Media Releases

Commission issues penny-auction website warning - 'DealSave'

21 February 2014

The Commerce Commission is warning consumers to be aware of the penny-auction website ‘DealSave’ (www.mydealsave.com), as it has concerns about the site which runs auctions for electronic items such as cameras, tablets, phones and televisions.

Consumers are being drawn to the DealSave website primarily through advertisements on Facebook. In order to participate in auctions DealSave requires users to purchase packages costing between $129 and $499, entitling buyers to ‘bid’ on penny-auctions for electronic items with very low or no reserves.

“Recently we have received a number of complaints about DealSave. Almost all those who have expressed concerns to the Commission have found that their credit cards have been charged even though they have not bid on anything,” said Consumer Manager Stuart Wallace.

Mr Wallace said, “While the website states that registration is free, 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.”

“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,” said Mr Wallace.

“Because this company appears to be based overseas, the Commission’s ability to take effective action is constrained. We therefore think it is important to warn consumers so they can make a well-informed decision on whether to participate in these auctions,” said Mr Wallace

Anyone who has used the DealSave site and believes they have an unauthorised charge on their credit card should contact their bank or credit card company in the first instance. Depending on the individual situation the bank or credit card company may be able to refund charges that have been improperly incurred.

Background

Penny-auctions are auctions where items are put up for sale with very low, or no reserves and a fee is charged for bidding on the auction. The fee paid by the bidder is the amount bid, whether they win or not. Some penny-auction websites also charge a fee to register. If you do not win the auction, you do not get the money you have paid to bid refunded. The process in itself is not illegal provided that the website clearly outlines the process and its fees.

More information

See more scam warnings from the Commission.