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DealDash.com, a popular “penny auction” website, was hit with a class action alleging the company operates illegal lotteries and falsely markets its products as expensive luxury brands.
Lead plaintiff Grant Pstikyan alleges in his class action lawsuit that he lost thousands of dollars in bids on DealDash.com. According to the class action, DealDash.com is a “penny auction” website that allows customers to bid on supposedly high end items in online auctions.
The plaintiff alleges that DealDash is a “sham.” “Rather than running true retail ‘auctions,’ DealDash is actually running a series of illegal lotteries through its website on a daily basis,” Pstikyan says.
According to the class action, DealDash operates its auctions online and via mobile app. Consumers set up their own accounts and purchase “bidpacks,” or an intangible number of bids that allow them to bid on items. Consumers pay between 12 and 15 cents per bid using the bidpacks. Consumers then use bids to bid a penny on an item in competition with other consumers.
“[W]hen a consumer loses a DealDash ‘auction,’ the House wins. When a consumer wins a DealDash ‘auction,’ the House wins. Even ‘winning’ consumers unwittingly lose,” argues the plaintiff.
“DealDash’s penny auctions are perverse lotteries in which U.S. consumers have lost tens of millions of dollars in their fraud-induced pursuit of sham merchandise,” the DealDash.com class action lawsuit states.
The class action lawsuit also alleges that DealDash.com falsely represents its products as top of the line, but “the luxury ‘brand name’ products that DealDash offers consumers are not true luxury brands at all.” Pstikyan says “They are cheap, generic brands that do not sell in substantial volumes anywhere, except through DealDash and one of its affiliates.”
According to the class action, the “brand names” advertised on DealDash.com are fake and advertised at outrageously high retail prices to trick customers into thinking they are bidding on high value items. However, “consumers are betting on products that are not worth even half their advertised values, and in some cases, not worth one tenth of the advertised value,” alleges the plaintiff.
“DealDash secretly creates and offers its own generic brands and grossly misrepresents their true value to the public: all to induce consumers’ paid entry into DealDash’s unlawful lotteries,” the class action lawsuit states. The plaintiff alleges that the supposed “brand names” advertised on DealDash are fake.
The complaint includes a description of six items sold on DealDash.com as high-end luxury items. “But strangely, none of these six disparate brand names—among others—that flood DealDash’s daily ‘auctions’ have any substantial offices, phone numbers, distribution or retail sales channels outside of DealDash and its affiliates,” the lawsuit claims.
“These ‘brand name’ products are offered only on DealDash, on each brand’s own barebones and similarly-styled website, and sometimes via Amazon.com, social media or elsewhere on the internet. But these ‘brand name’ products are not selling much (if at all) anywhere outside of DealDash, much less at the extremely high ‘values’ or retail prices that DealDash ascribes to them.”
The plaintiff seeks to represent a nationwide Class of people who purchased bids through DealDash.com or DealDash’s mobile app. Pstikyan alleges DealDash violates Minnesota state consumer law, advertising law, trade practices law, and has been unjustly enriched by its allegedly deceptive marketing scheme. He is seeking damages as well as an order halting DealDash.com auctions, disgorgement of profits, and attorneys’ fees.
Pstikyan is represented by Daniel C. Hedlund, Daniel E. Gustafson and Eric S. Taubel of Gustafson Gluek PLLC, and Jeffrey R. Krinsk, David J. Harris, Jr. and Trenton R. Kashima of Finkelstein & Krinsk LLP.
The DealDash.com Illegal Lottery Class Action Lawsuit is Grant Pstikyan v. DealDash Inc., Case No. 0:17-cv-01164, in the U.S. District Court for the District of Minnesota.
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51 thoughts onDealDash.com Class Action Says Penny Auction Site is ‘Illegal Lottery’
I would have liked to also get some dollars (needed very much at the moment) but noticed that there is no case any more (www.consumer-action.org). Heard from friend that the plaintiff has not been able to show any illegal activity by any of the companies – so CASE FINITO! Big companies are loaded with liquidity to defend them self. Life sucks!
Add me in. I have really got rip off and it is a scam. More than $8000 losing or more. I see the same names with unlimited bids all night long. I asked dealdash and they said they have a lot of customers that play all the time. I belive it is a scam. Happens for the expensive pictures all the time. They are just taking you money. If you can recover anything is better than nothing.
Thanks,
Added me I want my 30$ back
Add me in
I am interested in this class action. I have proof of scam.
IT’S A SCAM!! The winner won with 95 BIDS. But I placed 301 bids using bid buddy. How did I lose? My name isn’t up on the recent bid list either.
I BID 201 TIMES MORE THAN THE WINNER.
DEALDASH took $70.00 out of my pocket just like that!
I’M SURE THEY ARE PREYING ON THE ELDERLY TOO. They should refund people that didn’t win their bids back. What you did her is WRONG!! SO VERY WRONG.
Deal dash is a total scam! They have my father-in-law hooked. I hope they are taken down soon.
I am searching for a class action law suit that I can join against DealDash. I cannot believe that I allowed them to take close to $7000.00 from me within 5 days. I even sent an e-mail to support asking if it was true that I had to pay to bid and then pay again if I accidentally won the product. None of it made sense to me, but now here I sit after losing 2 months worth of money to live on. I can not make payments for any of my bills, eat, or put gas in my car. Thank you DealDash! Yes, I was a stupid participant.
What I think about Deal Dash is that if you notice, the high price items that are offered on the same day, are all being bid by one certain name that I noticed. Why do I believe that he is put there by Deal Dash is to get the bidding as high as possible. If someone wins the item at a low price Deal Dash does not make money. So they put in a ringer to keep the bids going up. If the ringer wins Deal Dash loses nothing. They put the item back. When the bids keep going, because they won’t out bid the ringer until Deal Dash makes their money and drops the ringer. I see one only bidding on all high items and winning almost nothing. Who has all that money to throw away and not win.
Add me in. Deal dash I believe is a scam. Thanks