BBB Warns Auction Consignors To Read Contracts Carefully

When you sell something in an auction, it’s important to understand that there seldom are guarantees that you’ll get the amount you’re expecting for your items.

Today’s Better Business Bureau press release includes a warning prompted by auction consignors who say they were offered a guaranteed price but actually got much less for the items they consigned. In several cases, the items were big-ticket equipment that normally sells for tens of thousands or even hundreds of thousands of dollars.

The BBB has found ties between two new auction firms that have conducted auctions in Poplar Bluff, Mo., and another firm that used the same auction facility last year. All of the companies appear to have ties to Donnie M. “Tiger” Smotherman of Goodlettsville, Tenn. Smotherman was the former owner of Midwest Public Auction, which was the subject of several complaints to the BBB before it shut down last year.

The new firms – doing business as Recreational Complete, Equipment Plus or USA Services – used the same warehouse in Poplar Bluff, Mo., that Midwest Public Auction used.

Customers of Midwest and Extreme filed complaints with the BBB saying that the companies gave them oral promises that they would receive a guaranteed minimum for their items, then paid them much less.

Smotherman told the BBB last year that Midwest’s written contracts state that its auctions were “absolute auctions,” which means that the items would be sold to the highest bidder with no minimum bid or reserve clause. A man who described himself as the owner of Equipment Plus said consignors to recent auctions should have read the contracts more carefully.

The BBB advises consumers to be especially careful when consigning items to an auction:

• Get a printed contract, and read and understand all contract terms before signing. Do not rely on oral promises or guarantees that are not in the written contract.
• If you are uncomfortable about accepting the lowest bid for your items, make sure a reserve price (the lowest price you are willing to accept) is written into the contract.
• Check out a company's BBB Business Review by going to www.bbb.org or by calling 314-645-3300.

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