiate claims by Bidwiz that customers could save “up to 90% on all products” and “save up to 95% on brand new top products”.
And the £59.99 a month bill on top…
The site also failed to make it clear that customers buying a bid package would be signing up for a 14-day trial membership after which they would be automatically billed £59.99 a month for a minimum of three months.
The ASA found that BidBid did “not make sufficiently clear” that customers had to buy bids for 50p each in packages of 10 bids or more, and discovered an instance when a shipping fee of £24.99 applied to a laptop listed with a “sold” price of £14.29.
LikleBid was unable to prove that the RRPs it listed for products were the same as those seen generally across the UK market, or that customers achieved the claimed savings of up to 95%.
In its ruling against MadBid, the ASA said consumers were likely to assume that there were no costs associated with bidding, that they could join in as many auctions as they wished and that there were no additional delivery charges for any items they won in an auction – none of which were accurate.
It also found that MadBid’s RRP claims and savings claims had not been substantiated and were misleading.
The ASA’s director of complaints and investigations, Miles Lockwood, said: “It’s unfair that consumers have been led to believe they’re getting a big discount or bargain when it turns out savings claims were exaggerated and associated costs and terms and conditions haven’t been clear.
“Our rulings and guidance put pay-per-bid auction businesses on notice. They need to get their websites in order so that consumers get a fair deal.”