Valley man files class-action lawsuit against penny auction website

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By Jim Carr By Jim Carr

BUCKEYE, Ariz. - A Valley man has filed a class action lawsuit against a penny auction website called BidCactus.com.

We first introduced you to Steve Mendelson in January after he registered with the website in order to get good deals on Christmas gifts.

In four weeks, he wound up spending $15,000 with the website, including $650 for an I-Pod that retails for only $230, and more than $1,000 on Wii gaming accessories that sells in stores for $450.

Each one-cent bid actually costs the consumer 75 cents.

Steve says that makes it easy for users to get carried away because you're not thinking about the overall amount you're actually spending.

In the lawsuit, attorneys claim ‘Bidcactus auctions feed the temptation to continue to bid and bid... And also exploits the difficulty consumers have in making snap decisions.’

Unlike websites like EBay, where if you bid on an auction and lose, you don't pay; with BidCactus the money you spend is gone once it's used.

Steve and his attorney believe that makes BidCactus more like a lottery or gambling website, not an auction, and they want the money he lost returned.

“There's just something that's still wrong,” Steve said. “I mean, obviously I did win things and bid on things but majority of it should be coming back. It's just wasted. It's a trickery. It’s not legit.”

3 On Your Side contacted BidCactus about the lawsuit which was filed in federal court late last week.

In a statement, a representative writes:

"Bidcactus categorically denies these claims and has retained counsel to resolve this matter.  BidCactus stands by its commitment to fairness, and honest practices as stated in its Seal of Assurance."

3 On Your Side will continue to follow this story, and let you know how it all plays out in court.