Is Swipeauctions a scam?

by El Plumber (admin) on August 23, 2010

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.

Auctionnews Is Swipeauctions a scam?

None of these quotes are about Swipebids

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

AuctionVideo Is Swipeauctions a scam?

The video has nothing to do with Swipebids

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.

UPDATE #2: As of September 19th, 2010, Swipebids has changed its name to SwipeAuctions AND no longer has ANY indication you will be charged $159 on the area where you put in your credit card info.

swipeauctions31 Is Swipeauctions a scam?

Swipeauctions Is Swipeauctions a scam?

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.

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{ 6 comments… read them below or add one }

Jennifer August 27, 2010 at 1:24 pm

Good Afternoon,

My name is Jennifer, Head of Customer Service for Swipebids. I assure you our website is not a scam and is entirely legit, please visit the information below for confirmation.

The registration page where your credit card information is inputted into our system, has 4 locations where we notify customers of our $159 Membership fee. Provided in the link below, you will see 1 right above where your information is inputted, 2 are off to the left and the last is right above the “Start Bidding” button, which will finalize your registration.
https://www.swipebids.com/registration_pg2.php

We show on our website quite a few pages of past winners, included we show the price it was sold at, retail price and you can even confirm the tracking numbers by clicking on the number itself. We have also given away numerous cars to bidders within the United States and Australia which can be verified at the link below
http://www.swipebids.com/all_past_winning_auction.php

We also sponsor numerous children through World Vision, the link below will take you to the site where we describe how it all works and how we started by sponsoring 100 children and we continue to add 1 more each day in our effort to make a positive change.
http://www.swipebids.com/world_vision_charity.php

If you have any other questions or concerns please do not hesitate to contact me personally at jennifer@swipebids.com

Regards,

Jennifer
Head of Customer Service

Our Winners: http://www.swipebids.com/all_past_winning_auction.php
Our World Vision Charity: http://www.swipebids.com/world_vision_charity.php
Our Customer Service Page: http://www.swipebids.com/contact.php

El Plumber (admin) September 18, 2010 at 9:20 pm

Hi Jennifer.
Your registration page seems to have changed dramatically and no longer informs people they will be charged $159 when they enter their credit card. What happened? Also, when you say your website is not a scam and is entirely legit, what do you mean? Can you let us know what percentage of people save money on real items (not bid packs) over and above the $159 you charge them?

Also, what’s your last name?

Jennifer September 20, 2010 at 12:40 pm

Good Morning El Plumber,

I am sorry but to help with any concerns I will need you to contact me personally at jennifer@swipeauctions.com as our emails are monitored and filed if needed for reference at a later date. As well please visit the link below as it is the new screen shot of our final registration page, at the bottom our membership fee is noted in 4 locations right next to where you input your information.
http://dl.dropbox.com/u/1647255/chcekout.jpg

I look forward to hearing from you.
Regards,

Jennifer
Head of Customer Service
Our Winners: http://www.swipeauctions.com/all_past_winning_auction.php
Our World Vision Charity: http://www.swipeauctions.com/world_vision_charity.php
Our Customer Service Page: http://www.swipeauctions.com/contact.php

El Plumber (admin) September 20, 2010 at 5:23 pm

Hi Jennifer,
Do you feel that your registration page meets the FTC requirements for full disclosures of charges? I’m looking at it right now and in my opinion I would not think you were going to charge me $159 after I click the “Start Bidding!” button. While I’m not a rocket scientist, I am an average consumer. You do state $159 a few times elsewhere on the page, but not that I’m going to be charged it right now. In my opinion to comply with the FTC, you need to put a clear disclosure that “By clicking Start Bidding your Credit Card will be charged $159″ right under the button or right next to the button.

Have you received any customer complaints that they didn’t know you were going to charge them $159 and asking for their money back?

After your last comment, you did have a great and properly placed disclaimer regarding charges right under the button. Why did it get removed? And why the name change from Swipebids to Swipeauctions?

For your info, here is the FTC info on required disclosure:
http://www.ftc.gov/bcp/edu/pubs/business/ecommerce/bus41.pdf

And here is the section that in my opinion pertains to your registration page:

B. The Clear and Conspicuous Requirement
Disclosures that are required to prevent deception or to provide consumers material information about a transaction must be presented clearly and conspicuously. Whether a disclosure meets this standard is measured by its performance that is, how consumers actually perceive and understand the disclosure within the context of the entire ad. The key is the overall net impression of the ad that is, whether the claims consumers take from the ad are truthful and substantiated.
In reviewing their online ads, advertisers should adopt the perspective of a reasonable consumer. They also should assume that consumers don’t read an entire Web site, just as they don’t read every word on a printed page. PI In addition, it is important for advertisers to draw attention to the disclosure. Making the disclosure available some- where in the ad so that consumers who are looking for the information might find it doesn’t meet the clear and conspicuous standard.
Even though consumers have control over what and how much information they view on Web sites, they may not be looking for or expecting to find disclosures. Advertisers are responsible for ensuring that their messages are truthful and not deceptive. Accordingly, disclosures must be communicated effectively so that consumers are likely to notice and understand them.

Anthony October 15, 2010 at 3:14 am

Hi,

I think this is a fair analysis on whether penny auctions are a scam. The blog owner also includes some legal views that penny auctions are not a Scam and absolutely not a Bargain.
These Auctions make lots of money applying gambling psychology and marketing.

Zheng November 18, 2010 at 9:41 pm

Is SellOffAuctions.com the new version of Swipebids / Swipeauctions? Looks very similar!

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