'Halvarez' at Snapnames auctions uncovered

[prague7]

Ooer - this one's going to run for a while... :O

From DomainNameNews:
SnapNames User Name “Halvarez” Was Nelson Brady, VP of Engineering Bidding on Domain Names [Updated]

[Updated] According to a statement from Oversee.net’s SnapNames, an employee was found to have bid in 5% of their auctions since 2005 and in some cases arranged for a partial refund of the sales price after winning an auction. DNN also confirmed the bidder as Nelson Brady, the VP of Engineering. He was bidding under the username “halvarez”.

From Snapnames:
SnapNames User Name “Halvarez” Was Employee Bidding on Domain Names

To avoid any question about whether the company benefited from this conduct, SnapNames will offer a rebate to impacted customers, including 5.22% interest (the highest applicable federal rate during the affected time period), of the difference between the prices they paid in winning auctions, and the prices they would have paid had the employee not bid in the auctions. Impacted customers will be notified by SnapNames or its representative with instructions for the offer of a rebate.

SnapNames also has taken further action to ensure its policies regarding auctions are followed, and the company remains committed to taking whatever action is necessary to protect the integrity of its auction platform.

SnapNames deeply regrets this situation and is committed to addressing its customers’ needs quickly and fairly.

There's also a FAQ page at Snapnames

 

[nomak]

I knew it!

 

[wellmanneredsquirrel]

That's good damage control.. took them 4 years but compensation seems fair + they take the iniative of finding the scammed customers and paying the rebates.. no need for bidders to go thru the list of impacted auctions and filing an online form demanding a rebate etc...

+ try to find 5.22% in 2009 !

 

[telking]

another reason why i have always believed ALL of these companies are shady.

so what ARENT they telling us...

 

[QualityNames.com]

 

[MicroGuy]

A sad day for the domaining industry. I think this goes on a lot more than we are aware. I've seen some pretty shady bidding at other auction houses too.

 

[Oversee Rob]

An important message from SnapNames

Recently, SnapNames discovered that an employee had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions. This is a clear violation of our internal policy and was not approved by the company. We deeply regret that this conduct has impacted our customers.

Extent of impact

This conduct affected a small percentage of SnapNames auctions:

· Bidding affected approximately five percent of total SnapNames auctions since 2005, most of which occurred between 2005 and 2007.

· The incremental revenue from the bidding represented approximately one percent of SnapNames’ auction revenue since 2005.


No matter the level of impact, SnapNames takes this matter extremely seriously. When the matter was discovered, the company immediately closed the account in question and began a thorough investigation. The employee has also been dismissed from the company.

SnapNames further discovered that, on certain recent and limited occasions, when the employee won an auction, the employee secretly arranged to refund from SnapNames to the fictitious account a portion of the winning bid amount.

Remedy to affected customers

Though on some occasions the employee won the auction, in many instances the bidding caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction.

SnapNames neither condones this conduct nor wants to be perceived as benefiting from the conduct. Accordingly, we have decided that regardless of the circumstance, in every auction where the employee’s fictitious account submitted a bid which resulted in a higher price being paid by the winning bidder, SnapNames will offer a rebate, with 5.22% interest (the highest applicable federal rate during the affected time period), to affected customers for the difference between the prices they actually paid and the prices they would have paid, had the employee not bid in the auctions. The rebate will be available in cash or in credit on the SnapNames platform, at your discretion.

SnapNames has moved quickly to address this situation. The company has retained Rust Consulting, an independent third party, who will administer the rebate offer. Within the next week, Rust Consulting will contact affected customers to provide details regarding the offer.

Your business and ongoing relationship are important to us and we can assure you that we have taken all necessary steps to ensure the integrity of the platform and reinforced controls and procedures to avoid any possibility of further breach. These include:

· Enhanced monitoring of bidding activity for suspect behavior

· Additional controls over financial transactions

· Specific domain name registration policies for employees

In the meantime, if you have any questions, you may consult the FAQs here, or contact the SnapNames support team:

By e-mail: [email protected]

Phone: +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)

SnapNames, and all in the Oversee family of companies, are deeply disappointed with this incident. Since its founding in 2000, SnapNames has been committed to the principles of fairness and trust; the company wants to assure customers—through both words and actions—that it remains committed to those principles.

Thank you again for your business, and for your ongoing trust in SnapNames.

Rob McClinton
Oversee Support

 

[MicroGuy]

Were is the double line? Hehe

 

[metrisoft]

I honestly wouldn't be surprised if this happens or has happened at a lot of the aftermarket auction sites (possibly even secretly condoned by the company). I see a lot of bidding activity that doesn't seem rational.

 

[bmugford]

This is very bad. I have a suspicion of the name of the shill bidder's account.

Brad

 

[MicroGuy]

Accordingly, we have decided that regardless of the circumstance, in every auction where the employee’s fictitious account submitted a bid which resulted in a higher price being paid by the winning bidder, SnapNames will offer a rebate, with 5.22% interest (the highest applicable federal rate during the affected time period), to affected customers for the difference between the prices they actually paid and the prices they would have paid, had the employee not bid in the auctions.

Nice idea but, it will be impossible to determine what the winning bidder would have paid had the shill bidding not taken place. This is due to the fact that the shill bid could have attracted additional bidders who otherwise would not have participated (or increased their bid amounts), and those additional bidders would have also contributed to the higher sales price. IMO.

 

[NameCharger]

Is the nick of this shill bidder being disclosed?

 

[MicroGuy]

Is the nick of this shill bidder being disclosed?

'halvarez'

 

[bmugford]

It should be. There can not be full disclosure without this information.

Brad

Is the nick of this shill bidder being disclosed?

---------- Post added at 02:35 PM ---------- Previous post was at 02:34 PM ----------

Yeah, well that is my guess as well.

Somehow he was always the second bidder in any auction that would have otherwise been a straight backorder.

He would rarely bid, but when he did he would make irrationally high bids on turd domains.

Brad

'halvarez'

 

[has2hands]

He accounted for 1% of revenue over the years...that is huge.

when the employee won an auction, the employee secretly arranged to refund from SnapNames to the fictitious account a portion of the winning bid amount.

What does that mean? that's another huge black hole!

stay tuned.........more to come.

Paul

 

[D0MA1N]

We all knew about it, but could not prove. It remains only to find out how many people continue to raise bids artificially.

 

[HappyBunny]

When did you discover this conduct?
In October 2009.

How long had this been going on?
Since March 2005.

What took them so long???

 

[cmason]

Personally, I think that SnapNames is taking the appropriate action to correct the fraudulent bidding. It is a shame that it took this long, but the initial press release has been quite open. There is no doubt in my mind that this is going to be quite costly for SnapNames, but again, it is needed action.

 

[MicroGuy]

I think the only fair thing to do would be to give the domain to the winner at the standard backorder price or his initial bid price which ever is greater. IMO.

 

[deleted984054565403]

'halvarez'

Is that confirmed? I always had a feeling that was a fake account.

 

[bmugford]

I am glad SnapNames.com is disclosing this, but I have questions about how it it could take 4+ years for them to discover this.

I wonder if this was more of a case where they were caught somehow, and then they came clean.

If the user is "Halvarez" there have been many discussions over the years about his bidding activity on domain forums. If it is not, then Snap needs to disclose the username.

Brad

 

[tetrapak]

'halvarez'

If that's him, then Snapnames owes me $x,xxx+

 

[deleted984054565403]

Below the double line is the customer communication for use in proactive disclosure on industry message boards. A statement needs to be published on each of the boards copied in the attached e-mail from this morning. Disclosure time is 9:30 a.m. PT, concurrent with all other disclosures.

Please monitor the boards going forward and let me know what the feedback is like. If you need help on this, Corinne is available.

My understanding is you will primarily speak for the company in these forums. To that end, let’s coordinate closely on what’s being said and how to reply.

Let me know if you have questions from here. Thanks.

Oops.

 

[deleted984054565403]

another reason why i have always believed ALL of these companies are shady.

so what ARENT they telling us...

I commend SnapNames for revealing this info to us; this makes me trust them a little more, though I am still very disappointed to learn this. I don't understand why it would take four years to investigate something like this.

 

[bmugford]

If that's him, then Snapnames owes me $x,xxx+

It is "Halvarez"

SnapNames User Name “Halvarez” Was Employee Bidding on Domain Names | Domain Name News

Brad

---------- Post added at 02:44 PM ---------- Previous post was at 02:42 PM ----------

There have been several threads about "Halvarez" over the years. SnapNames.com taking 4+ years to discover this is ridiculous.

Here are two such threads about "Halvarez" of many -

why is halvarez...... - DNF - Domain Sales, Domain Forum, Domain Appraisals, Domain Registrars

http://www.namepros.com/domain-name-discussion/163933-whats-good-tactics-beating-guy-snapnames.html

Why was this not investigated at the time?

Brad