Wednesday 10 December 2008

ChristmasShopping; Swoopo Scam-tastic

Came home to find Mrs CU frantically 'bidding' on a shopping website for Xmas pressies. On closer inspection this is a genius mathematical scam; who says degrees are not worth every penny.

Basically, you buy 'bids' for 50p from Swoopo, then bid on items like Wii's for say £20. The bid only ends when no one else bids, otherwise more time is added to the 'countdown' clock. In theory you can thus win an item for a 40p bid. Also, every time someone bids the price of the item increases by 8p.

The genius is that every bid makes Swoopo 57p and because of the way the bidding works, it is often the case that they get thousands of bids per item and still sell the item at a discount to retail - but pocketing £1000's for each bid.

I can't see they do anything illegal, except have designed a rigged game that dupes people into thinking they can 'win' cheap goods when in reality there is little or no chance. They don't let you see how many people are bidding to make any kind of informed judgement, So Caveat Emptor here. My other thought is that this is clearly a gambling website and I do hope they pay the gambling taxes and operate under the gaming act like other online gaming companies - they market themselves as entertainment.

Great scam though, wish I'd thought of it!


Anonymous said...

I've been looking at this since reading the blog entry, working out the maths to see if there's anything worthwhile here. I don't understand the 57p thing. As far as I can tell it costs 40p to place a bid, and the item price increases by 8p. So that should be 48p. Or do they have other charges they put in?

CityUnslicker said...

anon - they change the price of buying bids all the time. I think you are currently right at 40p.

it is an interantional scam though, so they accept all currencies and seem to sell in all (nice bit of arbitrage for them!)

Even at 48p per bid, they are making out like bandits!

Steven_L said...

They are based in the same building as ebay by the looks of things CU.

If I'm right I think ebay would be upset at you calling their latest wheeze a scam.

Mind you f you google 'swoopo scam' lots of people seem to agree with you.

In terms of consumer protection law I can't see anything wrong with it - providing of course it's not rigged in any way (but how would anyone ever know if it was?)

I don't really know anything about gambling laws, but if it is ebay I'm sure they'll have their laywers ready to tell you gambling it aint.

Interestingly this would have been illegal prior to May 26th in the UK under the Mock Auctions Act 1961.

"Subject to the following provisions of this section, for the purposes of this Act a sale of goods by way of competitive bidding shall be taken to be a mock auction if, but only if, during the course of the sale ... the right to bid for any lot to which this Act applies is restricted, or is stated to be restricted, to persons who have bought or agreed to buy one or more articles"

This was repealed when we harmonised fair trading laws in the EU.

Now, as long as what they are doing is not 'misleading' they are in the clear. I don't think it is misleading, providing as I say it isn't rigged.

Well spotted ebay, the worlds first global online mock auction!

Anonymous said...

Came across this site back in the Spring and my friends and I concluded it was a genius way of minting money and we all wished it was our idea!

They were back then. (That domain forwards to swoopo now)

That ipod classic 120G on the front page that ended on £63.12 attracted 789 8p bids. These however cost 40p to buy so they have raked in (£0.40 * 789) + £63.12 = £378.72 !!!

Anonymous said...

Just to clarify my post above.

Reading some more I am reminded there are multiple types of auction.

In the one above the winner must pay the bid price i.e. £63.12 on top of what they paid in bids.

In other auction types the winning price could be fixed at a certain level for instance £0. In this case you only pay for bids and could theoretically win an item for 40p regardless of what it was bid up to.

James Schneider said...

Thieves. They appear to be gaining pecuniary advantage by deception.

Anonymous said...

This is so easy for them to rig! How can every single time the auctions comming to an end on every single item go back to 15 seconds!
look I have checked over and over. There is NO WAY this is not a scam.
Also, I actually signed up, They will not let me go! I have to write a letter and send it by snail mail to get out! There is no way to quit online!

I have written to pay pal to ask about this, I am well informed of pay pal rules and if no product arrives - you can file a charge back. I have not got my answer from pay pal yet.

Unknown said...

I just stumbled on to a swoopo-like page has any of you been there or know something about it?

Unknown said...

What as far as I can see has been missed by most of the comments here is that there are a core of Swoopo users who we could term "PowerSellers" (i.e. they may be re-selling their won products on ebay) who are prepared to stake sums way above the average punters with pre set "Bid Butler" bids.

Yesterday 29/01/09 users adfero and MadViking each won a couple of cameras, MadViking spent, if he/she is in UK, £535.40 on bids to get these wins. A quick google reveals not MadVikings first winnings

if you check you will see in the conclusion there that in the period these statistics were gathered, 545 cameras from swoopo went to 336 people, and from these just 27 winners got 154 of cameras

here is a provisional list of other "Power" users found by me and other people all of whom I think show up in google searches, you'll notice they hardly ever do anything other than "Bid Butler" bids

Corburn, MadViking, adfero, Czesi, Vroos, 2l8m1, Skyway7777, Norden47, Mike8523, Lumix999, CaCO3, Springmist, schnups07, Achlph (6), Big100 (6), Biggibig (6), Corsanico (6), Dartfan180 (6), Erikbloodaxe (6), F4646 (7), Fellcroft (7), Flash Fire (10), Garnier (9), Heysuz (6), HH0812 (7), holzfaeller (6), Imhavingthis (6), Komander01 (7), Madviking (8), Moocky21030 (12), PitBull 01 (6), Rocket400 (6), Schlumpf6 (7), Jeanne (6), Taylererni (11), Teufel2010 (7), Thoma221267 (6), Toertchen (7), Volodja (7), wurmi2 (7), Xopex (6), Medienhexe, Mediadisplay, Jehola, 2000bis2099, audt, Nakose, Kiam2008, Vlaush, Onkelheli, Darabber, Bluemchen15, zibel72, Rzarda, Vamacho2007, heitsch123, Sterntaler26, rumpel79, deLuxe10, Theduell, Ty8011, 1975stefan, Anbundy12, Katze1960, Schlumpf01, Omamachma, lyle, Bieter1225, Pflegestufe3, Helgolando, Bossxxl usw

a couple deserve special mention, this user repeatedly changes name and or has multiple accounts - variously Omamackma, OBAMA,
Omamachma, ElSc48 as can be seen by comparing swoopo's record of a winning here with google's cache example

this user nathan1994 has been seen to use unreal enormous numbers of Free Bids

Clearly the average swoopo user is not aware that they are betting/bidding in many swoopo auctions against a group of determined deep-pocketed professionals. The Swoopo website provides no way to look up the history of users as of course ebay does, though one assumes swoopo can access this information.

It clearly states in Swoopo's terms and conditions here that "Swoopo’s products and services are offered exclusively to private users and not to commercial or partly-commercial resellers." but clearly they are doing nothing to make this come true after all they are making more money from the amateur punters as a result of the presence of these pros.

Of course some might speculate that these "Power" users are in reality the "house" (Swoopo) bidding up prices (and buying some goods back in). Its possible these "Power" users may not be turning a profit as individuals since its very hard to estimate their spending on auctions they didn't win and if this was/is the case one would assume its an "inside" job.

Since swoopo has been running longer in Germany more research into Swoopo activity is recorded, there is a particular issue in Germany of whether German "Power" users are declaring their profits for tax - check here

For anybody who still fancies their chances on Swoopo I strongly suggest you google the people you are bidding against, especially "Bid Butler" users


there are some cases where particular auctions are conducted with different products showing on their us/uk/es/de/at sites e.g. and so one is bidding against other users but not for the same thing/value product

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