EcommerceBytes-NewsFlash, Number 2436 - December 16, 2010     3 of 5

Penny-Auction Sites Form Association to Fight against Bad Reputation

Email This Story to a Friend

Three "penny auction" websites have formed a trade association to promote integrity in the industry, which has "been wrought with poor perceptions and a bad reputation."

BigDeal, BidCactus and Swoopo formed the Entertainment Auction Association to help rid the industry of deceptive practices. Penny auctions charge consumers to place bids on auctions, and a class-action lawsuit was recently filed against QuiBids LLC alleging deceptive and unfair trade practices and fraud. CEO Nicolas Darveau-Garneau said, "The founding of the association is an important step in strengthening the industry by weeding out those companies that engage in fraudulent behavior. Our goal is to have customers feel secure that any company that is part of the association runs a website that is ethical, transparent, and safe to bid on."

The association's mission is to ensure that companies operating penny auction websites adhere to strict guidelines with the sole purpose of providing authentic, trustworthy and fair play. The Entertainment Auction Association will be run and directed by board members, officers, and a paid Executive Director, all of whom will oversee the activities of the association and its members.

It is accepting applications for membership from all industry members. Applicant companies must prove that they are not engaging in fraudulent or deceptive behavior, their marketing campaigns comply with the FTC's truth-in-advertising rules and policies, and they must submit and pass audit by a third-party accounting firm that confirms that bids are placed by bona fide users, with no use of bots, shill bidding or bidding by employees, and maintains effective controls to provide reasonable assurance that winning auctions are fulfilled (i.e., shipped).

Members must also agree to be subject to penalties (including expulsion from the Association) if they violate the Association's code of conduct.

Once accepted into the Association, new members may put the Association's seal on their site and must agree to submit to annual audits.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

You may quote up to 50 words of any article on the condition that you attribute the article to and either link to the original article or to
All other use is prohibited.