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

 

 

[topdom]

Shills can't be avoided fully, and it may not always be unethical either. Because , they have a great domain, which can sell for 6 figures in a few months, but they prefer 5 figures now, but noone is bidding over 3 figures. Then do what... And bidders need to be aware of this situation.

How to avoid it: requiring ID means just giving more power to them. Other bidders (not the company owning the domain) need to know something about potential shillbidders . Something need to be shared with other bidders, such as past bidding history on other domains, how old such a bidder is (as a bidder).

They want to reserve the domain for themselves if the max real bid is far below their expectation, then what: they would add a high proxy bid; but real bidders would suspect that this is the case by looking at his bidding history, and quit bidding. This would be more fair then thinking: let them bid against us although we want to keep the domain, maybe some sucker will bid high enough.

 

[bmugford]

Shills can't be avoided fully, and it may not always be unethical either.

Can you point to an example of when it would be "ethical" for a group of bidders to conspire and place auction bids that they have no intention of honoring, in a scheme to suppress the actual sales price well below market value?

It is certainly against GoDaddy's TOS.

There are also laws regarding shill bidding, bid rigging, and other forms of collusion that could come into play.

But hey, this has been a problem for years.

At what point does GoDaddy's lack of action just become a tacit endorsement of what is happening?

Brad

 

[nametrekker]

I'm naive, I guess

I assumed such activity would be criminal but I guess things like this happen in auctions, whether domains, art, homes, etc --- they need to implement a system to obviate shill bidders and/or make the fake high bidders make payments with debit cards or bank accounts that reflect funds avail in real-time

 

[Lox]

They want to reserve the domain for themselves if the max real bid is far below their expectation, then what: they would add a high proxy bid; but real bidders would suspect that this is the case by looking at his bidding history, and quit bidding.

Frontrunners bidding-up (blocking) to reserve (3-30 days stand by) domain/s and since they don't have any money, they'll spam around every target -company - prospect/s in a hope to reach an $ agreement / deal; we have domain for you for 5x 10x more $, or we'll bid in your name, or we'll represent you, etc.

Frontrunners doing this .... for years... not only in GDA but everywhere ... incl. f.e. stand by / aka order w/o payment or initiating negotiation @ Dan etc

Regards

 

[nametrekker]

I've purchased or won several domains in GD auctions this year --- I recall only 2 domains in auction that reflected "suspicious" activity ... I lost both domains...one, a bid that came in after conclusion of auction and another case that led to my informing GD about another domain I had placed a proxy bid

 

[Michael]

Some more interesting rollbacks:

1158․com from $113,000 to $30,500
MV․net from $37,555 to $1,025
TopWash․com from $7,000 to $415
ConnectApp․com from $5,700 to $370

 

[bmugford]

Some more interesting rollbacks:

1158․com from $113,000 to $30,500
MV․net from $37,555 to $1,025
TopWash․com from $7,000 to $415
ConnectApp․com from $5,700 to $370

A 2 letter .net for $1k.

What a joke.

GoDaddy needs to crack down on this BS.

Brad

 

[bmugford]

Let's keep an eye out for rollbacks on the current top results.

It seems implausible that all these bids are actually legitimate.

tais.com $14,750
98s.com $8,500
hx5.com $7,400

Brad

 

[zomainhacks]

Still no official comments by GD ?

 

[Furquan]

Still no official comments by GD ?

Maybe its summer time, on vacation?

 

[scithe]

Maybe if someone else who doesn't care about losing their main GD account wanted to create some shill accounts to push all of those dubious listings over $1,000,000 it would attract a lot more eyes and GD would have to fix it?

I feel like junior bloggers and the twitterverse would be rushing to share the news of these amazing legitimate sales at high prices. The writers and readers would eventually learn of the shill bidding. It wouldn't hurt the current thieves on their current auction but if instead of a dozen people on NamePros being aware, you have a thousand people from various sources all asking GoDaddy what's going on, maybe that would cause this to rise up on the issues to fix?

 

[Michael]

BQ․net from $37,500 to $1,630
7124․com from $14,000 to $5,100

 

[bmugford]

BQ․net from $37,500 to $1,630
7124․com from $14,000 to $5,100

So that is 2 LL.net that were rolled back into the $1K range.

Gee, I wonder if there is some funny business going on with the current auction MH.net at $57K.

or 1789.com at $110K
b66.com at $54K

or any the other CCC and NNNN at inflated prices.

Is @GoDaddy planning on doing anything about this?

@Paul Nicks @Joe Styler @James Iles

Brad

 

[pb]

There are at least four ways to deal with the situation where the winner doesn't pay:
1. offer the domain to the 2nd bidder for the closing price
2. offer the domain to the 2nd bidder for their best price (i.e. top losing bid)
3. offer the domain to the 2nd bidder for the price it would reach if the top bidder didn't bid (as I understand, this it what godaddy chose)
4. close the auction without selling the domain

Now we have to questions:
A. which method gives godaddy the most money
B. which method is the best for bidders

I believe the answer to #A is #3, and the answer to #B is #2.
The reason is that in scenario #2 there would be no incentive of shill bidding and in the odd case where the top buyer doesn't pay, the 2nd bidder might be happy to take the domain for their max offer - BUT also would not be obligated to, and then the transaction would fell through, with GD ultimately getting nothing. So all things considered they prefer getting $1k for a $5k domain that was bid up to $100k than risk getting nothing.

#1 is ok but lessens the chance of the 2nd bidder jumping on the opportunity; #2 is not great because the 2nd bidder might be disappointed to have been bidding against a frivolous party, but ultimately it's the price they offered and they will have a second chance to consider it and take or leave it (the obvious threat is shill bidding by the seller / auction house, but for the sake of the argument let's say GD wouldn't do this); #3 is nice in theory but will always end up getting exploited so in the end it only benefits the cheaters; #4 would just be a loss for everyone.

 

[okaydomains]

There are at least four ways to deal with the situation where the winner doesn't pay:
1. offer the domain to the 2nd bidder for the closing price
2. offer the domain to the 2nd bidder for their best price (i.e. top losing bid)
3. offer the domain to the 2nd bidder for the price it would reach if the top bidder didn't bid (as I understand, this it what godaddy chose)
4. close the auction without selling the domain

Now we have to questions:
A. which method gives godaddy the most money
B. which method is the best for bidders

I believe the answer to #A is #3, and the answer to #B is #2.
The reason is that in scenario #2 there would be no incentive of shill bidding and in the odd case where the top buyer doesn't pay, the 2nd bidder might be happy to take the domain for their max offer - BUT also would not be obligated to, and then the transaction would fell through, with GD ultimately getting nothing. So all things considered they prefer getting $1k for a $5k domain that was bid up to $100k than risk getting nothing.

#1 is ok but lessens the chance of the 2nd bidder jumping on the opportunity; #2 is not great because the 2nd bidder might be disappointed to have been bidding against a frivolous party, but ultimately it's the price they offered and they will have a second chance to consider it and take or leave it (the obvious threat is shill bidding by the seller / auction house, but for the sake of the argument let's say GD wouldn't do this); #3 is nice in theory but will always end up getting exploited so in the end it only benefits the cheaters; #4 would just be a loss for everyone.

JT from DomainSherpa said on their recent pod that at NameJet they would handle this by just re-registering the domain for a year once it had one real bid, and then just re-auctioning the domain if the winner didn't pay. Seems like the best way to handle this (and also notable that they were dealing with this same issue, and solved it, many years ago).

Better verification for high bidders would also help, by increasing the cost of the burned accounts.

 

[scithe]

Dynadot will charge bidder #2's credit card if the first bidder backs out. So there's not really an option there. I suppose that poses a small risk to bidders if you only had 5k to spend, were outbid on one listing at 5k and were bidding on a new domain also at 5k when you suddenly find out your card is being charged for the domain you thought you lost. It helps GD's bottom line though. Even if only 1 in 4 second bidders were able to complete the auction at a 5k top price, that would still be more profitable for GD than selling 5 of 5 domains at 1k each.

As far as the Domainsherpa idea, I think renewing would be a good idea, but I think when the original owner decides to renew at that stage, there's redemption fees as well and part of that is paid to ICANN isn't it?

 

[zomainhacks]

Someone can explain to me why GD doesn't seem interested in solving this major issue?

Don't have a clue, really

 

[Lord Antares]

Can this be considered fraudulent in the eyes of the law, by the way?

 

[zomainhacks]

Can this be considered fraudulent in the eyes of the law, by the way?

Don't know but for sure it damages the whole domain market considering how many expiring domains pass through GD auctions.

It is a market impacting issue.

 

[pb]

Can this be considered fraudulent in the eyes of the law, by the way?

Yes, not paying for the auction is a fraud and there are also laws in many countries against any action that results in money loss of another party or unjustified gains for the perpetrator. But these things would need to be reported and usually it's good to know who committed them in the first place. IANAL but I think you can't report them just because you were the third bidder and you feel deprived of the chance to buy the domain for a good price - it has to be someone who actually lost money, i.e. GoDaddy and perhaps the registrar of the domain (if it was a domain expired from a GD's partner registrar). In the case of "Dynadot will charge bidder #2's credit card if the first bidder backs out." I think the 2nd bidder could also report it but they might have a hard time collecting evidence to back the accusation...

 

[Lord Antares]

Yes, not paying for the auction is a fraud and also there are also laws in many countries against any action that results in money loss of another party or unjustified gains for the perpetrator. But these things would need to be reported and usually it's good to know who committed them in the first place. IANAL but I think you can't report them just because you were the third bidder and you feel deprived of the chance to buy the domain for a good price - it has to be someone who actually lost money, i.e. GoDaddy and perhaps the registrar of the domain (if it was a domain expired from a GD's partner registrar). In the case of "Dynadot will charge bidder #2's credit card if the first bidder backs out." I think the 2nd bidder could also report it but they might have a hard time collecting evidence to back the accusation...

Yeah, I was talking about godaddy. If they do back and find someone who participated in many fraudulent auctions, resulting in godaddy's loss of money, do they have a case?

Of course, I expect the smart ones use a fake identity and stealth paypal accounts (or whatever). That is not to say it's impossible to track them down.

 

[bmugford]

Yeah, I was talking about godaddy. If they do back and find someone who participated in many fraudulent auctions, resulting in godaddy's loss of money, do they have a case?

Of course, I expect the smart ones use a fake identity and stealth paypal accounts (or whatever). That is not to say it's impossible to track them down.

It would be pretty easy to go back and look at all the LL, LLL, LLLL, CC, CCC, NNNN, etc. that were rolled back.

If you start to look at these in detail, several seem to be in the same portfolios now.

Are the current owners actually involved in the scam, or are the scammers flipping them to those parties?

GoDaddy certainly has the resources to figure out what is going on, and fix it.

Brad

 

[silentg]

https://twitter.com/x/status/1684975050104168448

Screenshot if you can't see it:

 

[bmugford]

https://twitter.com/x/status/1684975050104168448

Screenshot if you can't see it:
Show attachment 243764

It is basically the best names, and specifically certain formats.

People are not using this scam to get $100 domains for $20. They are using it to get domains worth thousands, or tens of thousands, for peanuts.

GoDaddy needs to do more than some random quote on Twitter.

This is a problem that has been going on for years.

This issue causes damage to legitimate bidders, their venue, and the domain industry itself.

At this point the auction results are highly questionable.

Does anyone really believe current auction MH.net is going to get paid for at the current top bid of $57K+, when two other LL.net were rolled back into $1K range? How about the top bidder on 1789.com at $110K+, or all the other CCC and NNNN.

These rollbacks of valuable domains make it nearly impossible to trust the auction results.

Brad

 

[silentg]

drop the ban hammer on them. Ban them from Dan / Afternic and GoDaddy