Jim Hughes pointed me to an interesting SMS auction the Times is running. It’s a reverse auction with a bit of a twist: users SMS in a bid for a Lotus Exige car, in pence and between 1p and 1,000 pounds, and the lowest unique bid wins the right to buy the car for the amount of the bid. So, whoever wins will get a 30,000+ pound car for under 1,000 — but the real winner is The Times, which is charging 1.50 for each SMS bid.

There’s some neat touches to the auction, apart from its format and prize. After each bid, users get an SMS giving them the status of their bid, indicating if it’s the lowest unique, unique but not the lowest, or not unique. They’ll get another should the status of their bid change at any point before the end of the auction in a few days. Apparently the company behind these has also run them before for other British newspapers.

But while the auction might be interesting in its execution, the 1.50 per bid fee (hiding down below in the fine print) — and some of the marketing around it gives it a slightly off feel, almost like those odd car raffles in London’s airports — particularly the line “You can bid as often as you like, and you may like to use your first bid as a tactical ‘testing of the water’.” Sure, but that testing the water will set you back 1.50, like all your other bids.

It’s hard not to see the Times raking in a good amount of cash from this promotion, but the mobile industry needs to be a bit wary of these types of deals, as they can leave everyone in general with a black eye. There’s already some of this going on in the ringtone business, with many companies concerned that the business practices of one firm will put people off the market as a whole — a valid concern. While the short-term revenues on offer may be hard to pass up, the long-term ramifications of delivering sucker punches to users and grabbing their money may be much more dear.