ComCom issues warning to consumers about overseas penny-auction operating in NZ

The Commerce Commission is warning consumers about the penny-auction website DealSave, or mydealsave.com, which runs auctions for electronic items such as cameras, tablets, phones and televisions.

In a just released statement, the commission says consumers are being drawn to the website mostly through advertisements on Facebook. To participate in auctions, DealSave requires users to buy packages between $129 to $499, entitling buyers to bid on penny-auctions for electronic items with very low or no reserves.

In penny-auctions, items are typically sold with low, or no, reserves and a fee is charged for bidding.

The commission says it has concerns about the site after receiving a number of complaints.

“Almost all those who have expressed concerns to the commission have found their credit cards have been charged even though they have not bid on anything,” says Stuart Wallace, consumer manager for the commission.

Some penny-auction websites also charge a fee to register. DealSave’s website says registration is free, Mr Wallace says, but users are encouraged to enter their credit card details as part of the registration process.

“Users who have done so have reported being charged up to $370 even though they have not made a bid. When they have queried it with DealSave, they have been told they have made a purchase and no refunds will be given,” Mr Wallace says.

The commission has doubts DealSave is a New Zealand-based company.

“At first glance consumers may think DealSave is a New Zealand-based website as it has a New Zealand contact address and a New Zealand flag and dollar currency sign. However, our enquiries show that the website appears to be hosted overseas. The company behind the website also appears to be based offshore and has no connection with its advertised New Zealand address,” Mr Wallace says in the statement.

This hinders the commission’s ability to take action.

“We therefore think it is important to warn consumers so they can make a well-informed decision on whether to participate in these auctions,” Mr Wallace says.

The commission recommends consumers to contact their bank or credit card company if they see unauthorised charges on their credit cards.

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