http://www.scoop.co.nz/stories/BU1205/S00288/penny-auction-websites-takes-more-than-small-change.htm
Wednesday, 9
May 2012
Penny auction websites takes more
than small change
Consumers are being warned about
penny auction sites,
which despite offering ‘free trials’ are quietly charging hundreds of dollars
to credit cards.
The warning comes from a new
cross-agency working group, made up of the Ministry of Consumer Affairs,
Department of Internal Affairs and Netsafe. The group is dedicated to fightingconsumer fraud.
Penny auctions are a twist on online auctions.
The difference is you pay to take part − either each time you bid or through a
monthly membership fee – even if you don’t win the auction. Each bid increases
the price by just one or two cents; so ‘in theory’ you can buy sought-after
goods for a fraction of their retail price.
The working group has had dozens
of complaints about penny auction sites, says Ministry of Consumer Affairs Team
Leader Jarrod Rendle.
“In a number of cases, the
complainants thought they’d bagged a bargain while on a seven day ‘free trial’,
but by redeeming their goods they’ve unknowingly agreed to three months’
membership, at $119 a month.
“When they tried to cancel, they
were told to send a $54 cancellation fee, along with photocopies of their credit card and
passport. This leaves them not only out of pocket, but potentially open to
identity fraud.”
NetSafe Operations Manager Lee
Chisholm says: “If you’re going to spend money on a website you haven’t used
before, do some research first. Google the website followed by the word
‘review’, or ‘scam’ and check what others have to say.”
Under the Fair Trading Act
companies trading in New Zealand are prohibited from deceptive or misleading
conduct, says Mr Rendle.
“However many of these auctions
are based overseas, where different laws will apply. If something goes wrong
with the goods you’ve bought, you may not have the same rights as you do in New
Zealand, and New Zealand enforcement agencies may not be able to investigate
your complaint.”
Background info
The cross-agency working group
was formed to share resources and better identify and publicise consumer fraud
and scams. It is chaired by the Ministry of Consumer Affairs and includes the
Department of Internal Affairs' Anti-Spam Compliance Unit and non-government
organisation Netsafe.
· For cyber safety advice visit
www.netsafe.org.nz.
· For information on spam, or to
report email, fax or text spam go to www.antispam.govt.nz.
· For more information on scams
visit www.scamwatch.govt.nz.
ENDS
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