auctions GoDaddy Expired Auctions can be tricked

[Furquan]

Twitter user and Chinese domain investor posted that Godaddy Auctions allows people to use two bidder accounts on the same name and a lot of people are using it for tricking the auctions.
 

https://twitter.com/x/status/1678228128194256896

 

 

[D Haynes]

This is what Dynadot are trying to combat by offering the domain to the 2nd bidder for their top bid instead of retracting all the top bidders bids. Shill bidding will always be a problem but I'm not sure there's a way to combat it and make everyone happy

 

[the_poet]

Why not require everyone who wants to bid over a certain amount a special certification or something similar, which is more in line with what Sedo does for bids over $10k.

 

[mixing]

Why not require everyone who wants to bid over a certain amount a special certification or something similar, which is more in line with what Sedo does for bids over $10k.

I agree, and they aren't the only place that does this. Lots of places will require some sort of verification/certificate after a certain amount.

But, in his tweet I don't see any actual rules from GD saying that this okay. He says people are doing it, but does anyone know what GoDaddy's TOS actually says? I can't believe they would allow people to just use 2 bidder accounts like that...

 

[bmugford]

Twitter user and Chinese domain investor posted that Godaddy Auctions allows people to use two bidder accounts on the same name and a lot of people are using it for tricking the auctions.
 

https://twitter.com/x/status/1678228128194256896

 

This scheme has been going on for years and years.

Two bidders can run a domain up, and block any legitimate bidders from bidding. Then the top bidder doesn't pay, leaving the second bidder to get the domain at a major discount.

It is certainly a flaw with GoDaddy's system design.

Brad

 

[AbdulBasit.com]

I'm aware that sometimes if the winning bidder fails to make the payment at GoDaddy, then GD doesn't offers the domain to the 2nd highest bidder and lets it drop completely.


That's why we see sometimes the domain is reported at NameBio.com showing it sold for an X amount at GoDaddy but eventually selling it again in the next two months or so after going through an entire drop process and sometimes DropCatch or SnapNames grab it and auction it off.

 

[bmugford]

I created a thread on another forum about this issue in March 2014. Even at that point, this issue had existed for years. That thread ended up with 474 comments and many examples.

Here is an example of it in action -

https://www.thedomains.com/2014/03/04/discoverindia-com-updated-and-now-closing-price-is-5047/

In that case they rolled back the bids, but you can see how a domain went from $5K to $100K+ with people playing games.

You can even see my comment there -

Brad Mugford says

MARCH 4, 2014 AT 7:07 PM

Paul,

I have seen this type of bidding activity before many times. I explained what normally happens in the other thread. I have also pointed out specific examples of this in the past to various parties @ GoDaddy.
In summary, this normally involves at least two bidders running an auction up past a reasonable price, then the high bidder does not pay and the 2nd bidder gets it for a huge discount with their bids removed.
One thing you have to realize in this specific situation is it took 2 bidders to run the price up to $106,000. Even if one bidder is a shill, the current high bidder also had to bid for the price to make it there.
Is it plausible someone would legitimately bid $100K+ on this domain name? I don’t think so.
The fact that GoDaddy allows public anonymous bidding just leaves this open to games like this. Changes really need to be implemented to stop this sort of thing from happening as often as it does.


That was 9+ years ago.

Brad

 

[bmugford]

This was another example from March 2014, for a different domain I would guess was worth about $2500 - $3,500 range.

2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $30,540
Comment: Proxy Bid
2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $30,040
Comment:
2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $20,290
Comment: Proxy Bid
2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $20,040
Comment:
2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $15,290
Comment: Proxy Bid
2014/04/19 09:25 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $15,040
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $11,950
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $11,700
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $8,500
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $8,400
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $5,300
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $5,200
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $4,550
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $4,500
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $3,550
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $3,500
Comment:
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $2,550
Comment: Proxy Bid
2014/04/19 09:24 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $2,500
Comment:
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $1,825
Comment: Proxy Bid
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $1,800
Comment:
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $1,125
Comment: Proxy Bid
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $1,100
Comment:
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $530
Comment: Proxy Bid
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $520
Comment:
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $325
Comment: Proxy Bid
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $320
Comment:
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $125
Comment: Proxy Bid
2014/04/19 09:23 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $120
Comment:
2014/04/19 09:18 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 2 $17
Comment: Proxy Bid
2014/04/19 09:11 PM (PDT) 2014/04/28 01:05 PM (PDT) Bidder 1 $12

I would love to know what GoDaddy has done to address this isssue.

Brad

 

[.X.]

This scheme has been going on for years and years.

Two bidders can run a domain up, and block any legitimate bidders from bidding. Then the top bidder doesn't pay, leaving the second bidder to get the domain at a major discount.

It is certainly a flaw with GoDaddy's system design.

Brad

Yes.. Shill bidding ... very bad stuff

 

[pablohc86]

Why not require everyone who wants to bid over a certain amount a special certification or something similar, which is more in line with what Sedo does for bids over $10k.

why not require that for each account??

 

[GNP]

This is what Dynadot are trying to combat by offering the domain to the 2nd bidder for their top bid instead of retracting all the top bidders bids. Shill bidding will always be a problem but I'm not sure there's a way to combat it and make everyone happy

And what Dyandot is doing is arguably shill bidding too, since either ALL the bids by the "shill" are shill bids or NONE of them are. ARBITRARILY deciding that their top bid is a "shill" bid, while their lower bid(s) are NOT shill bids makes no logical sense. (Though it does present the opportunity for shills to work for/on behalf of the marketplace, to increase the fees received. I believe there have been cases where this has happened.)

There are several things that COULD be implemented to help greately reduce shill bidding, IF domain marketplaces actually wanted to restrict it. On the other hand, since marketplaces likely gain financially from it, they seemingly choose to ignore it instead working on fixing it.
#1. Make it so if the domain price is over X amount the bidder has to be verified (say a scan of their ID, passport, business registration with the government, etc), in order to bid.
#2. Make it so a bidder is only allowed ONE domain AUCTION account per person / registered business, see #1. Account restriction is ONLY for auctions, does NOT apply to having accounts for holding domains and/or for BIN / Best Offer type transactions.
#3. Make it so a % of the bid amount is automatically charged (say 5% to 50% "earnest money" depending on risk factors) or must be kept in the bidding account. If they win the domain that amount counts toward the purchase price, if they fail to pay the remainder, they forfeit the amount charged.

The two MAIN reasons shill bidding works is the one-time FREE non-payment + easy of creating a new auction account. (I understand that it can be difficult to control creating new accounts, especially for international bidders, but if the "scammers" know they would have to pay 10% of their 30K winning bid, even if they refuse to pay the rest, they won't shill bid, since it would COST them more money than the domain is worth.)

 

[MadAboutDomains]

Not the first shady loophole that those in the know can and did/do use to their advantage.

 

[topdom]

"Honest" bidders will give their ID, and shillbidders don't need to, they may not even be real people.
How to stop shillbidding: Create a bidder page, link each bid to its bidder's page, and on that bidder page some basic info should be shown: previous bids of the user on other domains (and who was awareded the domain eventually), part of IP, part of email, display name,.. No ID needed. If you give your ID you think everyone is honest, but in reality you are victim to identity theft.
.....
Masterbucks want some verification to allow us to withdraw our money. It is a company without a business Noone knows what they really do ! All emails are ignored. Epik says, contact them, we are not related (everything except the company name are the same but still not related), and masterbucks just ignore. They made a deal with themselves to steal our money, or at the best harrass us to steal our identity. Masterbucks doesn't do any business, and Epik can do but refuses to do, because they think profitable business is not profitable, only stealing is. They will eventually pay their debt to us, buy stealing more from others (because there is no income source, they refuse to make legitimate money), but from who. (same topic: requiring ID). Maybe they were making money from things Trump (and good aliens) was fighting against, and registrar business was just a cover up, just like someone else's pizza business.

 

[TLDN]

Just a thought...why don't they re-auction the domain, if the winning bidder doesn't pay and notify by email all the original bidders?

 

[Ahmed Hany]

dropcatch are following the same thing they gave me a domain name because i was the second bidder there

 

[Lord Antares]

This scheme has been going on for years and years.

Two bidders can run a domain up, and block any legitimate bidders from bidding. Then the top bidder doesn't pay, leaving the second bidder to get the domain at a major discount.

It is certainly a flaw with GoDaddy's system design.

Brad

That's actually a cool strat I was unaware of. So the buyer actually gets it for the starting price, right?

Question is, how on earth does GoDaddy not care about that? That looks like something that would lose them heaps of money and they are all about money.

Also, I guess the new "shill" accounts get banned, but can they not see when a person is constantly bidding in 2-person auctions where the other account is new and doesn't pay?

 

[bmugford]

That's actually a cool strat I was unaware of. So the buyer actually gets it for the starting price, right?

Question is, how on earth does GoDaddy not care about that? That looks like something that would lose them heaps of money and they are all about money.

Also, I guess the new "shill" accounts get banned, but can they not see when a person is constantly bidding in 2-person auctions where the other account is new and doesn't pay?

Well, this is one of the reasons people like myself rarely bid on GoDaddy auctions anymore.

As a legitimate bidder, I am not all that interested in playing auction games.

I consider the practice to be unethical, but GoDaddy has known about these issues for a long time. I have brought this up with many people at GoDaddy over the last decade plus.

It is bad for everyone involved, other than the people scamming the system.

It blocks a lot of legitimate bidders from even being involved in the first place.

All you need is what $4.99 to create a burner auction account?

GoDaddy needs to fix their system. There are multiple ways they could do it.

Brad

 

[Lord Antares]

Well, this is one of the reasons people like myself rarely bid on GoDaddy auctions anymore.

As a legitimate bidder, I am not all that interested in playing auction games.

I consider the practice to be unethical, but I mean GoDaddy has known about these issues for a long time. I have brought this up with many people at GoDaddy over the last decade plus.

The games are still being played. It is bad for everyone involved, other than the people scamming the system.

All you need is what $4.99 to create a burner auction account?

They need to fix their system. There are multiple ways they could do it.

Brad

I'm just curious as to how it works in their favor. It seems like a domain which could end up at $5k ultimately ends up at $12. Suffice it to say, I don't see how that makes them money. I'd never classify godaddy as a company that doesn't care about their profits.

I use GD marketplace simply because they hold the lion's share of the market. Now all of the expired names from various registrars across the world go through godaddy, including China. I see so many proxy bids on day 1 of the auction for mediocre names. Who does that? I don't even trust GD with my proxy bid.

 

[bmugford]

I'm just curious as to how it works in their favor. It seems like a domain which could end up at $5k ultimately ends up at $12. Suffice it to say, I don't see how that makes them money. I'd never classify godaddy as a company that doesn't care about their profits.

I use GD marketplace simply because they hold the lion's share of the market. Now all of the expired names from various registrars across the world go through godaddy, including China. I see so many proxy bids on day 1 of the auction for mediocre names. Who does that? I don't even trust GD with my proxy bid.

I don't think it really does work in GoDaddy's favor. I am not sure why the system has not been changed.

GoDaddy is a multi-billion dollar company. It is not like they don't have the resources to fix it.

You can see how it would work in the favor of the people scamming the system though.

The problem is there needs to be an option other than just selling the domain to the 2nd bidder, with all the top bidder's bids removed.

I am not sure if that is the case in every auction though. I know I have been the 2nd bidder in the past, and occasionally the top bidder doesn't pay. Then, I have been given the option to buy the domain.

Some others alluded to domains with non-paying bidders just being dropped sometimes.

It is just hard to trust the system and results, knowing these kind of games are being played.

Brad

 

[Lord Antares]

I don't think it really does work in GoDaddy's favor. I am not sure why the system has not been changed.

GoDaddy is a multi-billion dollar company. It is not like they don't have the resources to fix it.

You can see how it would work in the favor of the people scamming the system though.

The problem is there needs to be an option other than just selling the domain to the 2nd bidder, with all the top bidder's bids removed.

I am not sure if that is the case in every auction though. I know I have been the 2nd bidder in the past, and occasionally the top bidder doesn't pay. Then, I have been given the option to buy the domain.

Some others alluded to domains with non-paying bidders just being dropped sometimes.

It is just hard to trust the system and results, knowing these kind of games are being played.

Brad

It just seems curious to me. A company which cares to squeeze every cent of profit doesn't fix this loophole for years.

ID verification would solve it at once, although it would create a barrier to entry which would probably lose them some bidders. At the very least, they can investigate profiles that win a suspiciously high amount of auctions where themselves and a new account were the only bidders and the new account never paid. I think they probably get obvious.