status-done Caution to members - People selling domains they don't own

MapleDots · Jun 29, 2018

I get a lot of PM's from members asking me to purchase domains.... and I mean a lot.

I have bought quite a few and it's no secret that I am willing to pony up the dough if the domain appeals to me.

However, I am noticing a little trent here and it's the third time this has happened to me.

A member will send me a message asking me if I am interested in a half dozen or so premium domains. Of course I assume the member has ownership of these domains and I begin discussing the possibility of 1-2 acquisitions. The problem is on a couple of occasions the members I'm dealing with don't actually own the domains. I waste a lot of time and then find out there is a different owner. So if they negotiate 5k with me then they try to get it for 2.5k from the owner. I guess I am at fault because 5k is my magic bidding number and people know that.

So today I get a PM from a member asking me to negotiate on a half dozen premium domain names and coincidentally I was just conversing with the real owner on three of the domains.

I asked the guy if he had ownership and of course I already knew he did not. I reported him to namepros and the real owner of the domains.

Turns out he read my post on namepros where I said I will pay 5k for one word .ca domains if they meet my criteria as a positive meaning, singular, dictionary term.

So to give an example, he knew I paid good money for red.ca so he substituted another color, contacted the owner, asked him how much and then marked it up by 5k and contacted me.

Problem here is the real owner had no idea and he made no mention to me that he was not the owner of the domains.

I reported him to namepros but in retrospect he will probably get off scott free because he will claim he was just trying to broker the sales.

So the question I have is can you really broker a sale when neither the buyer or seller has any idea that someone is trying to broker the domain?

MapleDots · Jun 30, 2018

domaineed said:
Agreed. A high-risk strategy and one might not be able to go far with this. I think a solution would be difficult to implement as it can occur in various sophisticated forms across different platforms.

Yes but on most platforms like sedo for instance the owner has agreed to sell the domain to a third party and has allowed sedo to represent them. Additionally the purchaser understands that sedo does not own the domain.

In my case neither the owner or the buyer was aware the 3rd party wanted to broker/sell the domain.

Kate · Jun 30, 2018

The bottom line is that you don't try to sell stuff that you don't own, or that you are not authorized to sell.
If what you want is a finder's fee why not - then be upfront.
Pretending that you own the domain when you don't is misrepresentation.
Some of the comparisons are not valid. A domain name is unique, unlike a car, and can't be replaced by another.

If you agree to sell something then you have a binding contract. If you are unable to secure the asset you've just sold, you have a problem.

A few years ago, there was a domainer who was front-running and it backfired (he's not the only one, it is a game that still continues to this day).
There was a prerelease LLL.com at Namejet, so he contacted end users before the auction was even over to gauge interest, and see how much he could make in a quick flip, and how high he could bid.
One end user reacted angrily, asserting TM rights, making legal threats, to the point that Namejet had to halt the auction.

I can't remember the exact sequence of events, I think the name eventually sold later. But it could have turned nasty, with NJ caught in the middle and the other bidders cheated on.

domaineed · Jun 30, 2018

I understand your point @MapleDots. The domain industry is still the wild west. There's a reason brokers/asset managers are required to have a license in many industries. They have to ensure compliance even if buyer/seller are not aware of the rules. People trust them and pay a percentage/commission for the services as they are accountable under the law to various institutions. I am sure that Sedo must be a regulated player. The problem with your situation is that brokership or agency was technically not involved at all, imo. It is hard to address this issue in absence of any marketplace guidelines. I think you should share the communication with Support and ask for NamePros' official position on the matter.

MapleDots · Jun 30, 2018

domaineed said:
I understand your point @MapleDots. The domain industry is still the wild west. There's a reason brokers/asset managers are required to have a license in many industries. They have to ensure compliance even if buyer/seller are not aware of the rules. People trust them and pay a percentage/commission for the services as they are accountable under the law to various institutions. I am sure that Sedo must be a regulated player. The problem with your situation is that brokership or agency was technically not involved at all, imo. It is hard to address this issue in absence of any marketplace guidelines. I think you should share the communication with Support and ask for NamePros' official position on the matter.

It has been shared with support and the members marketplace account has been restricted so therefore namepros has deemed the event against namepros rules.

I understand this decision and why it was made.

domaineed · Jun 30, 2018

That's great if properly implemented. I understand it too

I'd appreciate if someone can point to particular rules for future reference.

imadoer · Jun 30, 2018

I had people try to sell me names that where in the closeouts also names that where avail for registration. Also have gotten pms asking for donations for available names

equity78 · Jul 1, 2018

Kate said:
The bottom line is that you don't try to sell stuff that you don't own, or that you are not authorized to sell.
If what you want is a finder's fee why not - then be upfront.
Pretending that you own the domain when you don't is misrepresentation.
Some of the comparisons are not valid. A domain name is unique, unlike a car, and can't be replaced by another.

If you agree to sell something then you have a binding contract. If you are unable to secure the asset you've just sold, you have a problem.

A few years ago, there was a domainer who was front-running and it backfired (he's not the only one, it is a game that still continues to this day).
There was a prerelease LLL.com at Namejet, so he contacted end users before the auction was even over to gauge interest, and see how much he could make in a quick flip, and how high he could bid.
One end user reacted angrily, asserting TM rights, making legal threats, to the point that Namejet had to halt the auction.

I can't remember the exact sequence of events, I think the name eventually sold later. But it could have turned nasty, with NJ caught in the middle and the other bidders cheated on.

I remember that, it was a complete clusterfest. It's a risky game trying to do this.

Here is a post from 2015, it covered someone posting about selling names they don't own. MorganLinton also wrote about buying names for quick flips before you owned them and comments questioned that? http://tldinvestors.com/2015/04/selling-a-domain-name-you-dont-own-cool-or-not-cool.html

MapleDots · Jul 1, 2018

equity78 said:
I remember that, it was a complete clusterfest. It's a risky game trying to do this.

Here is a post from 2015, it covered someone posting about selling names they don't own. MorganLinton also wrote about buying names for quick flips before you owned them and comments questioned that? http://tldinvestors.com/2015/04/selling-a-domain-name-you-dont-own-cool-or-not-cool.html

GoDaddy has been accused of the same:
https://www.namepros.com/threads/godaddy-accused-of-domain-name-front-running.766743/

MapleDots · Jul 1, 2018

So has NameSilo:
https://www.namepros.com/threads/is-namesilo-frontrunning.1055440/

IMEZI · Jul 1, 2018

Before talking or even negotiating, you must ask the seller to create TXT record to : this-domainname-dot-ca-for-SALE-to-youremail-at-gmail-dot-com you could recheck this record

If the seller were legitimate brooker with legal/gentlement agreement from the original domain owner, then the TXT record would not be a problem. But if the seller were doing arbitrage without agreement from the domain owner, the seller would be gone without any further reply.

Make this move become your defense line and eventually those unethical seller will be gone, the one who keep contacting you offering premium domain names will be legitimate brooker

BrandBoardwalk · Jul 2, 2018

Just a general rule of thumb - if you're doing something that you don't want made public (in this case to either owner or buyer), then there's a reasonable chance that not only is it shady (or downright wrong) but also in the bottom of your heart you know it. So if the "broker" is so concerned with disguising/misrepresenting ownership then they've passed judgement on themselves already - it's shady at best, unethical at worst. As sales people we can all appreciate the hustle, but the lack of transparency puts this scenario in the "not cool" column. Just my two cents.

That said, I really appreciate all the viewpoints offered in this thread, some of which would throw my response out the window - lots of valid ways to approach this....

Wannabean · Jul 2, 2018

There 3 possible outcomes of front running that I can see.

1) Most often, 1 or both of the deals negotiated by the front runner fall through. Result: Everyone is mildy annoyed.

2) Less often, the deal completes but one or both victims of the front runner find out and are extremely annoyed/upset.

3) Very occasionally both deals complete and both buyer and seller are happy enough with what they paid/received and the front runner is ecstatic, as all they really did was broker a sale, without permission from the owner and kept a huge percentage of the cash.

Seen as number 3 isn't going to happen very often, what's the merit in allowing this to continue?

Name and shame so we can all avoid these time wasting leeches in future. There's no downside for these idiots unless a light is shined upon them and their success rate decreases as a result.

anantj · Jul 3, 2018

Kate said:
The bottom line is that you don't try to sell stuff that you don't own, or that you are not authorized to sell.
If what you want is a finder's fee why not - then be upfront.
Pretending that you own the domain when you don't is misrepresentation.
Some of the comparisons are not valid. A domain name is unique, unlike a car, and can't be replaced by another.

If you agree to sell something then you have a binding contract. If you are unable to secure the asset you've just sold, you have a problem.

A few years ago, there was a domainer who was front-running and it backfired (he's not the only one, it is a game that still continues to this day).
There was a prerelease LLL.com at Namejet, so he contacted end users before the auction was even over to gauge interest, and see how much he could make in a quick flip, and how high he could bid.
One end user reacted angrily, asserting TM rights, making legal threats, to the point that Namejet had to halt the auction.

I can't remember the exact sequence of events, I think the name eventually sold later. But it could have turned nasty, with NJ caught in the middle and the other bidders cheated on.

I think this one:

https://www.thedomains.com/2017/03/...ion-from-2015-you-should-read/#comment-218983

DomainWolf · Jul 3, 2018

I think there might be a good opportunity here. Let's say you do find a buyer and tell the domain owner you want xx% of the sale. Some people are better at sales than others.

Sissa Quinn · Jul 3, 2018

Unfortunately it is a very common fraud. Thank you for sharing your experience with others!

WingMan · Jul 4, 2018

Does the person own the domain name at the time you made payment? If yes, that is legal. I would say probably quite common too, not just for domain names.

If no, complications could arise if the "broker" fails to secure the domain name.

Did the person lie and say they own the domain while they didn't? That is unethical.

Way out: since you appear to acquire domain names this way quite often, ask prospective sellers to show evidence that they own the domain name.

Bravo Mod Team · Jul 4, 2018

MapleDots said:
Is it ok to try an sell domains without telling the client you don't own them?

If it is important to you whether the seller is the owner or an authorized broker, then please feel free to ask before entering negotiations. If they are not the owner or an authorized broker, then please report them to us.

MapleDots said:
So the question I have is can you really broker a sale when neither the buyer or seller has any idea that someone is trying to broker the domain?

On NamePros, we've had a rule about this for years:

Rule 6.1.14. You must be the rightful owner or authorized broker to offer an item (e.g., domain name) for sale. Brokers must be authorized by asset owner(s) to sell on their behalf.

Infractions and/or restrictions are warranted when we become aware of any violations of this rule.

Thank you for reporting it.

domaineed · Jul 4, 2018

@Support Team Just for more clarity, do you consider clever wording like "would you be interested in domainname(/.com)" as equivalent to "Rule 6.1.14. ... offer an item for sale..."? I mean such wording where a respondent to DNW thread neither implies brokership/ownership of a domain name nor their intention to sell. I think there can be other motives also besides the issue described in the OP, such as a free 'real' appraisal.

Bravo Mod Team · Jul 4, 2018

domaineed said:
do you consider clever wording like "would you be interested in domainname(/.com)" as equivalent to "Rule 6.1.14. ... offer an item for sale..."?

If there is further context due to messages before it or after it that clearly indicate an attempt to sell the domain name, or it is in response to a Domain Buyer Request (WTB thread), then that would be a violation, but we shouldn't assume we know someone's intentions based off of that question alone.

We hope that helps.

sella.ca · Jul 10, 2018

As the owner of the names in question, all I can say is that this self appointed broker is "Recruitable"

Part of me likes the idea of a self-motivated "broker" trying to sell my names; a little army of them would be nice

On the other hand, someone going around pretending to own my names is a bad thing.

Had Recruitable approached me with a pitch about maybe knowing a potential buyer, I'd be happy to offer a 10% finders fee if he could get at least my BIN price.

The member has gone quiet since Jun 28, so I imagine they've had some ban placed on them, which, according to the rule posted above, seems to be justified.

We've all heard of the "6 degrees of separation", and I've often thought that the perfect end user is likely only a few referrals/degrees away; if there was a system to reward the referrers, that would be a great domain sales system

status-done Caution to members - People selling domains they don't own

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