Posted: 4:30 p.m. Tuesday, July 9, 2013

Action 9 investigates online penny auctions

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Action 9 has uncovered a controversial online penny auction that offers guns for pennies in central Florida.

Consumers around the country claim the company uses guns as bait to collect hundreds of dollars for big-ticket items they never get.

Action 9's Todd Ulrich found many similar penny auctions are a kind of gambling where you can easily be a big loser. On the website Guns4Pennies.com, you can find assault weapons, handguns and knives for sale with the bids starting at just pennies.

Customer Ken Everist never bid on penny auction sites until he found Guns4Pennies.com.

"It's an emotional product," he said. "It kind of suckers you in. It's the first time I ever bid on anything."

Everist said he found a rifle that he wanted with just a $3 bid, so he kept bidding for the next 24 hours until he won it. He ended up paying $900 for the rifle. But six months after he paid, Everist is still waiting for delivery.

"I paid more than I should have, and I didn't even get the product," he said.

Everist claims he called and emailed the company multiple times without ever getting a response.

Everist discovered how risky penny auction sites can be, and Action 9's investigation found many winners from various penny auctions don't get the products they won.

But that's not all.

Even losing bidders had to buy bids to play, so they lost too.

Action 9 found the company's Baltimore address doesn't exist and its Florida address is a UPS Store private mail box.

According to records Ulrich researched, the man operating Guns4Pennies, Edgardo Nieves, lives in a gated luxury neighborhood in Windermere. Nieves did not return calls or emails.

The Better Business Bureau rates the company F because of several complaints like Everist's.

Critics said penny auctions use risky sales tactics, and it's really gambling.

Brian Kongszik of the Florida Council on Compulsive Gambling said the auctions fit gambling's definition of a prize, chance and loss but penny auctions have no regulations or warnings.

"It's a bidding war, it's betting, it's gambling to get that product."

Everist filed a complaint with the attorney general's office.

"I just want to yell at them to stop and I can't," he said.

Action 9's investigation found by the time consumers filed complaints, many penny auctions had closed.

Consumer groups said you'll rarely save money on penny auctions, and many are not legitimate.

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