There has been a class action lawsuit against Quibids. It has been a couple of months now, and I must admit I didn't know about this. The person Lawrence A Locke is the plaintiff. The law firm Beckham and Mandel have filed the lawsuit. The news can be found on an article on Businesswire.
I have read the complete lawsuit, and it seems to be aimed more at the penny auction industry and business model in general rather than at Quibids per se. Of course, the person seems unhappy with Quibids but the lawsuit describes the penny auction industry in general. I don't see anything substantive against Quibids as such.
So don't worry about is Quibids legit or is Quibids scam because if it is, at least according to this lawsuit, the entire penny auction industry is.
So what are the points raised here? Here is a very brief summary of the main objections raised -
1. Quibids makes a lot of profit.
He gives the example of the Honda Civic auction. Ironically, I had discussed it in detail in my blog. Was Mr. Locke reading my blog? ;)
2. It is akin to gambling.
3. The Buy It Now prices are inflated.
4. Low and incalculable odds of winning.
5. Quibids doesn't disclose that a majority of people lose money on the site.
6. The initial few bids on high-ticket items are pointless (- a classical mathematical fallacy arising from a lack of understanding of the penny auction model. You need someone to place those bids. If no one places them, the first 1 cent bidder is the winner :) )
You can read the entire class action lawsuit here
It would be great to know your thoughts on this. What do you think about this lawsuit?