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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’
Deal dash – please investigate if claims of company bots or agents to increase the bidding price is true. If the company is doing this, then that seems blatantly criminal. Thank you.
I’ve been addicted to DealDash for many years. It seems pretty obvious that they use bidding robots. Over the years it’s gotten harder and harder to win. I’d be happy to point out which ones I think I robots there’s quite a few of them. I would like to be in a class action lawsuit against them. I could help you with the information that I have for my observance of the auctions.
I’ve spent well over $80000 on deal – and all I have to show for is a bunch of junk I’m addicted to it I don’t know how to stop it’s like gambling. All my credit cards are maxed out and I seriously can’t get rid of all this junk. Is the lawsuit over can I be a participant?
I spent 78.00 on a 600 dollar bid pack??? What all I did was do some tutorial that kept guaranteeing me it wasn’t a really easy auction and I wouldn’t be charged q dime. I don’t even know what a bid pack is that’s why I was using the tutorial. I am so sick over this I have a 3 and 4 year old I can’t even buy food for at the moment. We have less then we’ll now 22.00 dollars to live off of for 1 week! I have no idea how I opened a email from Pinchme.com claiming i earned a 10.00 gift card which generally I would always ignore bc I am rather educated and know how all over the internet you an and will be scammed for putting your credit card info into almost any anf every advertisement like the Facebook Marketplace and their to good to be true offers by someone creating a fraudulent but legal imposter web page that looks like the name brand item being sold using private label strategies. I warn others of these scams the only place I buy anything online is Amazon and i am very very careful doing so. How did my Pinchme offer thar I finally accepted after receiving receiving legit reward in the mail last week turn into a tutorial after creating a account on dealdash so I could redeem my 10 gift card turn into a almost 100.00 charge on my card. I’m sick so sick over this. Ughhj and now after reading the information on here I know I will not be getting refunded. I don’t have time to sit around placing fake bids all day to win a damn mixer. Please help this is so wrong. 2175568965
My comments are the same as all of the above.
Bogus value on cheap products.
Put me on the list. Also explain to me how they’re goving away a car for auction and recent winners have spent over 200000 bids winning that car not including the payout? How is that even possible. At 12 cents a bid? I think not. I’ve spent easily over 1000 on this site and quite frankly I feel stupid.
I was rewarded 78 bids. They took them away from me with out a refund. Dealdash says because it belongs to them. They give away free bids and that should be illegal. By them supplying free bids they cause the cause the other bidders in the auction to spend more money to continue to try to win the prize. In return dealdash is making a serious profit by making people spend more bids to win because they just handed john doe 100 free bids to auction. This is causing me and everyone else to spend a whole alot more to win in return dealdash is collecting all the money spent on the bids. That is abusing the auction by manipulating the auction for their personal gain. How illegal is that. I was terminated from dealdash and i was not refunded for the bids that i was awarded. Becuase they say its theres. But when i go into a auction and bid against someone with 100 free bids its going to cost me 100 bids i paid for that dealdash collects. So that mean they can make these fake bids that arent paid for to make others spend more money in a auction. This is so fraudulently and foul. I can’t believe this is allowed by the government. They kept my 78 bids which i earned fair and square. I should be rewarded my money. I know in my heart it is illegal to give free bids for personal gain. I want to sue them and employ a team that is willing to work with eachother. My name is christopher Hong please contact me this has to stop. Text me at 9096961396 im going to need a lawyer.
Is the lawsuit against DealDash still pending? I believe that their bidding is rigged. How can I become a part of this lawsuit?
I contacted Dealdash after I noticed that I haven’t won any thing yet I paid over $1,000 and was told I was an a royalty customer yet I “won” a $10 card and took the bids instead of the Walmart card. After I contacted Deal dish I won the card.
They are a scam site and have their employees out bid you and try forceing you to by more bid packs. I wanted a refund for my credits and got a phone call from them trying to sell me discounted packs and I refused and demanded a refund I was denied. So they got $20 from me and I never went back and used their service again. I want in on the class action and interest on top of what I was basically robbed of.
I just did a little research on their site there were several bid packs where their “agent” bid almost 3 times the amount of bids to win a bid pack in, for example, this pennywiser bid 749 bids to win a 300 bid pack. no one would ever do that unless they were working for them and got their bids for free.
I’m not surprised about these comments because these so called other bidders will be in an auction and they will spend 3x the amount on bids then what the actual item cost. It’s not a coincidence how the auctions in. It will be me and one other person in the auction then all of a sudden somebody else will show up or they’ll dip out at certain times and show up and then when you finally leave the auction ends and it’s all a set up obviously there’s no way people was paid three times the amount even rich people won’t do that.