Authorities in New South Wales have warned consumers not to bid on items offered on so-called "penny auction" websites.
The New South Wales Office of Fair Trading says the auctions invite consumers to place bids for products like cameras and jewellery, which are offered for sale with very low, or no, reserves.
NSW Police Assistant Commissioner Philip Flogel says the offers are in fact non-refundable payments, which are collected even if the customer does not win the auction.
He says the rogue trader can make money through these non-refundable fees, as well as by selling the offered item.
"Sometimes they sell the product often at a much higher rate than what you would pay at a shop anyway," he said.
Assistant Commissioner Flogel says most auctions are operated from overseas, which means Australian consumer protections do not apply.
"Once you're online you're not protected by Australian consumer law," he said.
"So if you look to buy a product and it doesn't work and all the rest of it, none of the protections which we have in Australia - which are very good - are available to you.
"It's really outside of our jurisdiction, once the trader's overseas."