As to the changes in the wording, if you switch to a regular style 'highest price' listed I think you'll find yourself doing a lot less in refunds, and you won't need to change the wording.
Right now the only wording that would be acceptable before signing up or at least before paying for credits should be:
"Beware, the highest bid you have seen on the item that you are interested in may be an arbitrary amount over the bid displayed"
and
"Second highest bid" on the item page, or a big fat disclaimer that in spite of the two-stage payment process you are using a proxy bidding system, which means that the chance is very large that your bid will not be the winning bid after you place it, and that you'll just end up buying a bunch of credits, which you can only spend on 'poorly drawn giraffes' and other stuff of that nature.
Or some way to test if your bid would be the highest bid before you commit to buying the credits (that would defeat some of the advantages of a proxy bid though, because it would allow people to figure out the real high bid).
Also, it is good practice to make it as easy to do a refund as it is to sign up.
I know ebay does proxy bidding, I've bought plenty of stuff on ebay, but I pay after winning the bid. My obligation to pay starts with the bid, but I'm not required to pay until winning the auction, my card is not charged until after the auction closes.
The scenario to go through is the one where a new user of your system buys enough credits to pay for the item that he/she is interested in. Only to find after going through all that that the amount is not high enough and that you need to buy still more credits (but not how many) in order to place a successful bid. You can't really do that imho, it feels like you're being taken for a ride.
That request for a refund should be in your inbox.