How exactly do sites like TeleBid work? Or to phrase it a bit more accurately, "get away with it"?

There is absolutely no way that you can pick up a Playstation 3 for under £1 unless it fell off the back of a van, and the van happened to be driven by a one-eyed man with a gruff voice and a wooden leg.

If you haven’t heard of it, this is TeleBid.

So, it’s crooked, right? They found some legal loophole? Or am I missing something?