Daily Archives: June 16, 2011

Penny Auction site faces class action lawsuit

Earlier this year, Casino Watch Focus reported on the dangers of a new type of gambling known as Penny Auctions. These sites have consumers bid on high dollar items until time runs out and the person who placed the last bid wins.  It sounds like a normal eBay-type auction except there’s a catch, a very costly and potentially dangerous catch.  Each bid placed costs money, typically between 50 cents and two dollars depending on the site.  So unlike eBay where the losers of the auction simply lose out on the product, each and every person who places a bid is at risk of losing their money. The psychology of Penny Auctions functions the same as the lottery or slot machines, put in a little in hopes of winning a lot.  People will also chase after an auction because they have invested money and don’t want to lose it, just like they do with slot machines or with a poker hand.  Penny Auctions are simply gambling at the core and the consequences can be just as addictive and devastating.  Now, an online source is reporting that a class action lawsuit has been filed against one of these penny auction websites:

QuiBids.com claims that users of their website will pay 80-95% less than retail prices for consumer products the likes of HDTVs, laptops, automobiles, you name it.  Of course there is a catch. A class action lawsuit filed in the U.S. District Court for the Western District of Oklahoma claims that virtually none of the consumers who participate in these “auctions” will win the right to purchase such high-end item products at those greatly reduced prices.  In such cases, the consumers lose whatever money they bid during the auction.  The suit alleges that the failure to win auctions is costly to QuiBids customers. Some have even suggested that the QuiBids.com website is nothing more than legalized online gambling.

“In reality, they are just taking people’s money and giving them nothing in return,” Roger Mandel, attorney for the Class, said. “If they want to operate their business like a lottery, then they need to tell people the truth about their chances of winning — which are slim to none,” said Mandel.

Time will tell if this lawsuit has any affect, but if history is any indication in cases like these, its doubtful the courts will step in.  Hopefully, this case will at least raise much needed awareness on the dangers.  Please share this information (see below) with those you know and especially those who mention they participate on these sites. You may help prevent a gambling addiction that can tear a life or family apart.  For more information on the dangers of gambling, please visit CASINO WATCH, & CASINO WATCH FOUNDATION