TINA.org investigated DealDash, one of the world’s largest penny auction websites, and determined that the company operated a form of illegal gambling and used deceptive marketing tactics to lure consumers to its website, including advertising large savings on auctioned items won without disclosing true out-of-pocket costs, using consumer testimonials touting atypical savings without disclosing that customers typically lost money, promoting a perpetual sale on the purchase of bids, failing to disclose material connections to certain products auctioned on the site, and promoting a 100% money-back refund policy without adequately disclosing the restrictions of the policy.
- Sent company a warning letter
- Filed complaint with FTC
- Filed complaint with AGs in five states and D.C.
- Notified BBB, which gave company A+ rating, of illegal practices
- Company made certain changes to marketing
A TINA.org audit of DealDash marketing reveals that the company has ceased to advertise misleading winners’ testimonials on its social media accounts (although the vast majority of testimonials prior to TINA.org’s complaint remain up). Additionally, a disclosure specifying the estimated total cost of products “won” when accounting for the price of bids now appears in a recent DealDash TV commercial. However, this disclosure is insufficient because, among other reasons, it appears in inconspicuously small, quickly disappearing text at the bottom of the screen.
DealDash indicates on its “Winners” webpage the estimated total cost (including the cost of bidding) of products “won,” assuming the bids used to obtain the products each cost 20 cents. This added information is presented in small gray font beneath the deceptive “Sold for” price, which is in larger, bold, black font, and refers to an assumed cost of bids that is not the regular price.
After seeing no noticeable changes to DealDash’s marketing campaign or business operations, TINA.org sends complaint letters to the Federal Trade Commission and the Attorneys General of Minnesota, New York, Connecticut, Pennsylvania, Massachusetts, and the District of Columbia urging each of the agencies to take action.
TINA.org also notifies the BBB, which gave DealDash an A+ rating, of the company’s deceptive and illegal marketing and business practices. Later that same day, the BBB changes its rating of the company to “NR” (No Rating).
TINA.org sends warning letter to DealDash notifying it of TINA.org’s findings, and asking that it remedy the deceptive and illegal practices.
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Auction Site A Losing Bet for Consumers According to Ad Watchdog TINA.org
Advertising savings of 90 percent or more on a range of flashy electronics and consumer goods, penny auction website DealDash.com markets itself as “the fair and honest bidding site.” An…
DealDash’s Hidden Costs
Bid farewell to the low prices you see in ads. You will pay more.