Over the past several days, we've been receiving alerts from the Better Business Bureau on penny auction site, GrabSwag.com. They are yet another site that has deceptive registration processes that end with the consumer being charged $99, instead of receiving just the few free bids the site advertises upon registration.

From the BBB.org website:

"One penny auction website – Grabswag.com – advertises frequently through Facebook pop-up ads and falsely claims BBB Accreditation. Complaints indicate Grabswag’s website claims to offer ten “absolutely free” bids for new customers who sign up with them. However, while conducting a secret shopping investigation recently, Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota, discovered the site required a credit card number and other personal information in order to receive the “absolutely free” bids. Shortly thereafter, Grabswag billed her account for $99, which is the price for a “Starter Pack.” When she tried to cancel after noticing the charge, the company’s call center (which is located in the Philippines and operated by a third party) refused to provide a refund in full but instead proposed successively better “resolutions,” going from offering a 50% refund to a 75% refund. Though Grabswag maintained they do not grant full refunds, they eventually agreed to issue a full credit.

“The company’s terms and conditions did not disclose any charge upfront, which is a huge concern,” said Badgerow. “What’s also concerning is that in some Internet browsers the terms and privacy policy do not open or allow the reader to scroll past the first paragraph. People have no way of knowing what they’re getting into.”

The BBB of Central Florida currently maintains the report on Grabswag’s parent company, Nextown Technologies, LLC. There is an alert on Nextown Technologies’ profile regarding the non-disclosure of the $99 charge, as well as pending complaints with that Better Business Bureau, all having to do with that concern."

The PennyBurners Team attempted to find the same FaceBook ad that Ms. Badgerow found, but we were not successful. When registering for GrabSwag by going directly to the domain, registrants are well-aware that they are purchasing Bid Packs before bidding, and of the charges associated with bidding.

This is something we've seen before, and unfortunately, it is negative attention like this that sheds a bad light on the whole industry. Thankfully, this is NOT the norm for penny auction sites. Most penny auction sites have very clear verbiage in several places on the site on how the site works, what it costs to play, and when bidders are charged.

The key to avoiding situations such as these is to do your research. Safety precautions include:

1. Checking for reviews of the site in question on reputable penny auction forums and review sites, such as the PennyBurners Penny Auction Forum.

2. Reading all of the verbiage on the site, including Terms & Conditions, Rules, and FAQ.

3. Never giving your credit card information in exchange for "free bids" or for "more information". You should only enter your credit card information when you are ready to pay for something, and when you know exactly what you're paying for.

Have you bid at GrabSwag.com? Share your experiences on the PennyBurners Penny Auction Forum, and discover legitimate and trusted penny auction sites.