The BBB has issued yet another warning to consumers, this time regarding BidRack.com:

From TucsonCitizen.com:

"BBB of Delaware has received 222 complaints on a company called “BidRack”. This is a “Penny Auction” website that offers an “Online Bidding” atmosphere on many high tech and popular items, including iPods, Kindles, computers, designer items and more.

Online ads for online penny auctions are popping up everywhere, but BBB warns consumers that they should do their research before making any bids.

With penny auctions, typically users set up an account and purchase bids with a debit or credit card. Each bid may cost less than a dollar and are often sold in bundles of 100 or more. Every item in the auction has a countdown clock and as people place bids, the cost of the item goes up and more time is added to the clock. Each bid costs money, and even if you don’t win the product, you still have to pay for those bids placed.

Consumers have reported that when they sign up for the BidRack service, they are under the understanding that it is “Free.” However, upon registration, their credit card is then charged a fee, often around $99. BBB strongly encourages you to read carefully the terms and conditions of any offer.

To date, BBB of Delaware has not received a response from the company on any of the complaints.

To read more about BidRack, or to check out another company, contact us at www.tucson.bbb.org."

(To see full article, click: BBB Warns of Penny Auction - BidRack)

We've seen these kinds of reports before, most notoriously against sites like the now-defunct SwipeAuctions. However, as has been the case in the past, it usually goes back to consumers not reading Terms & Conditions carefully, and not being careful enough with their credit card information.

For example, I went through the registration process on BidRack.com today, and here is what I found:

Page One:

Page Two:

The screenshot is a little blurry, but it clearly says at the top "You are purchasing 100 Bids + 1 Spin for $60.00". The customer then enters their shipping info, their payment info, and then hits "I'm Ready To Start Winning!". In this particular case, there certainly isn't any "fine print". The article referenced above states that some users are being charged up to $99, which indicates to me that some bidders must have chosen the 175-bid Bid Pack option, which is $99.

We cannot say it enough:

Consumers: Do Your Homework!
Be Smart With Your Money!

You should never give someone your credit card information unless you are ready to buy something and you understand the risks.

What the BBB should have focused on is the fact that BidRack has negative reviews for not shipping items, bad customer service, and more. There's no doubt that BidRack has a lot to answer for; however, in cases like this, the responsibility rests on the consumers' shoulders to be careful with their money.

Perhaps instead of constantly focusing on negative misconceptions, we should focus on Bidder Education. If more bidders understood how a penny auction works, and what to look for before signing up for and giving their information to a penny auction site, we wouldn't see as many of these articles floating around.

Join the PennyBurners Penny Auction Forum! We'll gladly help you navigate the penny auction industry with ease! And yes, it is IS completely FREE!