Have spent thousands on this site across probably 10 different auction companies. There are some major problems that Proxibid knows about and even encourages. I don't know the exact fee structure but obviously Proxibid is getting a percentage otherwise they would remove the scammers.
First of all the auction companies set their own terms, meaning they decide their premium, shipping and handling costs, how long they have to ship items, return policies etc...
There are a select few auction companies on there which mostly give accurate listings and don't overcharge for shipping and handling but they are few and far between. Just like Proxibid, the auction houses don't own the things they sell but they get a percentage of the sales which incentivizes them to get as much money as they can.
So in all auctions there's an incentive to hide flaws, but in this situation unlike Ebay Proxibid does everything they can to protect dishonest sellers.
The most common tactic the auction houses use is shill bidding. They use a house bidder to bid items up to people's max bids. Proxibid allows this as long as the auction house makes a disclosure in their terms of service.
Also they exaggerate things quality and value, to the point of fraud in the listings, they don't disclose mechanical problems on vehicles. They sell coins and collectibles which are listed at a much higher grade than they actually are. I've personally reported the worst sellers to Proxibid and they said if I don't like it don't bid in the auctions.
Proxibid protects the sellers, by telling you to work it out with the seller when 9 out of 10 times the seller knows about it and will just say all sales are final. They don't make feedback comments public and they let the sellers inflate their feedback by buying their own stuff. You'll notice most scam companies have thousands of 4-5 star feedback. They don't make the comments public so people who are mentioning the scam don't ruin it.
To be honest statistically, if you buy on the site more than a couple times you will get scammed. They can make a lot more money this way so even the auction companies that start out legit usually start scamming as well. I went back to Ebay to source my items. At least they have buyer protection policies there.