Alleged Scam: SwipeBids and SwipeAuctions Tied to Acai Marketer Jesse Willms
In 2010 consumers complained about penny auctions charging $159 for free bids. In 2011 the FTC named the sites in a $450 million case.
Penny auctions were the 2010 version of a casino you could open in a weekend. You buy bids, every bid raises the price by a penny, and somebody "wins" an iPad for $23 while everyone else loses what they spent bidding. SwipeBids and SwipeAuctions added a twist that consumers started complaining about in the fall of 2010.
What consumers said
On complaint boards, people described signing up for free bonus bids and finding an undisclosed charge of about $159, plus a recurring fee of about $11.95. They described a mail-in refund process with waits that kept getting longer. Several linked the sites to Jesse Willms, a young Canadian marketer already known in affiliate circles for acai and teeth-whitening "free trials." Those were consumer allegations at the time.
What the government said
In May 2011 the FTC sued Willms, an associate and about ten companies in federal court in Seattle, alleging they took more than $450 million from consumers through "free" trial offers for acai, teeth whiteners, supposed cancer cures, credit reports and penny auctions. The FTC's release named SwipeBids.com, SwipeAuctions.com and Selloffauctions.com. It alleged free bonus bids that triggered a $150 charge and $11.95 a month, and misleading statements to banks to keep card processing alive despite chargebacks.
In February 2012 Willms settled. The judgment was $359 million, suspended once he surrendered his assets, and he accepted a permanent ban on negative-option marketing, without admitting liability.
How it aged
The Atlantic profiled him in its January 2014 issue under a headline calling him the dark lord of the internet. The model he was accused of running, a free offer funding a recurring charge, sold through affiliates who were paid by the sign-up, is exactly what Congress had outlawed in ROSCA two months after this post ran.
This page rebuilds an October 2010 IndustryPace post whose original text is not available. Facts come from the FTC's 2011 complaint and press release, the 2012 settlement as reported by CT Watchdog, and consumer complaints on ComplaintsBoard, which are allegations. The settlement included no admission of liability. The author co-founded LeadsCon and has worked in lead generation for about 20 years.