We’ve been assaulted lately for ads for “penny auctions” from all sides. Seems like a new penny auction site is popping up every five minutes and some of them are being *VERY* heavily advertised on every website imaginable.
Like the Home Income kits and Acai Berry free trial offers, penny auctions are the latest high paying affiliate craze. While there do seem to be some legit penny auction sites, there seem to be just as many fishy sites appearing all over the place.
Put aside for a minute that all “penny auction” sites are in my opinion basically thinly veiled gambling. They’ve gotten away with it so far, but the recent explosion in the numbers of these sites is going to cause the FTC to sit up and take notice.
Gambling issue notwithstanding, some of these penny auction sites seem better than others. Swoopo for example, is one of the original entertainment auction sites, and provide an option to buy the item you’ve bid on at retail price MINUS the cost of any bids you made. So if you spend $50 on bids at Swoopo for an iPod, then don’t win it, you can still buy it for $150 ($200 cost minus your losing bids). If you’re planning on buying the item anyway, the worst you can really do on Swoopo is pay full retail price for the item, even if you lose. Swipebids makes no offer that I could find as of this writing to put all your losing bid costs towards the price of the item. Maybe they’ll do so in the future.
Another auction site, CactusBids, has gone so far as to hire Earnst & Young auditors to audit their auctions to ensure they are fair. That and they have an A rating with the BBB.
How does Swipeauctions stand up? Let’s take a look. Remember, this is all our opinion, hard facts about Swipeauctions are hard to come by, but let’s take a look at the details of the site and how it’s advertised and you can come to your own conclusions.
SwipeAuctions is a Legitimate Business
By all business accounts, SwipeAuctions is legit. They are a registered business in Alberta, Canada and currently have a B- rating with the local BBB office there. There have been complaints, but every usiness gets complaints. According to the BBB they appear to resolve the vast majority of those complaints. So good news there.
So Swipebids is not a scam from a business perspective, but is it a good value? Read on.
SwipeAuctions In The News? Not Really.
The registration page for SwipeAuctions has a bunch of logos for legitimate news sites plastered all over it. Yet none of them have ever reported favorably on Swipeauctions that we are aware of. In fact, all the news logo’s say something like “Penny Auctions in the news” in fine fine print near them, and at the very bottom of the page, well below where anyone would ever scroll down to, there is this little gem: “Swipeauctions is not associated with any of the logos used on the website, however penny auctions have been featured on all of these newscasts.”
Videos on their registration page have nothing to do with Swipeauctions
There are a couple of images and videos on the page that are intended to get you to think there are news stories about Swipeauctions and saving on overstock or closeout items in the news. Look closer for the tiny disclaimers under the video’s stating that they are generic videos for auctions and they have nothing to do with them? Huh? Why put them there? Oh, that’s right, maybe to make the average consumer think they are getting some sort of special deal when in fact you’re going to be hit up for $159. That’s right, $159.
Is Swipeauctions tricking people into a $159 charge?
None of the things I pointed out are really outside the norm for Internet advertising. Misleading sure, but not illegal I don’t think. It certainly doesn’t make me personally want to buy their products.
However, at the time of this writing, their registration page makes you think you are giving them your credit card in the same way eBay asks for your credit card, to validate your account and there is no information about being charged near the button to register.
WOAH! Stop right there! Look at the fine print to the left of the credit card box. Now look again. Yes, it doesn’t explicitly say anywhere that you are paying them $159, but that’s exactly what they’re going to charge your credit card. They put some notes off to the side above some big pictures saying things like “Only $159 gives you access to the following:” and the like. Will an average consumer think they are buying $159 worth of bids with their credit card number?
In my opinion this does NOT meet the FTC requirements for clear disclosure of charges. Will the average consumer know what they are getting into and willingly fork over $159? Probably not. What happens is that most people decide it was their own fault and try to “win” back their money by bidding on items, thereby basically giving Swipeauctions all the ammo their need if they ever try to dispute the charges.
UPDATE: As of August 23nd, it appears that they have placed some small black text right under the “Start Bidding” button that says “By clicking below you will be charged $159 and receive 300 bids.” that was not there before. So kudos to Swipeauctions for that at least.
Crap! I feel like I was suckered by Swipeauctions! What do I do now?
The Terms you’ll find buried on the Swipeauctions site say that they offer a “money back guarantee”, but only if you actively participate in auctions, use all the bids that you didn’t know you were even buying for $159, and don’t actually win ANYTHING. Nothing at all. Many people get sucked in and end up winning a $10 Walmart card or better yet they “win” more bids and thus don’t qualify for the so called money back deal.
If you signed up knowing you were paying $159 and realize now that you’re unlikely to save enough on items to justify you $159 investment, make sure you do not bid on anything small ticket items you are likely to win but would never be worth the $159 you paid (the $10 or $25 gift cards, or ANY Bid packs) use up all your 300 bids on items that you would save more than $160 on and try to get a legitimate refund after you have used them all up.
In our opinion, SwipeAuctions does NOT meet the FTC mandate for clear disclosure of charges. If you registered without knowing they were going to charge your credit card you should follow the steps below. Here is what we recommend:
- Don’t feel bad! Seems like hundreds if not thousands of people have been taken in by these sort of landing pages that trick you by not clearly disclosing that your credit card number is actually going to be charged. It happens to the best of us.
- Swipeauctions may not have left out the note about actually getting charged on purpose, but if you didn’t think you would be charged when you signed up because of inadequate disclosure, call them! Call Swipeauctions and explain that you signed up not knowing your credit card would be charged and want a refund. If they won’t, explain that your next steps include disputing the charge with your credit card company and complaints to the BBB and the FTC. Be firm and they might budge.
- If #2 fails above call/write your credit card company, dispute the charges and change your card number. Since this Swipeauctions site at the time this article was written did not meet the FTC requirements for clear disclosure in our opinion for the charges you received, consider the charge to be suspect.
- Start ID theft monitoring right away! Click here to sign up for Experian Protect My Id monitoring. We can’t be sure of Swipeauctions data protection practices at all without further auditing information. I’d suggest signing up for the free month to check your credit report and make sure no one tries to change your address or open a new card using the current cards details you gave away.
- Warn your friends not to get involved! Click Here to Share this on Facebook! Hit “Post to Profile” to warn your friends, or Click Here to ReTweet this article.
- Report Swipeauctions to the BBB by clicking here. It does appear that Swipeauctions does attempt to resolve billing dispute issues raised with the BBB. Complain to them and you might see your issue resolved if you had issues before.
- Report Swipebids to the FTC by clicking here
Note that all of the above was on the Swipeauctions site when this article was written, and we’re not lawyers or Feds, so this is all our opinion. Look at the facts and decide for yourself. If Swipeauctions cleans up their act on any of the areas above, please let us know and we’ll be happy to provide an update.