More Fraudulent Bidding Activity at DropCatch.com

[Arca]

DropCatch.com just can't get rid of fraudulent bidding activity on their platform. Fraudulent bidders bid up prices, don’t pay when they win, and then the names are re-auctioned again and again until a legit bidder wins.

It is a win-win system for DropCatch. If the fraudulent bidders bid up a legit bidder, DC cash out even more thanks to the fraudulent bidder driving up the price beyond where it would have gone with only legit bidders. If the fraudulent bidder wins, they simply hold and re-auction the name over and over until they get a legit bidder that pays. It's a problematic system for regular bidders, because before these fraudulent bid handles get suspended, they bid up legit bidders in various auctions.

DropCatch's system enables them to get paid for names even with so many fraudulent non-paying bidders on their platform. But even with this auction restarting system in place, there are simply so many fraudulent bidders that they sometimes struggle to find a legit winner, despite multipe re-auctions. Take CannaMarket.com. The domain has already been won by THREE DIFFERENT fraudulent bidders. The first winner, in the original auction, was fraudulent. The name was re-auctioned. The second winner was fraudulent. The name was re-auctioned. The third winner was fraudulent (he bid the name up to $4K). When a name can score a triple fraudulent bidder combo streak on their platform, with no legit winner in sight, it’s clear that there is something wrong with how their system works. They are currently holding cannamarket.com in a dropcatch.com holding account, and I wonder whether they will try to re-auction the name a fourth time, or just let it drop since this is obviously a bad look for them when three out of three attempts of auctioning off the name ended up with fraudulent bidding activity (and who is going to be brave enough to bid against all the fraudulent bidders in a fourth auction? This name is apparently a fraud magnet).

Then there was this auction for lumeo.com recently (it was bid up to $14K by a bidder that most likely is fraudulent, and the winner has not yet paid, and the payment deadline passed a few days ago). How long until this name gets re-auctioned due to fraudulent bidding activity?

I often get emails from dropcatch saying "due to complications involving potentially fraudulent activity, the following auctions you had participated in are being restarted". A quick search shows an inbox full of emails notifying me of fraudulent bidding activity and auctions being restarted:

I just received another one today. It contained another SEVEN auction names that closed recently with fraudulent bidding activity:

cybercorp.com - Sold for $1251
sefin.com - Sold for $665
devlog.com - Sold for $343
thermair.com - Sold for $457
simplypretty.com - Sold for $515
finte.com - Sold for $350
kinovo.com - Sold for $330

All these auctions involved fraudulent bidding, and have now been restarted (you can go to dropcatch.com and bid on them right now). A quick visit to the dropcatch.com website shows a other restarted auctions as well, such as for evinite.com (sold for $142) and acercloud.com (sold for $370). Will legit bidders win these restarted auctions this time around?

DropCatch.com is very much like a game of hot potato, where fraudulent bidders bid up auctions and don't pay when they come out winning. There is a significant amount of auctions being restarted due to winners not paying up, when compared with other expired domains auctions platforms. The result is that legit bidders have to pay, literally, for the presence of so many fraudulent bidders on this platform that bid up the prices for legit bidders. Just an advice for everyone to be aware of this issue when participating in auctions at dropcatch.com.

 

[wwwweb]

NameJet makes names with more than 3 backorders public to everyone (also via API), and keep those with 3 or less private/hidden from the view of other during pre-drop period.

So asking dropcatch to send domains with 2-3 backorders to private auctions, and send the ones with 4 or more to private auctions seems like a reasonable suggestion to me. The frustration with dropcatch outlined by @main is certainly real.

What you say totally makes perfect sense in a perfect world.

The Reyberry's are simply going to do what makes them the most money, so more access, more bidders, more money.

These exchanges are running on slipperly slopes you have people at namejet bidding on their own auctions without shame, as long as they don't meet their own known reserves.

You have a domain at dropcatch that takes more than 3 reauctions to sell it, and it still can't find a legit bidder.

It seems the auction houses have figured the way to profits is thru a lack of internal controls.

 

[Jasonn]

I don't get why people bid without intentions of paying. What are they getting out of it? Are they hoping the price will be lower next time? Jealous broke people? It makes little sense to me.

 

[DropCatch Support]

Another great suggestion, along with the other suggestions of closed auction formats and of limiting higher bid amounts to pre-funded account funds - lots of great suggestions for @DropCatch Support - but will we see any changes?

We appreciate your concern regarding fraudulent bidding on our platform and understand as a user you may have concern. I can assure you the percentages I provided are an accurate representation of the reauctions on our platforms, and to assume they are inaccurate would require data on how many auctions occur on our platform. We don’t release such information, nor do we release user backorder information. Additionally, DropCatch is aware of the circumstances that resulted in all reauctions in the month of October, as we investigate all fraudulent behavior and we can assure you that the instances of re auction were not a result of users who have “bid up” multiple auctions.

As I have previously stated, we closely monitor this behavior and have not witnessed an increase in re-auctions on our platform in comparison to historical data. Even still, we are taking extreme care to establish additional guidelines for verification as we aim to ensure our auction platform is a valuable platform for all users. We appreciate feedback and always welcome user comments, however DropCatch will not be moving to a closed auction platform.

While we understand additional verification is a high priority for you we do have to ensure the integrity of our site for all users, and we take all user concerns very seriously. We are monitoring and adjusting our verification practices to decrease the rate of reauctions, however as I have stated, the rate at which domains are being reauctions has not increased in comparison to historical data, and the percentages we have provided are an accurate representation of the actual rate of reauction on our site.

We are not able to prevent the re-auction of domains entirely, as much as we wish we could. We reauction domains specifically to ensure fair outcomes to all users when fraudulent behavior is identified. We have always taken measures to notify our users when a domain name they are interested in is being reauctioned.

Once again, I understand your concern regarding fraudulent bidding and auctions on DropCatch, and once again, I want to ensure you we take the issue very seriously. We are continuously working to reduce and prevent such outcomes to the best of our abilities. You are always welcome to contact us directly.

 

[wwwweb]

I don't get why people bid without intentions of paying. What are they getting out of it? Are they hoping the price will be lower next time? Jealous broke people? It makes little sense to me.

Some people are attempting to flip the domains for profit before the auction ends, others are messed up, or get carried away and can simply walk away without recourse, so what does it matter.

The House's stance on it is, the a mix of messed up bidders with legit bidders, make for great profit margins, so why do anything about it.

 

[main]

Having a private auction for re-auctions with only the original bidders makes so much sense.

 

[tonyk2000]

We are not able to prevent the re-auction of domains entirely

We appreciate feedback and always welcome user comments, however DropCatch will not be moving to a closed auction platform

Should it be undestood that DropCatch will elect not to re-auction most of fraudulent auctions, or, in other words, will transfer the domains in question to hugedomains, or some holding account or similar, for undetermined period of time? This way users will stop complaning and this and similar threads will naturally die.

 

[wwwweb]

Should it be undestood that DropCatch will elect not to re-auction most of fraudulent auctions, or, in other words, will transfer the domains in question to hugedomains, or some holding account or similar, for undetermined period of time? This way users will stop complaning and this and similar threads will naturally die.

Sure, sounds good, but then they will have to hold most of the names forever, and not be able to collect thousands upfront. Add it to the 3 million, and growing.

 

[DropCatch Support]

Should it be undestood that DropCatch will elect not to re-auction most of fraudulent auctions, or, in other words, will transfer the domains in question to hugedomains, or some holding account or similar, for undetermined period of time? This way users will stop complaning and this and similar threads will naturally die.

No. We will not be altering our reauction process. We understand the frustration of some users, however we will not be altering the process or intervening in the reauction of domains. Domains that are not paid for by the winning bidder will return to auction and the winning bidder of the original auction will be indefinitely suspended from our platform.

 

[wwwweb]

No. We will not be altering our reauction process. We understand the frustration of some users, however we will not be altering the process or intervening in the reauction of domains. Domains that are not paid for by the winning bidder will return to auction and the winning bidder of the original auction will be indefinitely suspended from our platform.

"Domains that are not paid for by the winning bidder will return to auction and the winning bidder of the original auction will be indefinitely suspended from our platform."

Until they wake up the next morning, and make a new account

 

[Asfas1000]

One bidder can do a lot of damage

 

[wwwweb]

One fraudlent bidder who has no intention on following thru can do even more damage

 

[Jasonn]

No. We will not be altering our reauction process. We understand the frustration of some users, however we will not be altering the process or intervening in the reauction of domains. Domains that are not paid for by the winning bidder will return to auction and the winning bidder of the original auction will be indefinitely suspended from our platform.

Perhaps more verification is needed to ensure people aren't able to sign back up again.

 

[wwwweb]

Perhaps more verification is needed to ensure people aren't able to sign back up again.

That sort of action would show a decline of profits for dropcatch, doesn't make sense from a corporate perspective. Best course of action is status quo, nothing changes, this would yield the highest amount of profit. As you can see from the response above, and the 3 reuactions of cannmarket.com they are working very hard to stop this sort of activity, they have their best agents on it.

It is the users who need to police themselves, if they are to protect themselves from being bidded against by deadbeat bidders.

You cannot expect the exchange to have your best interests at heart, usually companies put their bottom dollar first.

 

[Kate]

Some people are attempting to flip the domains for profit before the auction ends, others are messed up, or get carried away and can simply walk away without recourse, so what does it matter.

That's it. The old practice of frontrunning.

It is not only unethical but misrepresentation (and most likely illegal) to sell something that you don't own and don't have permission to sell. Sometimes it can even backfire and trigger UDRPs or legal threats. It can also put the winning bidder in a difficult position with tainted merchandise on their hands, cause they don't know the dirty stuff that has been going on behind the scenes.

 

[wwwweb]

That's it. The old practice of frontrunning.

It is not only unethical but misrepresentation (and most likely illegal) to sell something that you don't own and don't have permission to sell. Sometimes it can even backfire and trigger UDRPs or legal threats. It can also put the winning bidder in a difficult position with tainted merchandise on their hands, cause they don't know the dirty stuff that has been going on behind the scenes.

Can you imagine paying thousands for a domain that has a TM, albeit in a different class, but still useable, and some clown sends a bunch of bad english emails to these mark holders, and by the time the auction is over, and you paid, you are greeted with a UDRP.

All these things have to be discounted into your bids, people are paying above, and beyond not factoring in any downside risk. Even when you buy a 3L.com, you have to set aside about $5K in legal fees in case someone ever tries to reverse hijack it.

 

[Jasonn]

That sort of action would show a decline of profits for dropcatch, doesn't make sense from a corporate perspective. Best course of action is status quo, nothing changes, this would yield the highest amount of profit. As you can see from the response above, and the 3 reuactions of cannmarket.com they are working very hard to stop this sort of activity, they have their best agents on it.

It is the users who need to police themselves, if they are to protect themselves from being bidded against by deadbeat bidders.

You cannot expect the exchange to have your best interests at heart, usually companies put their bottom dollar first.

In that case, bottom line is don't use dropcatch if you don't want to overpay due to fraud bidders.

Is there anyone keeping track of these bidders who fail to pay? Do they always fail to pay or do they win and pay as well? If they come along, rack up auctions and when they actually win one, disappear, that makes me suspicious as to who is behind the bidding alias.

 

[Arca]

These auctions were cancelled due to fraudulent bidding activity (non-paying winners) and restarted. Below are the original auction results (where winners turned out to be "fraudulent", so these prices were never actually paid by the winners). They also restarted two other .com auctions due to fraudulent bidding that also ended today, but I was not able to catch what they ended at this time, but here are those where I caught with the final sales prices for comparison:

Original auction results:
cybercorp.com - Sold for $1251
sefin.com - Sold for $665
devlog.com - Sold for $343
thermair.com - Sold for $457
simplypretty.com - Sold for $515
finte.com - Sold for $350
kinovo.com - Sold for $330

Oct 31, RE-auction results (auctions over but pending payments - green indicates higher price than the first auction, red indicates lower price):
cybercorp.com - Sold for $2,051
sefin.com - Sold for $628
devlog.com - Sold for $210
thermair.com - Sold for $550
simplypretty.com - Sold for $388
finte.com - Sold for $324
kinovo.com - Sold for $411

 

[wwwweb]

These auctions were cancelled due to fraudulent bidding activity (non-paying winners) and restarted. Below are the original auction results (where winners turned out to be "fraudulent", so these prices were never actually paid by the winners). They also restarted two other .com auctions due to fraudulent bidding that also ended today, but I was not able to catch what they ended at this time, but here are those where I caught with the final sales prices for comparison:

Original auction results:
cybercorp.com - Sold for $1251
sefin.com - Sold for $665
devlog.com - Sold for $343
thermair.com - Sold for $457
simplypretty.com - Sold for $515
finte.com - Sold for $350
kinovo.com - Sold for $330

Oct 31, RE-auction results (auctions over but pending payments - green indicates higher price than the first auction, red indicates lower price):
cybercorp.com - Sold for $2,051
sefin.com - Sold for $628
devlog.com - Sold for $210
thermair.com - Sold for $550
simplypretty.com - Sold for $388
finte.com - Sold for $324
kinovo.com - Sold for $411

Dropcatch made an extra $651 the second time around, who says deadbeats are bad for business.

 

[tonyk2000]

We are exploring additional methods of verification to help us reduce the number of re-auctions on our platform.

What makes DropCatch think that all fraudulent bidders necessary need to setup new fresh accounts each day? Wouldn't it be more logical for these bidders (assuming that they all are the same people in fact, as was reasonably guessed before in this thread) to already maintain a set of accounts (dozens, hundreds, whatever), all verified, with fake details of course, and use new pre-configured "identity" each time they wish to bid?

So, it appears that all measures explained by DropCatch in this thread:

(1) will not decrease fraudulent activity in any aspect

(2) will decrease a number of legitimate endusers who may be willing to bid just once on a single particular domain. Simply because it would become harder for them to validate their "fresh" account.

With (2) in place, as a domainer I can only appreciate the measures announced by DropCatch. In a short run.

But, in a long run - should more and more legitimate domainers elect to avoid DropCatch, its auctions system will be converted to a competition venue between various groups of fraudsters who do not intend to pay unless they already "secured" a buyer as part of frontrunning activity. Sorry to write this, but it is very likely.

 

[wwwweb]

Just for fun let's take the Aug 6th winner of cannamarket.com WITTYNUT who did not pay for the auction


https://www.linkedin.com/in/jhurkmans/

Title Name Address

Gg Groep Llc was registered under company Id E0035292014-4 and Nevada Business Id NV20141047516. This company type is Domestic Limited-Liability Company. This business was created three years, nine months and five days years ago - on 2014-01-22. Current company status is Active.
Managing Member Jason G Hurkmans 419 Main St., #11, Huntington Beach, 92648, Ca
Managing Member Jason G Hurkmans 226 W. Ojai Ave. Ste 101-274, Ojai, 93023, Ca


There whois used to read as this:

[email protected]

Doing Right Development
Address 419 Main St. 11
City Huntington Beach
State California
Country

United States
Phone +1.7142027688


It seems they have switched the whois on their domains over to another name:

Registry Registrant ID: Not Available From Registry
Registrant Name: Managing Director
Registrant Organization: gg Groep LLC
Registrant Street: 226 W. Ojai Ave. Ste 101-274
Registrant City: Ojai
Registrant State/Province: California
Registrant Postal Code: 93023
Registrant Country: US
Registrant Phone:
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:

This person bid up many of your honest paying members, to which you show very little concern. What happens to all the other valid bids that were made in 2nd, and 3rd position by this person, will you be refunding your core customers?


So Dropcatch, why don't you send a message, and take legal action against this person, and maybe scare some deadbeat bidders straight for payment for the auction they bid on?

I did all the work for you, now all you do is set an example, but as we all know you probably won't do anything, because people like this are great for business.

 

[tonyk2000]

Yes, it may well be that this Jason guy won an auction and elected not to pay.

It is also possible that a fraudster used random name from a phonebook or another public source, which happened to be this Jasons name and company, also submitted photoshopped California drivers licence to DropCatch, and, resultingly, added one more account to his collection of dropcatch accounts. Indeed, he was approved as the result. Why not? The name is in a public phone directory! Of course the fraudster could not enter "1 moon street, city of venus" in account details. And he might also add prepaid debit/gift card, without any issues, such cards do work with any name and billing address (by design).

What DropCatch is missing is that their whole system of open auctions without obligatory pre-funding is open to all sorts of frauds. Which they are trying to fix, but just cosmetically. It is "cat and mouse" game. And, unfortunately, mice will likely win, as they have nothing to lose.

 

[wwwweb]

Yes, it may well be that this Jason guy won an auction and elected not to pay.

It is also possible that a fraudster used random name from a phonebook or another public source, which happened to be this Jasons name and company, also submitted photoshopped California drivers licence to DropCatch, and, resultingly, added one more account to his collection of dropcatch accounts. Indeed, he was approved as the result. Why not? The name is in a public phone directory! Of course the fraudster could not enter "1 moon street, city of venus" in account details. And he might also add prepaid debit/gift card, without any issues, such cards do work with any name and billing address (by design).

What DropCatch is missing is that their whole system of open auctions without obligatory pre-funding is open to all sorts of frauds. Which they are trying to fix, but just cosmetically. It is "cat and mouse" game. And, unfortunately, mice will likely win, as they have nothing to lose.

I would say random would be an option but the fact wittynut liked, and bid on marijuana type domains, cross referenced against his linkedin, and other profiles, looks like his eyes were bigger than his bank account.

I get your point on fake profiles, which is valid, but in his LinkedIn he addresses himself as a domain investor, among cannabis expert etc, along with owning about 500 hemp type domains.

This person also bid on many other auctions, and lost sometimes bidding others up hundreds of dollars. This is the sticking point.

 

[tonyk2000]

Domain investor and cannabis expert at the same time? An interesting combination. Hope DropCatch will be able to take legal action against this person if it is his real identity.

 

[Arca]

Two more auctions cancelled and restarted due to non-paying bidders at DropCatch

skypop.com - sold for $344 on 22 October - Winner did not pay. Auction has now been restarted.

The auction for menuto.com has also been restarted today. The domain was originally caught on Oct 19 and the auction closed on Oct 22. What is notable about this auction is that it only has one bidder (for a domain to go to a public auction it needs to have two or more backorders in place). I assume the other person who had the other backorder for this name won it, didn't pay, and now the auction has been restarted with the bid of the remaining original backorder holder.

 

[wwwweb]

Domain investor and cannabis expert at the same time? An interesting combination. Hope DropCatch will be able to take legal action against this person if it is his real identity.

Well CannaMarket was a $4K non payment, which is significant enough, I am not sure what else he would have been able to default on. The more concerning thing was I saw in a few other auctions this person bid up others sometimes upto hundreds of dollars, in the CannaMarket is was thousands.

Dropcatch directly profited from this deadbeat, and his intentions not to pay, their customers are left to pay the price for their lack of internal controls to stop such financial crimes from being committed.