24 May 2013

Another car company investigated over bidding

8:08 am on 24 May 2013

The Commerce Commission has confirmed it's investigating a second car company suspected of using secret bids to inflate its prices on online auctions.

The investigation follows the sentencing in the Auckland District Court of another company which bid on more than 500 of its own TradeMe auctions to drive up prices.

Auto Co Ltd, also known as Millennium, placed 7000 bids on 530 of its vehicles using different TradeMe accounts.

The company has been fined $42,000, on top of $122,000 voluntarily paid to TradeMe in reparation, and has been banned from the auction site.

TradeMe says another car company suspected of running a similar scam has also been banned.

The Commerce Commission says no charges have been laid in that case so far.

It does not believe such bidding to artificially inflate prices on online auction sites is a widespread problem.

The commission said on Friday it's difficult to know how common the practice is, but consumers have a right to know that they are bidding against other genuine buyers, and not against the vendor.

Competition manager Stuart Wallace told Morning Report he does not believe the illegal conduct is common, but he urged consumers to be wary about high value vehicles being sold for low reserve prices.