Don’t get scammed - protect yourself in domain transactions

A recent thread at DNForum.com has brought to attention a growing trend in domaining these days - that of domain transaction scamming.

In this particular case at DNForum, domainer “Alexa the top” sold $xxx,xxx worth of domain names after acquiring them in a fraudulent manner. Domainer “jayspot” was defrauded out of over $100,000 even though he used Escrow.com to purchase the domain names from “Alexa the top”. He has since contacted the FBI and the Toronto police.

This is not an isolated case. There have been numerous reports of stolen domains at DP forums examples of which can be seen here, here and here.

If you do a bit of research on stolen domain names you are more then likely to find that there are many more cases similar to the above.

All of them have one thing in common. Someone hacks into the email account of the domain owner and uses this email account to access the domain registrar administration of the domains in question subsequently transferring the said domains to their own account. Having transferred ( or rather stolen ) the said domains, they then proceed to quickly try and sell these domains to unknowing buyers at popular domaining forums like DNForum, DP or namepros.

Domainbits recently put together a list of tips you should keep in mind before engaging in a domaining transactions. He mentioned that:

1. Escrow.com does not provide complete security in a domain transaction as they only help make sure money goes from point A to point B.

2. He advises you do diligent research on the domain history making sure you check whether there were any weird changes of ownership in recent times. If there were more then one owners previously and the domaining transaction involves high amounts of money, you would do well to call the previous owners and talk to them directly checking that they weren’t defrauded.

3. He advises you don’t rush a transaction especially if it involves big money. This I don’t agree with completely since there have been occasions when a domainer offered up a domain for a quick sale in order to raise cash for another purchase. You should definitely research the domainer before you make any decisions on this one though.

4. He advises you buy from reputable buyers - I’d like to add that on forums you should definitely avoid buying domain names from sellers with low transaction ratings… no matter how good the deal sounds.

5. He states that if a deal sounds too good to be true, it probably is. Someone selling a $xxx,xxx domain for $xx,xxx should raise your suspicions.

6.  Keep your domains safe. Make sure your domain names are with a registrar that cares about domain security. Moniker and Fabulous are popular in this regard.

7. Avoid free email accounts as they are hacked easily.

I would like to add extra points to this list

8. If your transaction is above the $100 treshhold, avoid Paypal as means of payment. The DP threads have shown how fragile a Paypal deal is and have shown that Paypal will not do anything to protect you as a seller. If you sell your domain name and receive payment via Paypal, the buyer can simply claim a fraudulent payment and they will get their money back. There is pretty much nothing you can do about this.

9. Research your registrar and find out what they will do to protect your domain names from being stolen. If they will not protect you then move your domains to a registrar that knows what they are doing.

10. If you want to improve your reputation as a seller and make sure your transactions are always in order perhaps you should join the DNOA which goes a long way to help protect buyers and sellers.

This entry was posted on Tuesday, March 11th, 2008 at 11:09 am and is filed under Domain News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.