With all their benefits, auctions have become a more popular way for consumers to get the products they want, including cars. On top of the relatively lower prices you will get compared to the other sources, it is now much easier to participate in an auction.
And an extended public holiday, such as those leading up to Eid al-Fitr, usually sees a growing number of auction offers, especially those for cars. These auctions are very suitable for those looking to buy their own cars for returning to their hometowns during mudik, or the “mass exodus” season.
However, it would help if you were wary of scams disguised as auctions, perpetrated by swindlers working individually or as a group. These individuals craft increasingly meticulous and advanced tactics these days, leading many to believe that real auction houses organize these auctions.
Be that as it may, with all the smoke and mirrors, you can still spot many chinks in their armor, thankfully. True to the adage “nothing is perfect,” their modus operandi still has a long way to go.
The key to telling whether an auction is a scam is to be observant and to refrain from believing something too good to be true, e.g., a below-the-market price, as well as to avoid falling for the hassle-free auction process they promise you.
There are four signs you can look out for to identify whether an auction promoted is a fraud in disguise. First, these scammers will typically offer you a selection of cars at prices lower than their average market prices.
They will paint a compelling background to the auction to convince their potential victims to justify the lower pricing. It might be a clearance sale, an overstock, or the seller’s urgent need to sell the item quickly.
In contrast, a real auction house always has a reserve price for every item it auctions off. A reserve price is the lowest accepted price for an auctioned item (called “lot”) specified by the seller, and it must be announced before the auction begins.
Second, they boldly claim they can guarantee you are winning the auction. In fact, at every auction they organize, auction houses should always implement a bidding process involving all the participants, whether open or closed.
Hence, the bidders compete by offering a higher price until the highest bid, or the final price for the lot, is reached. This means that the highest bid on the lot determines the price, not by the auction organizer.
Third, these scams will typically require you to deposit money as a down payment and even allow you to pay for the won item in installments. The scammers will ask you to send the money to a personal account, not an account held by an organization.
This is a dead giveaway that the auction is a scam because real auction houses will never ask you to wire money to anybody other than themselves.
To participate in an auction, you will only be required to deposit a virtual account number, which you can obtain from your auction registration details, no later than one calendar day before the auction date. Remember that this deposit is not a down payment on anything.
Fourth, you are contacted by an unverified personal phone number or unexpectedly invited to a WhatsApp group. An auction house will not contact you from a personal phone number or via a WhatsApp group for the purposes of registration or winner announcement.
Auction houses will instead use their official website or application for these purposes. So, be cautious next time someone sends you an auction ad or announcement from a personal number or via a WhatsApp group!
If you are looking to join an auction with peace of mind and guaranteed security, it is recommended that you participate in one hosted by a legal auction house. That being said, the service and the level of convenience offered to vary between auction houses.
One of the reputable auction houses you can count on is IBID, run by PT Balai Lelang Serasi, a subsidiary of PT Serasi Autoraya (SERA). Established in 2007, the auction house is trustworthy and offers you greater ease because you can join an online, live auction right from the IBID app, available on the Google Play Store.