Highest unique bid auctions...

sammob

Hi, I wonder if someone can help me regarding my consumer rights regarding a highest unique bid auction website.

If you're not familiar with the concept of these types of sites, the idea is that you pay for bids - a bid may cost several pounds in some cases.

An auction item will have a maximum price set - say £19 for an iPad for example. You place a bid (at a cost) and if at the end of the auction your bid is the highest unique bid, you win the item for the bid price. So you'll see adverts where Joe Bloggs from Liverpool won an iPad for just £10.57. what they don't tell you is that Joe Bloggs may have placed 100 bids at a cost of £2 each in order to get the highest unique bid.

Anyway...

This is my question - I've won several items now, and the company (which I suspect to be corrupt) are taking much longer to pay out than their terms and conditions state. It's been almost 2 months now - and all I've had from them is an apology email saying that due to circumstances beyond their control there's been a delay (one of the items, I elected to take a cash alternative - so I'm struggling to understand what circumstances could stop a company sending out a cheque within 2 months!).

So... I fully expect to have to file a claim against this company in the Small claims court. I have a full evidence chain - emails saying I've won, copies of their T&C's, payment receipts from PayPal for the item etc.

My question is - if I won an item with an RRP of £800, but my winning auction bid price was £23 - Would I be entitled to file a claim for the RPP or could I only claim for the £23 bid price (plus the cost of any bids placed).

I guess from a consumer point of view - it would be similar to company offering to sell an £800 product for £23.. if I pay the £23 we have a consumer/supplier contract - if they breach that contract, am I entitled to claim the £800 or just the £23.

Thanks for taking the time to read this post, all replies greatly appreciated.

Thanks

Flyboy152

Surely this is a form of gambling and should be covered by the appropriate legislation?

Evilm

I would guess the costs incurred (So £23 plus bid costs). That would put you back in the same place as before the issue occurred.

I don't think you could claim for the cost of a replacement.

DWatts

Just the £23 (and maybe any other costs incurred on the site). You definitely wouldn't be able to claim for a sum of money you never paid.

sammob

Flyboy152 wrote: »

Surely this is a form of gambling and should be covered by the appropriate legislation?

Hi Flyboy, thanks for your quick response

These types of auctions have been investigated by the UK Gaming Commission and they published a decision on 29th August, 2011 stating that since they require skill to win, and little if any 'luck' then they are not considered to be a form of gambling.

This particular site has some very suspicious wins (I've been gathering evidence, that I may submit to Trading Standards) - it's my opinion that their activities are quite possibly criminal offences, but proving it isn't easy. For instance in the past year, the vast majority of all the larger prizes (with RRP's over £100 have been won by just 15 individuals - including a Car). A large prize is auctioned every day and in the last 365 days - 347 of those prizes have been won by the same 15 people.

sammob

DWatts wrote: »

Just the £23 (and maybe any other costs incurred on the site). You definitely wouldn't be able to claim for a sum of money you never paid.

I thought that might be the case, just wasn't sure if it was similar to purchasing an item online.

i.e. Supplier offers an item for sale, I pay the price of the item and that payment is accepted - that forms a contract to supply the item for that price, unless the supplier has made an honest mistake.

So my recourse could only be to claim the money paid?

It certainly seems that consumers are being ripped off by these sorts of sites.

For example, the item I won with an RRP of £800 had over 2000 bids placed against it - at a cost of around £1.50 per bid. So the company has taken in £3000 in bid costs, all pre-paid.

I put in 5 bids - costing me £7.50 to win the item for £23. So all I would be able to claim would be £30, but all of those other bidders paying £3000 between them can't reclaim anything?

That has to be a criminal offence surely?

DWatts

sammob wrote: »

I thought that might be the case, just wasn't sure if it was similar to purchasing an item online.

i.e. Supplier offers an item for sale, I pay the price of the item and that payment is accepted - that forms a contract to supply the item for that price, unless the supplier has made an honest mistake.

So my recourse could only be to claim the money paid?

It certainly seems that consumers are being ripped off by these sorts of sites.

For example, the item I won with an RRP of £800 had over 2000 bids placed against it - at a cost of around £1.50 per bid. So the company has taken in £3000 in bid costs, all pre-paid.

I put in 5 bids - costing me £7.50 to win the item for £23. So all I would be able to claim would be £30, but all of those other bidders paying £3000 between them can't reclaim anything?

That has to be a criminal offence surely?

It might be best to use an example - if you buy something on Amazon which has an RRP of £800 but it's on sale at £700, if you return it for a refund you get the £700 back. The same principle would work here. You're only going to get back what you actually paid.

I'm not sure how the prices you're quoting are worked out though. I'm assuming you paid £7.50 for 7 bids, and won the item at £23, so you paid £30.50 altogether? You would possibly be able to claim back that £30.50, since the bids were used for the item. Worst case scenario, you'd get £23 back since that's what you actually paid for the item and you haven't received it.

But, the company might have terms and conditions saying bids are bought and used irrespective of winning an item. So you and the other wouldn't be able to claim back the cost of the bids, even though the item was never actually sold.

halibut2209

I always thought it was the lowest unique bid.

sammob

Thanks for your reply

DWatts wrote: »

But, the company might have terms and conditions saying bids are bought and used irrespective of winning an item. So you and the other wouldn't be able to claim back the cost of the bids, even though the item was never actually sold.

I thought that potentially, I could reclaim the cost of bids potentially arguing that it's an unfair term ( Unfair Terms in a Consumer Agreement 1999 )

To be honest, the £30 I've lost here isn't the issue I'm most outraged by, it's the fact that a company can legally con thousands of consumers in this way, and there's no real protection.

Do you think it's something Trading Standards might be interested in, or is there someone else (an Ombudsman etc) who I might have more luck with?

Thanks again for the reply, greatly appreciated.

sammob

halibut2209 wrote: »

I always thought it was the lowest unique bid.

There are various types of these auction sites - Highest Unique, Lowest Unique, and Penny auctions to name a few. They all sound like massive cons to me, but thousands of people seem to be suckered into them and it doesn't seem like there's much that can be done to stop them.

arcon5

What payment method did you use?