Same players, different names? Another auction firm draws dealers’ wrath

Publish Date: 
Dec 3, 2012
By Holly J. Wagner

POPLAR BLUFF, Mo. – A vehicle auction company with a St. Louis address may be tied to another auction firm whose activities drew a warning from the St. Louis Area Better Business Bureau (BBB) in September, although at least one owner denies a connection exists.

Moreover, dealers who have been pitched an “invoice protection plan” by some of the auction companies say that the protection offered is an empty promise.

Several dealers now report that they are losing money by doing business with Extreme Live Auctions. The business’ St. Louis address is a rented mailbox, and documents from at least one dealer who sent vehicles to an Extreme auction expecting that it would be held in St. Louis reveal that it was actually conducted at the Poplar Bluff headquarters of Midwest Public Auction (MPA), an auction firm that was the subject of the BBB warning earlier this year.

But MPA owner Donnie “Mike” Smotherman told Dealernews that he held his last auction in September and closed MPA, in part because of what he calls “B.S.” from dealers, and in part due to unflattering media and BBB reports. “I’ve been out of it since September. Midwest Public Auction is closed now. I sent my last tax form in October,” he said. “This business is not for me. It’s too much B.S., it’s too much lying.”

Donnie "Mike" Smotherman fires back at dealers: "Way more shady on their side." Click HERE for the story.

The St. Louis Area BBB issued its warning after dealers from nine states complained to the agency about MPA business practices. Dealers say MPA salespersons promised they would get a minimum amount for their vehicles that were instead sold at absolute auction for much less than they were worth, often below invoice. BBB investigator Bill Smith said the agency added Extreme Live Auctions to the MPA warning a few weeks after the initial advisory was issued.

A BBB warning automatically goes to the Attorney General’s office in Missouri. A spokesperson there said the office is working to mediate three complaints against MPA and one against Extreme. Smotherman said no one from the Attorney General’s office has contacted him.

"God's my witness; nobody has ever called me from the FBI."

-- Donnie "Mike" Smotherman

Smotherman and people involved with a handful of auction companies say it’s a case of seller beware -- and that dealers should pay more attention to the auction terms when they sign up to participate. Some dealers have complained to the Federal Bureau of Investigation (FBI), saying they were duped. Again, Smotherman said the FBI has not contacted him.

“God’s my witness; nobody has ever called me from there, nobody has ever called me from the FBI,” Smotherman said. While he contends he never depended on powersports auctions for his primary income and has since exited the business, an invoice protection plan continues to surface, if in slightly altered form.

JAMIE'S CUSTOMS. Jamie’s Customs of Big Bend, Wis., filed its complaint with the BBB after selling vehicles through Extreme Live Auctions. What this dealer reportedly experienced with the auction and a signed invoice protection plan follows a pattern cited by other dealers.

"They were super-pleasant to work with before the auction. After, not so much."

-- Jokey Froming, Jamie's Customs, Big Bend, Wis.

The dealer said Extreme contacted Jamie’s sales manager Oct. 18 and solicited vehicles for sale. The sales manager made the deal, the vehicles were picked up Oct. 21 and then auctioned Oct. 22. Only after the auction settlement documents were faxed back two days later did office manager Jokey Froming realize the vehicles had brought much less than expected.

“They were super-pleasant to work with before the auction. After, not so much,” Froming said. “Tuesday morning we get a fax with what our units supposedly sold for. It was $27,000 short of what it was supposed to be.” The invoice protection plan yielded just $2,800, not the up-to-$35,000 cushion the dealer reportedly expected.

Other dealers reporting problems with Extreme were contacted by Dealernews; however, many of them are, so far, unwilling to talk on-record.

Calls made in late November and early December to the phone number on Extreme’s website went to a recording indicating it was a voicemail box that hasn’t yet been set up. Calls to the owner of record’s home went to a generic answering machine message, and messages seeking comment were not returned by press time.

Is Extreme Live Auctions connected to Midwest Public Auction? Click HERE for the results so far from our investigation. 

H-D BOWLING GREEN. A separate court filing tells the story of Harley-Davidson of Bowling Green, which reportedly sent 13 Harley-Davidson units (model years 1999 and later) to an MPA auction on Dec. 11, 2011. The bikes, valued on a page of the auction contract at $141,462, were sold for $86,900, leaving the dealer just $76,359 after commissions and adjustments.

HDBG held back the Manufacturer’s Statements of Origin (MSOs) after the sale, prompting MPA to file a breach of contract suit April 12. MPA attorneys unsuccessfully tried to have the case moved from federal court to a state court in Missouri; pretrial conferences are expected to start soon.

MPA’s suit alleges HDBG failed to meet contract points, including one specifying that vehicles to be sold must be in good condition and free of encumbrances. Smotherman said there were condition issues with some of the bikes. (continued)