Whether you are a consumer who is searching to obtain electronics, gift cards and others items online at a discount, or someone of influence who is interested in protecting consumers please really read over what I’m about to share with you.
For nearly 3 years now Penny Auction Watch has been reporting on scam penny auction sites and their use of illegal bot bidding scripts, false advertising, manual shill bidding a number of other shady operations that are being undertaken by “penny auction entrepreneurs,” and provided a platform for consumers who are not receiving purchased goods to have a voice.
I started this site in 2009 because, I, as an unsuspecting consumer, new to penny auctions thought I could actually have a chance of obtaining a deal on a penny auction site only to become scammed by a shady business and their automated bot bidding scripted bidders that bid against me. At the time I did not see the government or any regulatory agencies doing anything or even looking into penny auctions even after I had proof of many sites blatantly stealing. In fact, the media was barely paying attention, those were the early days of penny auctions.
Things have started to change for the better, and now the FTC just a few months ago issued a consumer advisory. Both Washington State and Georgia took action against penny auctions: PennyBiddr & Wavee. The BBB has blogged about and issued warnings, and many reporters have talked about and are telling consumers to err on the side of caution when it comes to online penny auctions.
Over the years there have been even more penny auctions that came online, many of which were (some of which still are) outright, shamelessly scamming consumers not only in the US, the UK and a number of other countries including Ireland, Australia and New Zealand.
Now let’s take a look at the penny auction business located at ArrowOutlet.com
In 2010 we posted the following in regards to the penny auction site ArrowOutlet.com – Bidazzl Launches as ArrowOutlet.com Possible Bots Alleged July 9, 2010:
“It does seem as if they have more bidders than they have traffic:
There are 1,623,263 sites with a better three-month global Alexa traffic rank than Arrowoutlet.com, and almost all visitors to the site come from the United States, where it has attained a traffic rank of 170,771. The site’s visitors view an average of 2.1 unique pages per day.
The bidder’s on ArrowOutlet.com really seem, in our opinion to be alleged bots (shill bidders/programmed), with names like:
- mrsmcalmond, ofancientz, iambig, aburiddo, honeybea, 365daysbabi, wallgrommit, drunkentiger, fatdude, obnox, elquacko, goldenspie, modestmike, rickyidols among many others.”
We were just informed that a group of 5th year Mathematics PhD students at University of California, San Diego, as a part of a project in statistically modeling human decisions, they studied the penny auctions at the penny auction site ArrowOutlet.com. Over the course of two months, November and December of 2011, the students monitored the behavior of every user and they also recorded the bidding history of every auction. They tell us that their computers worked over 2,000 hours and analyzed over 500 megabytes of data.
Now here’s the kicker…
After two months of analyzing the penny auctions on ArrowOutlet, what did they find?
“Sadly, this work can not be used to model human game theory because the majority of users at ArrowOutlet.com are in fact robots.”
They present their findings on the website ArrowOutletInfo.com.
“We have decided to make this data public and anyone who would like to use this information can. In November and December 2011, the majority of bids at ArrowOutlet.com were placed by robots and the majority of auctions were won by robots. As a result, 95% of all humans who participated at ArrowOutlet.com in November or December 2011 lost money overall. In these 2 months, human net loss totaled over $260,000.00.”
|November and December 2011 statistics at ArrowOutlet.com[separate months]|
|–||Total||Robots||Humans||Links to data|
|Users||4,802||3,034||1,768||[How we detected Robots]|
|Bids Placed||7,694,632||6,007,039||1,687,593||[All Bid Histograms]|
|Auctions Won||33,978||23,595||10,383||[All Completed Auctions]|
|Money Lost||–||–||$262,071.30||[Individual Net Earnings]|
|–||[Who are these robots?]|
Did you see that? These students allege that human net loss to the penny auction site has totaled over two hundred sixty thousand dollars!
The UCSD students state on their ArrowOutletInfo.com website that in November 2011 alone “ArrowOutlet won 11,529 of their own 16,797 auctions and manipulated the other 5,268. 3,034 users are alleged, based on their findings, to be robots. The robots caused 905 legitimate users to lose a combined $122,501.22 in one month.
I just checked out ArrowOutlet.com and just right now (it’s nearly 1 AM EST) there are 18 items all ending, and being bid on simultaneously, with less than 40 seconds left on the clock. Out of these 18 items there are 2 Apple iMacs, 1 MacBook, 2 laptops (1 Asus, 1 Alienware) 2 iPads, a treadmill valued at $600, and an iPod Touch. All of these items would be considered high-ticket items. Many penny auction sites have not been able to offer so many high ticket items and still sustain themselves. So many penny auctions have shut down, just yesterday a site told us that they were shutting down because they didn’t have enough money to continue operating.
The UCSD PhD students have presented their ArrowOutlet.com findings in depth, complete with a history of all completed auctions, all bid histograms, how they detected robots, and what they claim is the site’s net earning.
In the process of their research, to ensure timing accuracy (server lag, and what the clock shows isn’t 100% what the server is recording) the PhD students did even rented a server in the same location as ArrowOutlet.com and they sent the site requests to be able to sync their time with that of ArrowOutlet‘s.
Read the page on how robot bidding was detected on ArrowOutlet.com – In short, but really take a look at the page and histogram:
“The key to distinguishing robots from humans at ArrowOutlet.com, is looking at each user’s Bid Histogram. A Bid Histogram is like a person’s fingerprint. Each histogram should be unique. At ArrowOutlet.com, 3,000 users have the same Histogram. And, this common Histogram is actually impossible for a human to achieve using the webpage’s Bid Now button or Bid-O-Matic.”
What exactly do their bid histograms show? The bid histograms outline that, “so many users bid when precisely an integer amount of actual seconds remain and never in between! For example, they bid when 4.00 actual seconds remain but never when 3.88, 4.25, or 4.9 actual seconds remain!! These histograms are impossible for a user to obtain using the clock and Bid Now button on ArrowOutlet’s webpage (as explained above). Also, it is impossible for all these users to consistently bid when exactly zero actual seconds remain and never when 0.01, 0.25, or 0.66 seconds remain. Bidders 1, 3, 4, 6, 7, 9, 10, 13, 15, and 16 are robots. Bidders 2, 5, 8, 11, 12, and 14 are humans.”
Now take a look at these histograms:
“Since 100% of the bids from Bidders 1, 3, 4, 6, 7, 9, 10, 13, 15, and 16 are placed with exactly integer actual seconds remaining and 75% of their bids are placed with less than 5 seconds remaining (at integers 0, 1, 2, 3 and 4), this implies they are not using ArrowOutlet’s only 2 methods to bid, the Bid-O-Matic or the Bid Now button. Also, amazingly, 25% of their bids reach ArrowOutlet’s server when precisely 0.00 actual seconds remain. There are 3,000 bidders exhibiting this same strange and amazing behavior. These bidders are robots and not humans.”
See a pattern yet?
Based on the histograms being used to determine who is a robot and who is potentially a real human bidder the PhD students allege that in November, “94% of humans lost money overall totaling $131,840.26 and 6% of humans won money overall totaling $9,339.04” and December, “95% of humans lost money overall totaling $148,111.73 and 5% of humans won money overall totaling $8,541.65.”
In my opinion, what has been gone to great lengths to obtain and document, is an excellent example yet again confirming what many of us who have participated in and have followed the penny auction industry have found by other means on other penny auction sites, via talking to defunct site owners, observing and communicating with script developers, finding many false testimonials, and by becoming victims by firsthand experience – we know that there are some penny auctions that are scamming consumers.
Again, be sure to check out ArrowOutletInfo.com for more on these findings and documentation. They are inviting anyone with questions to e-mail them [arrowoutletinfo at gmail.com]. Also feel free to double check their work.
So tell me, will anyone take notice now?
For more shameless penny auction shenanigans visit our
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