Local 10 viewer shares warning about live auction risks
Read the terms & conditions before bidding; the fine print matters
Auctions can be exciting, but in the thrill of placing live bids, you could overlook the terms and conditions.
The fine print could allow an auction company to keep your deposit, even if what was pitched isn't what was delivered.
When it happened to one Local 10 News viewer, he Called Christina. While he was eventually refunded in full, there are lessons to learn.
Before bidding on any auction:
- Get to know the company. Check with the Better Business Bureau, the Attorney General’s Office and the Department of Business and Professional Regulation
- Know what you are bidding on
- Find out what protections the auction site offers buyers
- Read the terms and conditions
According to the Federal Trade Commission, when it comes to online auction sites, you will want to familiarize yourself with the site’s rules and policies for buyers and sellers.
AANTV, LaVista & The Drainage Ditch:
Joe LaVista enjoys live auctions. He was watching one produced by America’s Auction Network (AANTV) when a piece of property in Punta Gorda caught his eye.
"It sounded like a nice lot to buy," said LaVista. "I paid 20 percent down which was $1375."
Excited about his purchase, he drove to the lot and that’s when he saw a drainage ditch.
"I didn't see this on the video," said LaVista. "At no time did he mention or show the 30' that was lost to a drainage ditch with a 10' drop off."
He felt bamboozled and wanted his deposit back. When that didn't happen, he says, is when he contacted Call Christina.
In a written statement to Local 10 News, America's Auction Network stated that the drainage canal at the rear of the property was shown with aerial maps during the auction presentation, adding that "this specific lot was available for review 25 days prior to actual auction date…it appears that Mr. LaVista did not do any research prior to bidding on this vacant lot."
Pattern of Complaints:
The Better Business Bureau has issued an alert for St. Petersburg-based America's Auction Network which is registered with the state as Jeremiah's International Trading Company, Inc.
"BBB files indicate that the business has a pattern of complaints concerning delivery issues, sales practices, billing and refund issues," the alert states.
The BBB indicates that it contacted America's Auction Network about the pattern of complaints in 2013.
When Local 10's Christina Vazquez spoke with Keevy KcAlavy, identified in state records as Jeremiah's International Trading Company's vice president, he stated that he was not aware of the BBB-issued alert.
He also stated he didn't have any further information when the Call Christina team asked about LaVista's complaint specifically and the pattern of complaints in general.
More than a dozen people across the country have complained to state regulators about the company since 2013.
Most complaints are regarding the company's real estate transactions, of those most are complaining about false advertising or misrepresentation, saying the condition of the property they bought didn't match the property they were pitched.
In 2015, William Barscz of Great Barrington, Mass. told the Florida Attorney General’s Office, "AANTV misrepresented a home" in Ocala, "during their live auction…They negligently listed the home as concrete block stucco construction while it is in truth a pre-cast panel home which is NOT what I way paying for. I got this information from the Marion County Appraiser’s Property Card which is the public record AANTV should have consulted. The $15,400 was a down payment which AANTV will not refund."
Barscz told Local 10 News that "it took some time and strong demands," but his $15,400 deposit was eventually refunded in full.
Also in 2015, a woman from Pennsylvania told the Florida Attorney General's Office "I was sold a lot in Oakhill, Florida by AAN and the facts about the sell were lies and false statements made seller on TV. The land is not build ready as they mentioned on TV and the Lighthouse Cove manager states she does not know how they were able to sell the lots without their knowledge. American Auctions is ripping folks off left and right and need to be stopped."
A woman from Seattle complained to the Florida Attorney General's Office in 2015 about a property she purchased from AANTV adding, "I think that it should not be allowed for AANTV to advertise on national TV and lure people into their incorrect and misleading sales gimmick."
In 2014, a man from Iowa told the Florida Attorney General's Office he was out $12,200. According to the complainant the company sold a home he placed on a bid on.
"They said it was already sold, I was out my deposit. Found out house has been sold like this at least 3-times in the last three weeks. If each party has lost their 20 percent down payment, they would never want to sell it. This is a scam and it is not right."
Also in 2014, a retired Army veteran from New Jersey told the Florida Attorney General's Office: "As part of the purchase, it was agreed to have the missing AC unit installed by Jeremiah International….When I had the 4 point inspection on 1 October, 3 weeks later, the inspection failed for 5 items, 3 of them pertaining to the AC installation, one being that the AC is NOT working."
Local 10 news reached out to him. Via email he said: "When I had a licensed contractor sent out to check on it, I was informed that it was not installed properly and that a licensed installer would have never done the install that way. I contacted AANTV and they basically told me that it was my problem, even though on the AANTV video it stated that the AC unit was new and working. The licensed contractor stated that the unit was not repairable and I would have to get a new AC unit. So I spent several thousand dollars on a new AC unit in order to pass the four point inspection."
The Florida Department of Business and Professional Regulation Board of Auctioneers is responsible for licensing and regulating auctioneers.
In 2008 a violation was issued to Keevy P. McAlavy for "allowing an auction to be conducted by an auctioneer without an active license."
"AANTV, DBA: Jeremiah's International Trading Co, A Florida Licensed Television Auction House, did allow two auctioneers," the uniform disciplinary citation reads, "to conduct live television auctions with delinquent licenses."
They were fined $100.
Two other citations, also carrying a fine of $100, were also sent to the two auctioneers that DBPR stated were operating as a television auctioneer for America’s Auction Network (AANTV) while subject's license was delinquent, expired.
Terms & Conditions: Read the Fine Print
The company points to their terms and conditions which are quite clear. It states that the down payment is nonrefundable and in all CAPS states, “IF YOU DID NOT DO YOUR DUE DILIGENCE AND ARE NOT PREPARED TO PAY WITHIN THE ALLOTTED 3 WEEKS (15 BUSINESS DAYS), PLEASE DO NOT BID.”
The terms and conditions state that “All real estate is sold "AS IS, WHERE IS" and "bidders are encouraged to: fully investigate public records and all other matters which may disclose information relative to the property; Personally Inspect Property or get professional guidance."
They also state that, "AAN does its best to show video, pictures, and generally describe the property, but any information provided by AAN regarding the condition, square footage, appliances, number of rooms, floor plan, lot size, utilities, homeowners association, building codes, permits, zoning, market value, previous sales, taxes, rental income or expenses, are approximations only and for informational purposes only."
In essence, if you take them at face value, make a bid and then are disappointed then shame on you for not doing your due diligence and they are keeping your deposit.
"That's how they make their money, that's how they make their money," said NOVA Southeastern University consumer protection law professor Michael Flynn.
We played Flynn the video of the auction that enticed LaVista to bid and showed him the terms and conditions.
WEB EXTRA: Flynn speaks about live auction risks
"Is there something about watching a TV auction, just gets them really excited and they sort of forget these terms and conditions they signed?" Vazquez asked Flynn.
"That is the business of the auctioneer," replied Flynn. "To ramp up the enthusiasm of people and get them thinking in terms of 'boy, this is a really good deal. I can't wait to get this, the price is right, and so now they are excited in anticipation of being able to get something at a reduced cost. That is what auctioneers do."
Flynn said it behooves a consumer to carefully read the fine print before deciding to place a bid.
"This is 'as is, where is,' and when the contract says that, that really puts the consumer in a tough spot to be able to argue, 'Well I didn't know about this and I didn't know about that.' They specifically say no refunds are allowed in those terms and conditions, that to me is a red flag to every consumer that gets involved in these because if you are going to put down a 20 percent down payment and you can't get that back based on the terms and conditions than I think I would shy away from doing this."
Flynn says researching public records to learn everything you can about a property before you bid is just as important as familiarizing yourself with an auction company's terms and conditions.
"You need to go and inspect the property and look at it before you buy it. You should do that before you bid so you know what you are getting into before you bid, especially if there is a policy of no refunds," he said. "Those terms and conditions, which are quite strict with regard to down payments and no refunds and cancelations, should put the buyer on notice that this is something they need to pay attention to. After all it is buying real estate and real estate is the largest investment most of us as individuals make in our lifetime so you need to pay attention."
The terms and conditions also have a section pertaining to arbitration, "Solely at AAN’s discretion, AAN may require that all disputes, controversies, or differences between the parties arising out of or related to this Agreement shall be resolved through binding arbitration."
Consumer advocates argue the system of arbitration is stacked against the consumer.
"There is no judicial review, so even if the arbitrator makes a completely whacky ruling of law you can't go to a court and do an appeal of it," said Paul Bland, director of a Washington D.C.-based public interest law firm called Public Justice.
"Arbitration providers know the companies are repeat customers, so they have an economic incentive to rule in favor of the company," said Stephanie Hines of Public Citizen, a non-profit consumer rights advocacy group.
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