Holly J. Wagner, Contributing Writer 

An auction company soliciting farm equipment sellers is drawing complaints from consignors who say they've lost thousands of dollars on equipment they've sent to the block.

Operating under the shingle Equipment Plus Auction, the company has an address in Bentonville, Ark., but it's only a virtual office in an office building across the street from Wal-Mart headquarters. The company's other name and website, Recreational Complete has an address in St. Petersburg, Fla., that's also believed to be a rented mailbox.

The real business happens in Tennessee, where the principals run the soliciting operation, and Missouri, where the monthly auctions are held.

Here's how it works: The auction company's telemarketers call dealers looking for inventory to consign. They make a great pitch, with emphasis on an "asset assurance program" or "inventory protection program" and shipping offsets. Dealers are led to believe they will get competitive prices for their vehicles. But in the contract fine print is language stating the items are going to an absolute auction - the items will sell to the highest bidder with no minimum bid.

Need to File a Complaint?

Dealers who believe they have had problems with Midwest Public Auction, Extreme Live Auction, Equipment Plus Auction or Recreational Complete may file complaints with the Missouri Attorney General's office by clicking https://www.consumer.ago.mo.gov and may file complaints with the Better Business Bureau by clicking https://www.bbb.org/consumer-complaints/file-a-complaint/get-started or calling (314) 645-3300. Dealers who have had problems with any auction company offering an invoice protection plan may also contact the St. Louis office of the FBI, http://www.fbi.gov/stlouis or call the agency at 314- 589-2500.

A farm equipment dealer from the upper Midwest who asked not to be identified says he hesitated when he first got calls from Equipment Plus. But after numerous conversations, he sent two John Deere tractors with about 2,000 hours each to an auction in June. He says he insisted over and over that he would only send them if he could be guaranteed they would bring $400,000. When it was all over, he got just $280,000.

"After six or eight calls or emails, they said, 'They've got to be here in three days.' I said I would not do it," he explained. "Then they said, 'We've got a rainy day auction coming up. That is another auction we will have on Sunday.' I said I am not sending them if I am not guaranteed $400,00 for these two tractors."

That's where the sales pitch took a hard turn. The dealer said the salespeople use the company's sliding commission scale to double-talk the terms of the contract.

"They play with words," he said. "What they told me they said was, they guarantee their commission rate at $400,000."

After the auction was held Sunday, June 23, the dealer said he was unable to contact the company until midweek. By then his vehicles were gone. He was able to contact the buyer and got another shock: Not only had he been charged a commission on the tractors, which he was told were sold for $150,000 each, but he learned the bidder had paid $172,500 each. When he asked about it, he was told the difference was a "buyer's fee" the auction house charges - and that it was none of his business. Meanwhile, the tractors were resold to a buyer in Mississippi.

A spokeswoman at the auction company, who also worked for Midwest, said she was instructed by her "higher-ups" not to comment about Equipment Plus or the company that owns it, USA Services, and declined to give names or contact information for company owners or management.

The Poplar Bluff City Collector's office, which manages business licenses in the city, says Midwest Public Auction had a license to hold auctions at the site that expired last year, and no one has had a license to do so since.

Under the Midwest Public Auction and Extreme Live Auction names, many dealers reported getting just 20 cents to 50 cents on the dollar for their merchandise. That led to numerous disputes involving dealers holding back titles or giving them up only reluctantly. Other disputes ended up in court and are still playing out. Several dealers made complaints to the St. Louis Better Business Bureau, which issued a warning about Midwest last September. The person listed as the Midwest/Extreme office administrator on the BBB website is also the registered owner of the Equipment Plus and Recreational Complete URLs.

The dealer interviewed for this story is angry, but taking his lumps. He said he regrets not paying attention to an uneasy feeling he had before the auction, but there's a simple reason he didn't: "Because we needed to reduce inventory costs."

Dealer Takeaways

  1. Read contracts carefully. The contract Recreational used as recently as June includes this provision: "Seller also agrees that he/she is relying on his/her good judgment, and not on any statements or comments made by any member or associate of the auctioneer."
  2. Do your homework. Don't be rushed into signing a contract without due diligence. Search the Internet for complaints about the auctioneer and the references it provides.
  3. Trust your gut. If it seems too good to be true, it probably is.

For more information, the Missouri Professional Auctioneers' Assn. has a primer about the difference between "absolute" and "reserve" auctions here: http://moauctioneers.org/home/absolute/.