Internet Auction Site’s a Scam, Class Says

     LOS ANGELES (CN) – Though it claims to be free, the online auction site charges $99 “without any authorization whatsoever,” suckering consumers who believe they are “simply ‘registering’ for a free trial offer,” a class action claims in Superior Court.

     Irate customers claim that “in addition to the deceptive ‘free bids,’ promotional ‘pop-up’ and ‘teaser’ ads, also utilizes at least two phony news reports that are made to appear to be legitimate news editorial stories from official news channels.”
     Three named plaintiffs, from three states, claim immediately charges its suckers $99 when they click on an ad, though not a single registration step on its website “indicates that there is any type of registration fee or other initial fee.”
     Also sued is Kool House, a Delaware LLC based in Culver City, Calif.
     The “phony news reports are carefully placed by defendants in order to lure consumers to,” according to the 31-page complaint. “The headline of the news stories is: ‘SaveBig Saves Consumers 95% Off Retail,’ and the stories indicate that the story is either: (1) ‘part of a new series: “Ways to Save Money During the Recession” We examine tips for getting what they need for much less!’; or (2) ‘part of a new series: “How to Save Big Bucks When Shopping Online.”‘
     “The news stories also deceptively include the statement ‘As Seen On,’ followed by numerous logos for legitimate news sources, including ABC, Fox News, CBS, CNN, MSNBC, and USA Today. However, no link is provided to any stories on that are conducted by any of those news sources, and there do not appear to be any such stories on or in those news outlets.”
     And in a nice, or perhaps wretched, touch, according to the complaint: “(B)oth ‘news stories’ include the first name (no last name) of a supposed news reporter named ‘Johanna,’ followed by a statement indicating that she ‘investigates new shopping trends on the Internet.’ Interestingly, the photos provided of the reporter ‘Johanna’ in the stories are of two different women (one blonde and one brunette).” (Parentheses in complaint.)
     In its phony “news stories,” claims it can offer low prices because it gets its items ‘from warehouse closeouts, surplus auctions, and liquidation clearance auctions,'” according to the complaint. does not disclose that the real reason it can offer “such low prices in comparison to retail outlets is because it charges $.60 per penny bid, and receives $6,000 per $100 that is bid on each item,” the complaint states.
     The customers who read the purported news stories and click on the promotional offer for at the end of the stories are directed through the same registration process as the customers who registered after clicking on the free bid ads “and also are automatically charged $99 for a bid package in excess of the promotional ‘free bids,’ without any clear authorization to do so,” according to the complaint.
     The class claims that a close review of the “news reports” reveals fine print at the bottom of the page that states: “The story depicted on this site and the person depicted in the story are not real, rather this story is based on the results that some people who have used these products have achieved. The results portrayed in the story and in the comments are illustrative and may not be the results that you achieve with these products. This page receives compensation for clicks on or purchase of products featured on this site.”
     The class claims that “the auctions appear to be rigged in a manner that make them nearly impossible to win.” The auction items start at $0, and each bid increases the sale price by 1 cent, though charges consumers $.60 per bid, the class claims. stiff-armed suckers who asked for a refund of their $99, telling them “that the Website was ‘down’;” “that the refund request is under review;” or directed them to “a third party call center with limited authorization to do anything,” the class claims.
     The class seeks an injunction, and restitution and compensatory and punitive damages for fraud, unfair competition, and negligent misrepresentation.
     It is represented by Edwin McPherson with McPherson Rane.

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