KUALA LUMPUR: Mr A, who has a "hot property" worth RM1mil, can suffer twice over when he cannot service his bank loan anymore.

While the bank has taken steps to auction his property, Mr A also has to worry about syndicates keeping the sale price down, causing him to pay the bank back more.

A property valuer may recommend a reserve price of RM700,000 but the owner is often deprived of getting the best value (anything above the forced sale value) because cartels pay off genuine buyers in a bid to keep the sale price low.

This scenario is played out at many auctions, said real estate agents.

They said syndicates monopolise the auction of titled properties.

"They form a cartel. They pay off genuine bidders depending on the value of the property," said an agent who declined to be named.

Another agent claimed that the syndicates were willing to pay between RM1,000 and RM15,000 to genuine buyers to get the property at the reserve price, which is almost always below the market value.

They said registered bidders do take "under the table money" to withdraw from the auction and it is a "common practice".

They said that those manipulating the auction process could be the lawyers, auctioneers, bank staff and court staff, adding: "The lawyer can also be in cahoots with the auctioneer and the bank."

The National Consumers Complaints Centre (NCCC) received 128 complaints from property owners with regard to court auctions in 2012 and 149 last year.

NCCC legal and dispute resolution manager Santhosh Kannan said they claimed they did not receive any notice from the banks when they failed to service their loans.

"When we queried the bank, they (bank officials) claimed they had done their part (in sending the auction notice to the property owners) and the problem could be with the post," he said.

As a result, Santhosh said many did not turn up for the auction of their property and lost them at way below market prices.

This hurts them further because they will have to pay the bank more to cover their loan, he said.

"They should get some money after the sale of their property and not lose everything," he said.

"Ironically, after the house is auctioned off, only then do the complainants receive the notice (on the sale of the property)."

Santhosh called for better guidelines in running auctions, saying it was difficult for complainants to take legal action when they are "cheated".

"How can they hire a lawyer when they do not have enough money to do so? It is a losing battle for them," he said, adding that such cases occurred mostly among the lower and middle income groups.

The agents and NCCC urged the judiciary to check for weaknesses before implementing e-bidding.

Technical trainer Raja (not his real name), who claimed to have been victimised during the auction of his shoplot in Bahau by the Seremban High Court in 2008, said there was room for abuse in e-bidding.

He asked how a bidder registering with 10 different identities would be double-checked and how the court would verify bidders' payment of the 10% of the reserve price.

But he agreed that e-bidding had advantages, as it could help avoid ugly scenes at the court premises by dissatisfied bidders.

"It is also good because bidders will not need to travel to the court for the auction," he said and asked the court to ensure only up-to-date valuation reports were used.