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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 like to be added. I have spent over 500 the past two days there is no way these auctions are singling me out. one over 1200 bids only to be won 2 after i quit.
Please add me to class action law suit!! Against deal dash!
Please add me to class action law suit!! Against deal dash!
Please add me to the list. A clear case of bait and switch. I won my first two auctions for pennies. Have been shut out of every thing since. Not difficult to figure out. This clearly has to be illegal.
Put me on the list to I’ve spent A lot on these auctions and I’m sure everyone here has seen uncle tan guarantee that’s a deal dash bot bidder and yes all the items are cheap and you can find most of them on top hatter dollar auctions for a couple dollars listed on deal dash for hundreds
I have tried many times to win a bid but always managed to lose my money so had to purchase another bid pack. Put me on your list because I cant even get access to whatever money I still had or no one can tell me where that bid pack is.
Yes please put me on the list for deal dash lawsuit. I lost thousands and thousands. And all of the items you win are not even close to the value they put on it. I won a watch supposly worth $2500 I took it to a jewelry store they offered me $30
Please please put me on your list. I have spent thousands and thousands. I lost my home also all because of deal dash. It is for a gambler like me, a slot machine that you will win as long as you keep putting on more bids. And before I realized how bad it really is. I put over 13.000.00 bids on a picture for my daughter. And still lost, so I lost probably a couple thousand. Plus I really do believe that some of the people that are bidders. Work for dealdash. They win way to many of the same item not to be selling them. And they seem to have a endless supply of bids!! If you can help me that would be wonderful.
Please put me on the list for the lawsuit I have maxed out three credit cards I am now drowning in debt only because of DealDash
Put me on the list for a class action lawsuit!. I still cannot believe that I fell for it. Lost many thousands bidding on junk! Especially their jewelry. It’s trash. I’m in my 70’s & am now trying to pay my bills. They are a scam, but somehow they suck you in believing you’re bidding on valuable items. Believe me; they’re not. Stay AWAY from it. I’ll join a class action suit to make them pay back at least some of my money I lost.