When you’re on the hunt for bargains, an auction may be the way to go. There are auctions for all kinds of things – from estate merchandise to cars, boats and homes. There are a lot of SCAM auctions out there too. So here’s how to protect yourself and make sure the auction is legitimate. According to WalletPop.com, if you see one or more of these red flags at an auction, run!
- First, be wary if you’re offered a coupon or discount. Legitimate auctions sell stuff on consignment, and unless you’re at a single estate auction, there are many consigners. That’s why they don’t have the authority to offer coupons.
- Next, if there aren’t many people there, it could be a scam. The majority of the people at any auction are dealers, and since most of them know each other, they know who’s legit and who’s not. They also know which auctions to stay away from. If you’re at an auction and you don’t find yourself in a crowd of dealers, the auction is probably a trap for unsuspecting newcomers.
- Another red flag for auctions is if it’s held in a hotel, meeting hall, or other temporary venue. A good tip with auctions is this: Avoid buying from someone you won’t be able to find again if there’s a problem. Traveling swindlers often hold their sales in hotels and meeting halls that are rented by the day. By the time you realize that the watch they claimed was worth $10,000 – and you paid $5,000 for – was really only worth $200, they’re on their way to the next town, and the next sucker.
- Also, don’t trust the on-site appraisers. Most legitimate auctions will have an estimate of what an item is worth, but an “appraised value” is an almost sure sign of a scam. Think about it. If the auctioneer claims an item is appraised at $10,000 – why would they be trying to sell it to you for only $1,000?
- Finally, beware if only a few people are buying everything. They could be shill bidders who’re there to help drive up prices. If the auctioneer can’t get the price they want, the shill will “buy” the item and act like there was a sale when no money changed hands.