St. Louis, Mo., Aug. 12, 2013 – Just a year after customers of a Missouri auction house alleged that salespeople at the company tricked them out of tens of thousands of dollars, the Better Business Bureau (BBB) is warning that new companies operating out of the same building are generating almost identical complaints.
The BBB warns that the new companies appear to have ties to Donnie M. “Tiger” Smotherman of Goodlettsville, Tenn., former owner of Midwest Public Auction. Midwest was the focus of several BBB complaints before it shut down operations late last year. The company has an “F” rating with the BBB, the lowest possible.
The BBB suggests caution when doing business with the new firms -- Recreational Complete, Equipment Plus or USA Services. Recreational Complete reports an address in St. Petersburg, Fla. Equipment Plus reports an address in Bentonville, Ark. Both companies auction items from the same warehouse in Poplar Bluff, Mo.
The warehouse in the 1500 block of Cravens Road is the same one where Midwest and Extreme Live Auctions held auctions in 2011 and 2012. Customers of Midwest and Extreme filed BBB complaints claiming the companies gave them oral promises that they would receive a guaranteed minimum for their items, but then reneged on those promises.
Smotherman told the BBB last year that written contracts clearly stated that Midwest was running “absolute auctions,” which meant that vehicles and equipment would be sold to the highest bidder. He said Midwest made no guarantee either orally or in writing that consignors would receive a minimum amount for their items.
Similarly, a man who described himself as the owner of Equipment Plus said consignors upset about recent auction sales should have read the contract more carefully.
The BBB has learned that the businesses not only shared the same auction facility, but also shared several of the same employees, including Smotherman, the former owner of Midwest who now appears to be in a management position with Equipment Plus. Both the owner of the Poplar Bluff warehouse and the auctioneer who calls the auctions said they have current contracts with Smotherman for auctions at the Cravens Road site.
Michelle Corey, BBB president and CEO, said that the new businesses apparently failed to learn from their predecessors’ mistakes. “The company names have changed, but the game appears to be the same,” she said. “There is a pattern of questionable business behavior. People are continuing to suffer.”
In a September 2012 news alert, the BBB urged caution when consigning items with Midwest. Several customers told the BBB that representatives of Midwest used misleading sales tactics to get their auction items, promising one thing in phone conversations and something different in printed contracts. Some customers said they lost thousands when items sold for prices much lower than promised.
Smotherman was listed as the sole owner of Midwest with the Missouri secretary of state when the business registered in February 2011. Later that year, Extreme Live Auctions began operating out of the same Poplar Bluff facility.
The websites for Recreational Complete (www.boatandrvcomplete.com) and Equipment Plus (www.equipmentauctionplus.com) were both created on Dec. 21, 2012, about the same time that Extreme Live Auctions stopped operating.
A man who identified himself as Max Paul Haas, sole owner of Equipment Plus, told the BBB that Equipment Plus has no connection to Midwest. He also said that he does not know Smotherman.
Both the owner of the warehouse and the man hired as the auctioneer told the BBB they have never heard of anyone named Max Haas. Both said they deal with Smotherman.
A sales coordinator for a North Dakota farm equipment dealer said his company lost $120,000 to Equipment Plus in a June auction at the Poplar Bluff warehouse. The sales coordinator said he told auction representatives repeatedly that he would not consign two company tractors unless the auction house could guarantee a minimum of $400,000.
“Nothing is going anywhere without a $400,000 guarantee,” he said he told an auction representative. The dealer said the company assured him they could meet his demand, but then wired him payment of $280,000 after the sale. Bank records show that the Equipment Plus payment came from Smotherman.
When the dealer called Equipment Plus to protest, a company representative told him that the dealer had misunderstood the agreement and that the tractors had been sold to the highest bidder. “They got away with $120,000,” the dealer said.
A recreational vehicle dealership in Illinois shipped six vehicles to the Poplar Bluff warehouse, believing it was being guaranteed a minimum sale of $115,000. Instead, Recreational Complete has offered $90,000. When a manager called to complain, he said he was told to “read your contract.” The loss, the manager said, would be “enough to put a weaker dealer out of business.”
Haas said he did not know why Smotherman’s name was on the $280,000 bank transfer documents to the North Dakota dealer. “Who cares who paid (the dealer),” Haas said. “Whether I paid him or President Obama paid him, I don’t care.”
He said that the North Dakota dealer should have understood the contract he was signing. “Did I have a gun in his mouth making him sign it? I don’t understand all the fuss.” He also said that “unlike the people before me, we did it by the book.”
Haas said Equipment Plus has five offices across the U.S., including St. Louis, and conducts auctions in 12 cities. Asked where he lives, he responded “on the moon.”
The BBB offers the following advice to persons considering consigning items to auction companies:
- 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 companies by going to www.bbb.org or by calling 314-645-3300.
Contacts (News Media Only): Michelle Corey, President & CEO, 314-645-0606, email@example.com, or Chris Thetford, Vice President-Communications, 314-584-6743, firstname.lastname@example.org, or Bill Smith, Trade Practice Investigator, 314-584-6727, email@example.com