Is Swoopo A Scam?

[CA3LE]

I found this pretty interesting how these guys are making money. It's basically gambling....

This is a website I saw in an ad on my own website.. I checked it out and wasn't too sure about it so I did some research, this is what I found on Swoopo 'Auctions'

Found on Yahoo! Answers:

Yes and no.

Swoopo is a scam in the sense that it is an online gambling site posing as an auction site.

However, Swoopo is not a scam in the sense that they will steal your money, they have a legitimate (although misleading) model. Just don't be fooled into thinking that the site has anything to do with auctions.

They use terms like bids and auctions when in reality, they are an online gambling site where the game is a bit like a cross between a raffle (lottery) and a game of chicken, the the prize is some item you receive (if you win) at an extreme discount.

Leaving aside all this "auction" talk (who are they kidding?) the game works like this. Each game has a prize, and a clock that counts downward to zero. Think of it like this. Everyone who wants to play the game (or the bidders, if you will) is, in a virtual sense, putting dollar bills in a stack, since each "chance" (or "bid" although that term is misleading) costs $1. (50 pence for the UK Swoopo)

When the clock reaches zero, whoever put the last $1 on the stack wins the item, but each time a dollar is placed on the stack, 15 seconds is added to the clock. It's easy to see this game makes a lot of money for the house, or Swoopo. Each bid is like a raffle ticket. You are paying $1 for the small chance that no one else will put $1 on top of it before time expires. Keep in mind the players, or "bidders," can use an automated bidder called bid butler. When multiple people use these, they can instantly bid back and forth dozens or hundreds of times, adding minutes or hours to the clock. Swoopo tells that this is a "strategy" and sad thing is that people seem to be buying it!

You might be asking, "Why is there a price if this isn't an auction?" The funny part is that for a lot of the "auctions" there is no price! These auctions have fixed prices, (the "100% off" have a fixed price of $0.00), and you can see from these that the price displayed is, more or less, just a counter for how much Swoopo is pocketing! Take for example a high end digital camera with a fixed price of $79 plus $12 for shipping. The "price" on this "auction", which I am looking at now as it is still active, is $828. This number is completely irrelevant unless you are interested in how much Swoopo is making. Since that number increased one "bid" at a time by $0.15 and each of those "bids" costs someone a dollar, that means there have been over 5500 bids! $5500 in Swoopo's pocket and the game is still going! You can see how it is no problem for them to send the lucky winner a $1500 digital camera for less than $100 when they made so much money from the game.

Some of the games are not fixed price, and so the winner of the game wins the item but has to pay $0.15 for each "bid" that was placed. On these games there is, I guess, (and I am being generous here), some semblance of strategy, since each subsequent bid is worth a little less. For example, the first bid on a $300 XBOX 360 is a chance to get a $300 item for $0.15, but the 100th bid is a chance to get a $300 item for $15.00, which is worth a little less. I guess the strategy is to wait until the price is high enough to weed out a lot of players and thereby increase your chances, but PLEASE keep in mind you chances are still SLIM!

In conclusion, I would call Swoopo a scam, but that is just my definition. It is what it is. It preys on human weakness, and lots of them.

1. Desire to get a good deal. (At first glance you are buying something at an incredible price, right???!!!) You can see this is their main hook as all of their ad material is just history of past games showing how some lucky fool snagged a Wii for $20 or an HDTV for $200.

2. Throw good money after bad. (You bought 20 chances, and someone kept jumping in with 5 seconds left! I don't want to have wasted $20, so I'll get $20 more in chances and keep trying!)

3. Gambling is fun. (No real need to elaborate here)

[zalternate]

Interesting. It may trigger an addiction to some people who think that they may get a deal for pennies on the dollar, when they actually don't, due to having to buy auction credits.

http://en.wikipedia.org/wiki/Swoopo

The money collected by Swoopo consists of the cost of bids placed and the final auction amount. As an example, a MacBook Pro with a suggested retail price of $1,799 was sold on Swoopo for $35.86. However, a total of 3,585 bids were placed, so the total price to Swoopo customers was $2,151.

A better explanation of the system.

Swoopo model of online auction does generate huge profits. For example an Apple iPhone 32GB purchased through Penny Auction for any value more than £12 clearly indicates that they are selling well above the commercial price. To purchase at £12 the number of bids placed in a Penny Auction is 1200 and at £0.50 it will be £600 which is very much more than the market value.

the bidder bought the bids for $0.60 each, .......

Bid-credits cost $0.60 apiece and are sold in lots (called BidPacks) of 40, 75, 150, 400, and 1000. Each credit is good for one bid.......

[WebUser]

When the clock reaches zero, whoever put the last $1 on the stack wins the item, but each time a dollar is placed on the stack, 15 seconds is added to the clock.

Sounds like Beezid.com

[zalternate]

So I saw another ad on this site that was like Swoopo. Interesting how people are coerced into entering their credit card information for something that is charging extra stuff onto their card. Read the details of what you are actually buying.

But apparently they are on Ebay(as an ad at the bottom, I guess) and people click the link thinking that they can just enter their information and buy a product with no strings attached.

Seems to be spreading like a plague with various names on the Internet.

A whole pile of information via user replies.

http://www.pennyauctionwatch.com/2010/03/is-swipebids-a-scam/

http://answers.yahoo.com/question/index?qid=20100301221226AAa2Al2

A complaint about swipebids.com

http://www.scam.com/showthread.php?t=126480

here is a quote on how people are being duped by their own ways.

I was on Ebay looking for a computer. There was one at the bottom of Ebays list and I clicked on it which took me to the Bells n Whistles and clocks counting down called Swipebids.com with a whole bunch of computers to bid on BLARING IN MY FACE. I put in my credit card information which is normal if you want to bid like on Ebay but thats not the way this site works..................

They have to the left of the credit card info ALREADY CHECKED A PACKAGE OF BIDS FOR $150 THAT IF YOU PUT IN YOUR CREDIT CARD INFORMATION YOU AUTOMATICALLY HAVE BOUGHT AND PAID FOR 450 BIDS (LAS VEGAS STYLE) WITHOUT REALIZING IT. NOW YOU MUST USE THESE - WHICH IS A JOKE IN AND OF ITSELF. When I realized that it was a mistake, I immediately called them and said that I thought I was on Ebay and didn't want to bid on this site with all the bells, whistles, clocks going up and down, and I wanted to cancel this and zero out this mistake. Jackie cancelled my membership and said she zeroed out the money, which was a lie. She zeroed out the membership but they billed my Bank for $150 the next day march 12, 2010. I called back and Jackie said she couldn't give me any money back. That it would upset the bidding. March 13, 2010, I called the billing dept and they gave me the same answer. She said that they already cancelled my membership and I don't get any money back. SHE WAS SORRY BUT SAID YOU SHOULD HAVE NOTICED THAT WE ALREADY HAD THE $150 PACKAGE CHECKED FOR YOUR CONVENIENCE AS THAT IS THE MOST ORDERED PACKAGE. I explained that I didn't check any package but was just trying to order a computer, the answer was still - OH WELL. IS THERE ANYTHING ELSE I CAN DO FOR YOU MISS WOODY? YES, YOU CAN REFUND MY MONEY NOW FOR THE 4TH TIME THAT I'VE ASKED.................

I had the same thing happen to me. I hit the button once, it turned my card down. I had the proper "1 dollar for 10" button clicked. I had to fill the info out again and didn't realize that it defaulted back to the $150. I am just calling my bank. They'll remove it. I wouldn't worry about it, they'll remove it for you. The stupid bitch on the chat function is nothing but a scam artist as well.