Scamville: The Social Gaming Ecosystem of Hell

The 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.<p>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:<p><a href="http://www.kalzumeus.com/2008/03/09/regsoft-scam/" rel="nofollow">http://www.kalzumeus.com/2008/03/09/regsoft-scam/</a><p>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.<p>(Wow, I'm finding myself agreeing with Arrington.)

Speaking 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.<p>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.<p>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.<p>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.<p>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).<p>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 <i>paid</i> 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.<p>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).<p>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.

Who the heck says someone's point is "shit, doubleshit, and bullshit" <i>when sitting on a panel at a conference</i>?<p>Thinking about it, this might explain their attitude towards users...

I 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."<p>Facebook Platform is such a joke. Sad, too, when you know what the original vision looked like.

Totally with Arrington on this one. OfferPal CEO came across as a complete jerk. Arrington's response was surprisingly chill and levelheaded.

I love it that to the right of this post was TechCrunch advertising for "make $1000/day from home!".

I 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.

Incidentally, the comments at Techcrunch include an important post from James of HotOrNot. Search for "We ran offers like this".

Then the VCs that fund Zynga are equally culpable for these scams - <a href="http://www.zynga.com/about" rel="nofollow">http://www.zynga.com/about</a><p>Kleiner Perkins, Foundry Group, Union Square Ventures, Peter Thiel's Clarium Capital, more...

What'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.<p>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.

"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"<p>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?<p>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?

Obviously 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.

What 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.<p>Credit card companies and telcos should get their act together and stop this. No more handling your wallet to the vendors.

I 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.

I think it's telling about that conference that the scammer company was given a panel spot.

Who are the people who sign up for this scams ? Doesn't everyone know enough about these apps to know that ?

I think the next step will center on Facebook outlining rules against those <i>ads that are deceptive</i>. 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.<p>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.

I 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.<p>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.