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Scamville: The Social Gaming Ecosystem of Hell
- vaksel 17y agoI think it's telling about that conference that the scammer company was given a panel spot.
- code_devil 17y agoThe conference was on Virtual Goods Summit, and Offerpal gives you Virtual Currency to buy those goods, so thats the reason she was on the panel. I can see people paying 1 USD to earn 100 Virtual Coins, but they should be made aware that it's a 1 way route. I also think having offers/surveys for users is OK to earn Virtual currency, but as long as it's made clear enough to them that they are getting themselves into a recurring charge of $10.99/mo.
- swolchok 17y agoSpeaking of a 1-way route, I was really confused about Zynga Poker. I was wondering what the value of the currency was, since poker with nothing on the line is no fun. I was not able to determine that it actually had any, so I quit playing after a day or two.
- dannyr 17y agoOfferpal actually hosted the Facebook Developer Garage last year.
- CapitalistCartr 17y agoI play some of those games in Facebook, and while I don't fill out anything that wants me to pay a dime, they do seem to work exactly as he says. And the eagerness with which Zynga, et al copy every other game and then try to out-advertise their way to success comes across as amoral, too.
- deleted 17y ago[deleted]
- WesleyJohnson 17y agoI think calling this a "scam" is a bit strong. Exploitative of people willing to cough up real money and sign up for questionable offers in order to earn completely intangible goods? Sure, but I don't know if that qualifies as a scam. Still, without getting hung up on the verbiage, I agree that it's unfortunate that they're trouncing all over the other developers who won't partake in these tactics.
- JCThoughtscream 17y ago"Exploitative of people willing to cough up real money and sign up for questionable offers in order to earn completely intangible goods? Sure, but I don't know if that qualifies as a scam." HUGE cognitive dissonance between sentences one and two there, man. When the only accurate way to describe something is "exploitative," step back and realize that something's rotten.
- gloob 17y agoFor what it's worth, he didn't say nothing was wrong with it. He just said he doesn't really consider it to be a scam. Similarly, I doubt he would consider it to be murder (even though murder is presumably also wrong). If something isn't quite a scam, it's not a scam. That said, there's definitely room to contest the notion that this isn't one.
- JCThoughtscream 17y agoFair point, though I suppose I've made it clear what side of the definitional fence I'm on for this issue. If looks like a duck, quacks like a duck, and there's hidden hooks in the contract designed specifically to unwittingly lighten a person's metaphorical wallet, it's a duck with a bright, neon "SCAM" sign.
- WesleyJohnson 17y agoExploit: - take advantage of somebody: to take selfish or unfair advantage of a person or situation, usually for personal gain - use something for benefit: to use or develop something in order to gain a benefit Scam: - dishonest scheme: a scheme for making money by dishonest means - trick somebody: to obtain money or other goods from somebody by dishonest means I was contending that I felt like the tactics being used in these games were shady and questionable? Yes. Dishonest? No. However, as I pointed out above, I've changed my tune a little bit after delving deeper into the article and the HN comments. Without question, I should've done that before commenting in the first place.
- patio11 17y agoThe affiliate industry is rife with this, too. Ringtones, etc are essentially financed by reverse billing fraud (the "sign up for our free trial and you'll be billed $9.99 a month without being able to cancel"), and with the way CPC advertising works this tends to crowd out all other advertisers because if you're a fraud you have staggeringly higher LTV than legitimate businesses, meaning you can afford to outbid them. It isn't just affiliates, either: many shareware developers have inadvertently caused their customers damage when their payment processor tacks on high-margin low-value items as a rider to transactions. I covered this on my blog here: http://www.kalzumeus.com/2008/03/09/regsoft-scam/ http://www.kalzumeus.com/2008/03/09/regsoft-scam/ In addition to the outright fraud discussed in that example, many payment processors will do things like offer customers $10 for "download recovery" service, where they promise to keep your download on file for a year so you can get it again. This obviously costs them essentially nothing. That isn't zero value (I suppose, theoretically, the shareware developer could go out of business and stop offering downloads), but it mostly takes advantage of unsophisticated customers who THINK they are buying "Get my software back if my computer melts" and are unaware that almost all shareware authors will do that for free. (Wow, I'm finding myself agreeing with Arrington.)
- hop 17y agoFiscal darwinism.
- caffeine 17y agoNot sure why you were downvoted so much - fiscal darwinism is exactly what it is. We appear to have poorly calibrated selection pressures in these industries: bad regulation and stupid users. Therefore "fitness" in such an area involves fraud, vast numbers of young / unsuspecting users, and opaque advertising/pricing.
- bemmu 17y agoI love it that to the right of this post was TechCrunch advertising for "make $1000/day from home!".
- nikcub 17y agowe do what we can to filter those ads out on the page by maintaining a blacklist in adsense. it isn't easy to manage, which is a whole other story
- devicenull 17y agoIt's essentially trivial in adblock plus. I regularly install it on people computers that I set up, and I've never heard of any complaints, nor seen it not working.
- staunch 17y agoYou misunderstood the issue. Nik Cubrilovic works at TechCrunch -- he was talking about filtering out Google AdSense advertisers on TechCrunch.
- jlees 17y agoWe had the same problem on a WoW site that would frequently end up with gold-selling ads popping up no matter how hard we tried to firefight with blacklisting. We got readers to submit every bad ad they could see, and even pulled the ads at least once, because of the impact on our 'honesty' as readers perceived us.
- nikcub 17y agoI would love to drill into this topic because it is related to the main thread. There are some networks and providers who care about the issue of pushing bad ads, while others turn a blind eye since they have no incentive to keep these ads off your site. Don't be surprised if the current series of TC posts eventually lead into discussing ad networks. For now, please email me (nik at tc) if you do see these ads popup, we dislike them as much, if not more, than the readers do.
- patio11 17y agoIncidentally, the comments at Techcrunch include an important post from James of HotOrNot. Search for "We ran offers like this".
- skmurphy 17y agoFirst two paragraphs from referenced comment: We ran offers like this back in 2005 for a very short period of time at HOTorNOT, that is until we realized what was going on. In a nutshell, the offers that monetize the best are the ones that scam/trick users. Sure we had netflix ads show up, and clearly those do convert to some degree, but i’m pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff. When I hear people defending their directory of deals by saying Netflix is in there, i am reminded of how hotel pay-per-view has non-pornographic movies. Sure it gives them good cover, but we all know where the money is made. In the end, we decided to turn the offers off. Quite frankly, the offers made us feel dirty, and pretty much on the same level as spammers. For us, the money just wasn’t worth it. On top of that, we relied on our goodwill with users and focused on growing by having a product and company that our users liked. Our sense was that using scammy offers would make good money in the short run, but would destroy our userbase in the end. Perhaps apps on facebook don’t feel this pressure because facebook is so huge, and there are always new people to burn.
- fnid 17y agoThe difference is that Facebook has to please the investors, rather than the users. The investors want revenue and they want a good exit. They will be increasingly upset if that exit never comes or it is at a lower valuation than they want.
- ramchip 17y agoWho the heck says someone's point is "shit, doubleshit, and bullshit" when sitting on a panel at a conference? Thinking about it, this might explain their attitude towards users...
- vaksel 17y agoespecially if that someone is Arrington, who you know is going to make it a personal quest to destroy you.
- FreeRadical 17y agoI think she lost a lot of credibility with that statement.
- 17y ago
- zaidf 17y agoTotally with Arrington on this one. OfferPal CEO came across as a complete jerk. Arrington's response was surprisingly chill and levelheaded.
- teamonkey 17y agoWe never heard what Arrington said to them. :)
- deleted 17y ago[deleted]
- NextBigThing 17y agoIn the classic Prisoner’s Dilemma of game theory, people will rationally cheat each other and engage in opportunism unless something prevents them from doing so. In game theory, cheating and cooperation are rational choices. If I cheat you today, I won’t be able to cooperate with you tomorrow. - http://chronicle.uchicago.edu/001005/posner.shtml I couldn't sum it up more succinctly if I tried.Its what I see as happening to Playfish and other more ethical developers: they aren't cheating in the hopes that cooperation will be cut off for their less than moral competitors. But it won't. The impetus on a firm in a new market, indeed, on us as ambitious humans, comes from being able to cheat -- as much as possible -- without being absolutely banned from cooperation. Sad but true. Nice guys finish last.
- numair 17y agoI love how Arrington refers to Slide as the "good guys." You know an ecosystem is unbearably slimy when you have the spammers fighting the scammers for the title of "good guy." Facebook Platform is such a joke. Sad, too, when you know what the original vision looked like.
- Tichy 17y ago"and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription" How does that even work? I think in Germany to start such a subscription, one would have to send a SMS to a specific number. Sounds as if in the US there are other ways? Or is it simply that a phone number equals a bank account? A company could do the same if it could just get a person's bank account number, and just start deducting money?
- ahlatimer 17y agoI believe that by entering the PIN, you're agreeing to the contract. It seems like total "shit, double shit, and bullshit" to me, but it doesn't seem totally outside the boundaries of the law. Might be wrong, though, as IANAL.
- NikkiA 17y agoNope, the pin is purely a verification step for the points you're getting in return for the scam-signup. The legal 'opt-in' step that the scammer claims gives them the right to bill you, is the 'enter your phone number for an SMS' step. The opt-in probably won't be enough to satisfy the watchdog organisations that overlook this kind of stuff (ofcom in the UK for example) but it will be enough to broadside a legal complaint of simple fraud (ie, police involvement), and thus send the complaint to the watchdog authority... The reason they do this is, if they can avoid the police shutting them down with a 'simple' investigation, then they get months upon months as someone like ofcom investigate, and during that time they can rack up the profit, then 'run' (declare bankrupcy and hide the profit) when the watchdog authority appears to be about ready to issue a fine. (IANAL either, but have worked in the premium SMS industry, and seen this kind of 'ofcom-stalling' trick)
- dan_the_welder 17y agoAs a business owner I can attest that a phone number equals a bank account. Daily we receive phone calls that are designed to trick the unwary into agreeing to being billed for worthless services. After the third or so time an employee had been conned into a free website deal or a listing in a worthless business directory. I called my phone provider in a rage and demanded a third party billing block. To which they replied, "No problem sir, most people don't even know we offer that service." Obviously the phone company gets a cut and for that reason are happy to act at middlemen. One would think that an honest broker would require you to opt in to the system, rather than merely providing a virtually unknown opt out option. Facebook is doing the same thing as the telcos, for their cut.
- ivenkys 17y agoWho are the people who sign up for this scams ? Doesn't everyone know enough about these apps to know that ?
- ErrantX 17y agoI signed up for a love film (uk version of netflix) subscription to for a similar "scam" (not facebook or game related). In that case I was toying with getting the subscription anyway (and I still have it 8 months later and am very happy I took the plunge). However I do think that was a lucky experience; I saw something I wanted to try out, got it and got a freebie in the process. Win win. I liked the follow up Techcrunch post where the Hot or Not guy is quoted as saying that the idea isnt in itself a bad one (affiliate sign ups) - just that the industry has slid the wrong way. Im sure he's correct; It worked for me and it can work for others too. But Im guessing that the number of times it is easier to just scam people is higher. Good on Arrington for having a good public bitch about this.
- dgabriel 17y agoEveryone who has previously fallen for these scams, or has enough experience to understand that most of the offers are scammy. That leaves a lot of suckers to be mined. My nanny (a very nice, intelligent woman, but naive about such things) wound up with a $500 cell phone bill last month after falling for a bunch of scams in a single week.
- ryanwaggoner 17y agoYou have a nanny and you're posting on HN? How old are you?
- ZachPruckowski 17y agoIt could be that he has children himself, so "his nanny" watches over his children and not over him.
- ryanwaggoner 17y ago
- hop 17y agoThen the VCs that fund Zynga are equally culpable for these scams - http://www.zynga.com/about http://www.zynga.com/about Kleiner Perkins, Foundry Group, Union Square Ventures, Peter Thiel's Clarium Capital, more...
- motoko 17y agoI don't include Peter Thiel as equally culpable. As far as I know, Thiel failed to invent a state-free currency with Max Levchin, and over decades, he witnessed the defeat of uncompromising humanity over unconditional growth, and now Peter Thiel probably understands himself as like the Adrian Veidt character from the Watchmen. That is my best hypothesis. Who has obsessed more about the cancers of human behaviors than Thiel and his circle? He seems like a person who would feed cancer now if he projected his culpability as minimizing E(cancer).
- ryanwaggoner 17y ago...what?
- motoko 17y agoOh, I mean that I don't agree that Peter Thiel and his investment group is "equally responsible" for the decay of ethics online because I don't think Peter Thiel believes in money. I'm sure Peter believes YOU believe in money, but he himself probably would prefer a world with some better way of storing and moving wealth ---even if to get that world, he must sponsor companies he himself does not like. I don't know Peter Thiel; this is what I think from his writing and his past history. PayPal was originally the "new world currency." There is an old PayPal sticker on the pool table that says "PayPal: New World Currency" in Molly's Tavern in Mountain View. I think Peter Thiel and Max Levchin meant that literally... but, then their investors intervened to secure a safer cash exit. What do you do with your life when almost succeed to make an actual New World Currency... but then people you trusted, they sell you out for millions of the currency that you convinced yourself was a corrupt illusion?
- Eliezer 17y ago
- sscheper 17y agoI think the next step will center on Facebook outlining rules against those ads that are deceptive. I highly doubt Facebook doesn't want to put a stop to it because "it makes Facebook a quick buck." The numbers they yield are a fraction of a fraction of Facebook's revenue. Those ads aren't the cash cows--they're small, extreme and unethical elements that have slipped through the cracks of the application ecosystem. If you're going after them, you might as well go after Google for allowing Acai Berry ads to be shown on Google Adsense.
- axod 17y agoObviously this is nothing new. Reward schemes and sites have been around for 10+ years, and are really profitable for those who run them. But the value they give is debatable.
- jfarmer 17y agoI agree with Arrington, but his article is long on rhetoric and short on facts. He also totally mischaracterizes Anu's response to his claims, saying she didn't address "any of his points," when in fact she addressed all three of them directly.
- deleted 17y ago[deleted]
- chris123 17y agoSpeaking of scams and scam companies, I’m dealing with a company named MindJet, which makes a mind mapping program called MindManager, which I wanted to test against the open-source programs. BTW, the open-source programs are better, as one might expect. Before purchasing the software (to test) I contacted the company to ask about the software itself, as well as their refund policy. I was emailed back by Christian Walter, who said they offered a 30-day money back guarantee. I purchased the software, tried it, determined that it did not meet my needs, to put it nicely, and certainly was not something that was worth any money. Therefore, I emailed the company to request my refund. This is where the fun starts. When I requested my refund, Christian at MindJet effectively denied the request (in my opinion) and told me I would have to download a form, swear on it, sign it, and fax it to an international number. On the form it said all fields must be completed or else no refund. One of the fields was “Customer Number,” which it says is listed on your invoice. That is not true (at least not on the invoice I have, nor anywhere on "my" account on their website). The other part of their scam (that's what I call this kind of business practice) is that when you buy the product they throw in a “free” year of support. What they don’t tell you is that this is really a subscription for paid support, with the first year free, and that they will bill you annually starting next year unless you: (1) figure this out, (2) figure out how to opt out, and (3) do it in time. I’m still dealing with this MindJet issue, gathering info for a detailed blog post with screenshots. Tune in later to see how the story ends, if they refund me on their own or I have to dispute the charge with Mastercard (I’ve already met the requirements to dispute the charge and am just waiting to see what they will do). In meantime, I can tell you that, based on this experience (on its own and in comparison with every other company I have ever done business with), I consider MindJet a scam company. If their business practices are legal, they seem at least highly deceptive, tricky, and unethical (to me). Again, this is only my experience and opinion, so take it for what it's worth.
- donw 17y agoThis is why when a customer asks for a refund, it's a lot easier to just give them one. Especially if you're a software company. You might lose a sale, and a few bucks, but that's nothing compared to the bad press and expense of chargebacks against your merchant account. If MindJet had just refunded Chris's money, no matter whether or not he is actually 'right', then this post, and the blog post that's likely to follow it, wouldn't even exist. The worst that Chris could say is, "I bought their software, it sucks, they... uh... gave me my money back. Those bastards." Being scammy just doesn't pay off, at least to my way of thinking.
- jlees 17y agoWhat's interesting is how quickly you run up against scam-walls (as someone who doesn't like paying for virtual currency outright, anyway). I can easily see how users fall for it, even the smart ones who try to pick scams that don't require credit card or mobile numbers. As a user, though, it's really annoying to keep running up against the same things in every single game out there. Want more acres of land? A bigger cafe? Better weapons in Spymaster? The very omnipresence of 'give us your mobile number/credit card and we'll abuse terribly small print to charge you money for things you don't want' is making them almost acceptable, because people are used to seeing them.
- praptak 17y agoWhat really sucks is that a company can just pull money out of your account without your actual consent. As long as this is possible, the scammers will thrive. Credit card companies and telcos should get their act together and stop this. No more handling your wallet to the vendors.
- Devilboy 17y agoAt least credit card companies will refund you when you dispute a charge. The whole 'pay to receive' SMS system is just horrible.