Lawsuits against auction.com are coming, and there will be class action lawsuits and individual lawsuits, and it is going to be one big legal mess. If you think auction.com is a pure auction site for real estate and foreclosures and short sales, think again. What many of us believe is fraud is now common practice at auction.com, and it has come to light that auction.com is anything but a transparent and honest auction service for real estate.
Lawsuits Against Auction.com
There are many legal issues that may involve consumer fraud, but perhaps the biggest fraud against ordinary consumers like you and me is a shock to investors when they first find out. Did you think that if you bid on a property on auction.com that you were bidding against other buyers or investors and that it was an open and honest auction? Oh, how wrong you would be.
It turns out you may be bidding against yourself in one of the biggest multi-billion dollar frauds this retired real estate lawyer has ever heard of. I run a real estate brokerage and periodically work with buyer clients to purchase properties on auction.com, but we have discovered we are not the only ones who have gotten caught by auction.com’s fraudulent auctions.
Auction.com appears to have software programmed to run the bids up even if there are no other bidders! Not only have investors discovered this all over the country and they are complaining, but auction.com actually admits this on their website with this language. I believe this language is an admission that will spur on lawsuits against auction.com.
Until the seller’s reserve price is met, Auction.com may counter bid on behalf of the seller. Counter bidding gives buyers and sellers more flexibility to find a mutually agreeable price. Counter bids do not occur after the seller’s reserve price is met.
That means you will be bidding against yourself! Can you believe their bold admission? Their statement that this process of you bidding against yourself “gives buyers and sellers more flexibility to find a mutually agreeable price” is incredible nonsense. Here’s what they should have written, “Counter bidding allows auction.com to create a false bidding process whereby you bid against yourself and keep running the price up while you bid again and again against yourself.” As if that isn’t bad enough, auction.com states it will not pay a real estate agent’s regular commission, but after you win the bid (bidding against yourself), they will tack on a 5% fee that the buyer also pays (in addition to the fee they are charging the seller).
Forget the reserve price. Auction.com does not post or reveal the reserve price on any property, and I have clients who insist that the fake bidding continues long after the reserve price was met (as they later find out what the reserve price was). This means that when you bid on a property, the software is apparently entering a higher bid to get you to bid against yourself. Of course, auction.com plays games with words, because they call it entering bids on behalf of the seller, but that is total nonsense. That would not be an auction at all. Does anyone else see a problem with a site called auction.com that is not a real auction?
Lawsuits Against Auction.com
You will find plenty of complaints on the Internet if you do a Google search, but I do not recommend bidding for properties on auction.com without a great deal of expert knowledge on investing in real estate and intimate knowledge about the auction.com process. Do not get caught in this consumer trap for the unwary. I believe lawsuits against auction.com are coming.
Last Updated on October 14, 2014 by Chuck Marunde