QuiBids, a bid website that bills itself as an appealing alternative to eBay, is just a gambling site that doesn't tell its customers they have very little chance of winning, according to a recently-filed class action lawsuit.
The suit, filed last week in an Oklahoma federal court, says that, for the "overwhelming majority" of QuiBids customers, "the money they spend to purchase bids and pay for any items which they are lucky enough to win will greatly exceed the retail value of any items they win and purchase.
Under QuiBids's somewhat complicated system, a consumer buys a bid for 60 cents. He can then use that bid to bid on any item available, including "high ticket items such as high-definition televisions, laptop computers ... and even automobiles, according to the suit. By placing a bid on an item, the consumer raises the price of that item by either one or two cents, depending on the auction's format.
According to the plaintiffs, QuiBids says it offers "significant discounts when compared to typical retail outlets and eBay, its main competition. The complaint cites an e-mail promotion in which QuiBids tells of a consumer who won a Honda Civic worth $20,000 for a mere $1,740.78 in a two-cent auction.
Under the QuiBids system, a consumer loses the six cents he spends on a bid whether he ends up winning or losing. And this, the suit says, "illustrates the critical difference between QuiBids and eBay -- losing bidders on eBay do not pay anything."
Thus, the suit concludes, QuiBids is "more like a gambling website than an auction website," since the vast majority of bidders will actually end up losing money.
Over $50 and nothing to show for it
Indeed, lead plaintiff Lawrence Locke, of Oregon, spent $51.11 on 125 bids and ended up losing all six auctions in which he was participating.
The problem, according the plaintiffs, is that QuiBids doesn't tell any of this to its users. While the likelihood of winning a lottery -- or coming out ahead at the slot machine -- is carefully calculated and publicized, "nowhere on QuiBids' site ... does it provide information on what percentage of the money spent by its customers is returned to the customers as merchandise," the suit contends.
And, as the complaint points out, QuiBids ends up profiting handsomely from the system. Under the Civic example cited in the e-mail promotion, each bid raised the price of the car by two cents until it reaches its sale price. Thus, using simple arithmetic, the plaintiffs conclude that "QuiBids grossed $52,233.40 from the bids alone, an amount that dwarfs ... the retail cost of the car."
Locke is seeking to represent a nationwide class consisting of everyone who ended up spending more money on QuiBids -- whether through bids, the site's "Buy it Now" feature, or paying for items actually won -- than the total retail value of the items they were pursuing.
The suit alleges unjust enrichment and violation of several Oklahoma consumer protection laws, and seeks damages and a permanent injunction.
