discuss Have you ever been scammed by a domain broker?

[mr.mu]

For example:

A broker comes to inquire about one of your domain names and closes the deal for $5,000 (and takes your 20% commission)
In reality, the buyer paid $10,000 for the domain
You end up netting $4,000 and the broker gets a $5,000 difference and a $1,000 commission.

Several friends around me have personally experienced this kind of thing. After the transaction was completed,
They found the contact information of the buyer, contacted the buyer and learned the amount the buyer finally paid for the domain name, and found that they were scammed by the broker.

This may be the rule of the game in the domain name industry.

May I ask if you have encountered or heard of similar things, welcome to discuss.

 

[dirk]

it would be unethical to represent both the buyer and seller in such a way as you cannot negotiate two clients against each other for the best financial outcome for both.

Mind you, depending on where you are located, this could not just be unethical but illegal.

 

[FredMercaldo]

GOOD FOR YOU!!!

If the broker worked for a company, hopefully the company they were associated with was duly informed. You could share how puzzled you were about the broker using such creative selling tactics!

Perhaps that broker would be more suited to flipping burgers rather than domains?

There was another incident a year later. I severed ties with the broker; stayed with the registrar, and the broker apologized and stopped what he was trying to accomplish, which was enter into a very competitive venture against one of my main businesses. I understand now that their corporate counsel demanded that the incident "go away." I had no desire to get the person terminated or sue the organization; but just a real eye opening experience.

 

[LoveCatchyDomains]

There was another incident a year later. I severed ties with the broker; stayed with the registrar, and the broker apologized and stopped what he was trying to accomplish, which was enter into a very competitive venture against one of my main businesses. I understand now that their corporate counsel demanded that the incident "go away." I had no desire to get the person terminated or sue the organization; but just a real eye opening experience.

That was very kind of you, to not have the desire to see the broker terminated. The question is whether that individual will harm others who aren't are savvy as you are.

Hopefully, the registrar put the necessary oversight to prevent this from happening again.

 

[LoveCatchyDomains]

Domain spoofing is a form of phishing where an attacker impersonates a known business or person with fake website or email domain to fool people into the trusting them.

A domain broker who who fools people into trusting them is no better than that. Thank heavens for the honest ones, though...and escrow.com transparency to help promote that trust!

 

[magnificentdomains]

No, I have never encountered this. When a broker reaches out to me they have connected me directly to the buyer, we then close the deal and when the transaction is finished I wire the broker his commission. There have also been times when the buyer and myself split the brokers commission. In both cases I am in direct contact with the buyer and the sale amount is fully disclosed to all parties.

 

[LoveCatchyDomains]

No, I have never encountered this. When a broker reaches out to me they have connected me directly to the buyer, we then close the deal and when the transaction is finished I wire the broker his commission. There have also been times when the buyer and myself split the brokers commission. In both cases I am in direct contact with the buyer and the sale amount is fully disclosed to all parties.

You are very wise, to work with only with brokerage arrangements that have the full transparency. Glad to hear about your good experiences.

 

[John and Jenny]

I've heard there are brokers who take commission from both sides - sell & buy.

Isn't that unethical?

 

[LoveCatchyDomains]

I've heard there are brokers who take commission from both sides - sell & buy.

Isn't that unethical?

If both sides agreed to split or pay the commission, that would be fine.

If the broker is duplicitous, and unwittingly charging both, that would perhaps not simply be unethical, but also potentially criminally fraudulent depending on how the contract is worded.

Hopefully, there are standards maintained at brokerages that provide very clear guidelines AND appropriate oversight, to make certain that the expectations and contractual obligations are being met.

An independent third party, such as Escrow.com, could eliminate any concerns about duplicitous actions. Their full transparency option for use with a broker would be a good reassurance, especially if the buyer and seller do their transactions directly through the Escrow.com website, not through links in emails sent by the broker.

 

[woncent]

This may be the rule of the game in the domain name industry

 

[oberheimer]

That's why you should find the end user yourself. I have heard brokers buying names when they already have a buyer at 6 x the price. Some brokers even impersonate other companies to make you think they are a different company to make a good deal. They own a similar name to a different company with a - or an s at the end. They send the traffic to that other company and use the domain name only for e-mails. The brokers use someone who is not known in the business to try to make you think the name is worth less than it is. There are only a few I trust in the industry.

 

[oberheimer]

Some might even list your name for sale without your permission and send out sales newsletters before they make an offer on your name.

 

[oberheimer]

You used to be able to settle deal with a handshake and that was it. Now that's the least thing you need to worry about. Some broker just contacted me. She only has her name in the email. No information about the brokers in the webpage. Only 3 deals they have supposedly done. I can verify 2 of them. According to ** journal. Why are the brokers hiding?
It says butique broker, like a small personal broker I guess. But there is nothing personal if they hide.

 

[equity78]

My company insists on "principals only" to avoid this potential situation (and for other reasons).

You can see what transpired in the VPN.com / Dikian (ongoing) lawsuit, see:

https://onlinedomain.com/2022/07/28...s-26-million-lawsuit-against-domain-investor/

https://www.courtlistener.com/docket/63559525/vpncom-llc-v-george-dikian/

https://www.namepros.com/threads/vpn-com-llc-has-filed-a-multimillion-lawsuit.1279551/

for a public example of the inherent problems of "dual agency". See the response in the lawsuit:

https://storage.courtlistener.com/recap/gov.uscourts.cacd.855964/gov.uscourts.cacd.855964.33.0.pdf

which mentions it.

Why is dual agency illegal in some states?


This is known as dual agency, when one real estate agent represents both the buyer and seller in a house sale. In some states, this isn't allowed because a real estate agent can't effectively represent the best interests of both sides of a real estate sale.


https://www.quickenloans.com/learn/dual-agency-is-illegal-in-some-states

Dual agency is illegal in the following eight states: Wyoming, Alaska, Vermont, Colorado, Flroida, Maryland, Texas, and Kansas. All the other states and the District of Columbia, permit dual agency. Even so, dual agency is not dominant in these states.

Of course this pertains to Real Estate which is much more highly regulated.

 

[equity78]

Now a place like Heritage Auctions gets paid both by the buyer and seller. The buyer pays a buyers premium and the seller a commission.

 

[DomainRecap]

In my opinion, this is not a scam

It is certainly a scam on the seller as the "broker" is not fully disclosing the actual purchase price.

 

[equity78]

@Michael

My company insists on "principals only" to avoid this potential situation (and for other reasons).

You can see what transpired in the VPN.com / Dikian (ongoing) lawsuit, see:

https://onlinedomain.com/2022/07/28...s-26-million-lawsuit-against-domain-investor/

https://www.courtlistener.com/docket/63559525/vpncom-llc-v-george-dikian/

https://www.namepros.com/threads/vpn-com-llc-has-filed-a-multimillion-lawsuit.1279551/

for a public example of the inherent problems of "dual agency". See the response in the lawsuit:

https://storage.courtlistener.com/recap/gov.uscourts.cacd.855964/gov.uscourts.cacd.855964.33.0.pdf

which mentions it.

Do you think that cuts down on offers George? Plus most like 99.8% of the industry do not have the portfolio you have and be able to place such restrictions on negotiations.

Thank you

 

[GeorgeK]

@Michael

Do you think that cuts down on offers George? Plus most like 99.8% of the industry do not have the portfolio you have and be able to place such restrictions on negotiations.

Thank you

Perhaps, but motivated buyers (the only buyers that really matter) shouldn't be impacted.

If a person is perturbed by the idea of having a level playing field for discussions/negotiations, that isn't really a serious inquiry, in my opinion, but simply represents an opportunist looking to prey on the uninformed. That kind of person/entity is just a time-waster.