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.

 

[Jasonn]

globalenergy.com not yet paid for ..

 

[wwwweb]

These are misconceptions about what took place in this auction. I'll try to clarify about these bidders.

Firstly, Warlord is a Portugese domain investor. So far he has paid for other won auctions, though his extremely volatile bidding patterns are quite noticeable if you bid on DropCatch. Someone said he loved the domain and overbid. That does not explain why he didn't "love" it anymore two weeks later. Nobody but him knows his exact motivation for bidding up to $14K. As he went from making a $14K bid to not bidding above $59, it possible that he was trying some kind of front running scheme too.

Secondly, Golumeo is confirmed a domainer and frontrunner, not an end-user. Golumeo “impersonated” g o l u m e o (.) com to scare off domain investors (the logic behind that: if you outbid this end-user, you can’t sell it to them for a profit anyway - but the participation of an unpredictable bidder like warlord meant that strategy had no effect). The end-user company of the same name have confirmed that this was not them, but they were contacted by someone trying to sell them the name for $32,000. So someone attempted a $14K to $32K flip. No end-users took the bait at $32K and golumeo defaulted on the payment.

Thirdly, the second re-auction was won by a Chinese domain investor (kamisama), and second highest bidder was also a domain investor (greenmountain). These two auctions have been game between domain investors and frontrunners seeking to make a profit. End-users have been entirely absent from both the original auction and the re-auction.

Even if the end user company did a soft acceptance of $30K, were these guys going to front the $14K within 4 days of auction win, as they would need to control the domain to get funded. Even if they bought the domain, I believe golumeo.com does have a TM, and they could turn around, and file a UDRP with a fresh reg date, and most likely, no defence and their solicitation emails in hand they had a good shot.

We have seen godaddy in auction kill crazy bids while it is ongoing, did nobody at Dropcatch who taking out private bidder auctions has about 20-25 in play auctions daily, pick up the phone, and call these guys who are bidding $14K.

The likelyhood of a front runner closing a sale, and funding this purchase with their own capital all within 4 days seems slim to none.

There was one guy out of India Priktar Bhindar or something working out of a NJ address doing this at namejet last year. Maybe it has branched out, but I would have loved to see these guys pay $14K, and then get nailed with a udrp, and be out all that money, lesson learned. Novartis still has a tm on lumeo also, they are not fun to play with.

Another angle could be they are pretending to be Namebright front running, They would need a good email or spoof email, and good backstory, and ask for a $32K deposit via wire directly to namebright, and the extra just sits as a credit on account, which they could refund out probably after some service fees.

 

[wwwweb]

globalenergy.com not yet paid for ..

According to dropcatch TOS, it should have been paid by this morning 8AM MST

 

[wwwweb]

I wonder if this is the outfit behind this...

Prakhar Bindal from Axsiom.com now Namekart has a history of doing this.

iwire.com at Namejet front running

https://www.namepros.com/threads/emails-from-domainers-selling-crap-names.742232/page-38

Bragged about going from selling a $2 domain to a domain asset base of $10M, as well as Disney using him to procure a domain for them.
https://www.telegraphindia.com/1141102/jsp/t2/story_18989005.jsp

http://www.dnjournal.com/archive/lowdown/2017/dailyposts/20171107.htm

The three dozen experts currently listed include ICO.com Founder Jia Wei, MMX.co CEO Toby Hall, Dr. Kevin Ham (via video link), Escrow.com General Manager Jackson Elsegood, NameKart CEO Prakhar Bindal, Directi Senior Marketing Manager Karn Jajoo, MediaWiz CEO Samit Madan and well-known domain investor/author Aishwin Vikhona to name just a few. With registration prices starting at 2,999 Indian rupees (about $46 at the current exchange rate) the cost to attend is also meant to please.


Namecart.com has less than 100 domains listed on the site, with only a dozen being decent, so what makes this guy such an expert to speak at a conference, what is he doing with all his time?

 

[Arca]

According to dropcatch TOS, it should have been paid by this morning 8AM MST

This win would likely be paid for by a wire transfer, so it's possible payment is underway. It's a pretty insane price unless the winnner is an end-user.

 

[Arca]

@Michael - When I was looking through various past auctions at DropCatch I noticed a number of auctions missing from the NameBio database, for example:

Do you know why certain names have not been recorded by namebio?

 

[offthehandle]

As unpopular this might sound, digital signature cards might work. For $60 I own a digital signature card required for a gov't central bank foreign exchange account. There is ONE card you insert into a card reader and that proves it's you and a digital signature. If every bidder had one and was required to use it, maybe that would clean this sort of mess up.

Of course, if you are a fraudster, your cousins and neighbors would need to buy one too- so that won't stop them of course. But if certain ranges of IP addresses are logged it could be traced. Using a VPN system should be disallowed. NetFlix I have seen keeps track of IP's owned by VPN services and bans them. Unfortunately, the chinese need VPN's I believe to get outside of China.

 

[Michael]

I beleive what is happening is a natural side effect of "open auctions" system dropcatch knowingly developed, namely:

The same "Jennifer"s that are spamming pendingdelete domains as their own domains for sale ("My name is Jennifer, I am contacting you because I have found out that you have a similar domain name")
are expanding their so-called business by simply A) grabbing current open auctions list B) trying to win something @ any price C) trying to sell it to the same victims that "have similar domains" during 4-5 days.
If they found a victim - dropcatch is paid, if they did not find anybody - dropcatch is not paid.

Is it still 4-5 days period dropcatch allows to pay?

I see no solution here. Will dropcatch stop doing open auctions? Never. Will "jennifer"s disappear? Very unlikely, unless something happens with internet connectivity and/or legal environment, including international law enforcement, in developing countries where most of these Jenniefs are located at.

It would be good idea for DropCatch to start asking users to pre-fund accounts and allow bidding with pre-funded funds only. Or, to switch from open auctions model to closed model. In either case, their profits will go down. I beleive that going to closed model will have less negative $$$ effects though.

But, dropcatch is not asking us what to do, and I highly doubt they will.

They're actually spamming the pending delete list before anyone even catches it, they're not just scanning the open auctions at DropCatch. If an end user responds with interest they back order the domain everywhere so they can be in the auction.

So having a closed auction system won't stop front-running, it happens at NameJet too. I think front-running is a big reason that auction prices have approached retail pricing in the past two years, because you can take a much smaller margin when the name is already sold before you win it. People playing fair need a 10x+ return to have a viable business, if you've already sold the name you can settle for a much smaller ROI.

Actually the open auction system makes it harder for the front-running scammers. After DropCatch catches the name it forwards to the auction page, so if the end user happens to visit the domain in the interim they'll quickly find out they can buy it themselves for less and bypass the scammer. If a back order was required the end user couldn't participate himself and the scammer would be guaranteed his flip.

I do hate that the auctions are all open, but closed auctions won't stop front-running. There is quite literally no way to stop it. I guess you could monitor all auction wins, and see which bidders are consistently transferring their wins to end users soon after the auctions. But then the auction houses would have to ban them, which I doubt they would do even with a preponderance of evidence.

Closed auctions, as used by NameJet/SnapNames, would make it more difficult and would also lower fraudulent bidding in general. Most frontrunners don't seem to do any research and backorder domains themselves. They just browser whatever dropcatch sends to open auctions and try to strike deals with an end-user while the auctions are going on. If these names went to private auctions many of these frontrunners would be oblivious to these domains even having dropped recently. Moreover, many of the super privileged and deep-pocketed buyers at DropCatch do not seem to scan lists and backorder domains (at least they only appear in public auctions, not private ones). They just enter public auctions and bid on whatever is available there. The open auction system is also what enables such bidders to do particular damage if they go rogue and bid in lots of auctions over a longer period and then eventually don't pay for those auctions after several weeks/months, in what will then retrospectively be deemed fraudulent bidding activity. This open system increases the risk and prevalence of frontrunners and fraudulent bidding activity in a way that closed auctions do not.

@Michael - When I was looking through various past auctions at DropCatch I noticed a number of auctions missing from the NameBio database, for example:
Show attachment 72560
Show attachment 72556

Do you know why certain names have not been recorded by namebio?

It's very rare, but occasionally their site will be extremely slow to respond near when the auctions end, and we'll miss the results for that day. I suspected something was wrong because we only had four auctions closing that day above $100, but since I'm not actually in the auctions I can't go back and check. I just removed the four results we had for that day since they're most likely wrong. Thankfully it only happens a few times per year, thanks for the heads up.

 

[Bros]

I wonder if this stuff is happening more now that the easy money has pretty much dried up from domaining, or if it is just becoming public more easily.

 

[tonyk2000]

After DropCatch catches the name it forwards to the auction page, so if the end user happens to visit the domain in the interim they'll quickly find out they can buy it themselves for less and bypass the scammer.

Not necessary I think. The scammer may also "win" the domain @ any price first, and, still having 5 days to pay (or, in fact, more - as some earlier posts in this thread are showing) starts spamming the victims. So his victims would have no option to bid - the auction is finished. After dropcatch restarts an auction, still maintaining open auctions system, a new scammer comes in to "win" the domain. Etc., etc., etc

 

[tonyk2000]

Ironically, this thread by itself may increase the fraud level at Drop Catch. So many potential schemes are discussed with a lot of details. I bet some - if not all - scammers are reading this forum...

 

[Arca]

Yea, you guys are doing a great job of uncovering this stuff. Unfortunately I'm not an active bidder at DropCatch and we haven't been recording full bid history along the way so I can't really help much.

Would it be possible for you to do a bulk WHOIS on all domains won via auction at DropCatch from May to October of this year and see how many of them match this WHOIS info?:

Registrant Name: This domain was caught by DropCatch.com
Registrant Organization: www.DropCatch.com
Registrant Street: 2635 Walnut Street
Registrant City: Denver
Registrant State/Province: CO
Registrant Postal Code: 80205
Registrant Country: United States
Registrant Phone: +1.3035029098
Registrant Email: [email protected]

This would reveal all the unpaid for domains by users like wittynut and wnnrscrs, and possibly reveal additional users that have weeks/months worth of won domains that have not been paid for.

 

[Michael]

Would it be possible for you to do a bulk WHOIS on all domains won via auction at DropCatch from May to October of this year and see how many of them match this WHOIS info?:

Registrant Name: This domain was caught by DropCatch.com
Registrant Organization: www.DropCatch.com
Registrant Street: 2635 Walnut Street
Registrant City: Denver
Registrant State/Province: CO
Registrant Postal Code: 80205
Registrant Country: United States
Registrant Phone: +1.3035029098
Registrant Email: [email protected]

This would reveal all the unpaid for domains by users like wittynut and wnnrscrs, and possibly reveal additional users that have weeks/months worth of won domains that have not been paid for.

I can't guarantee the accuracy of my WHOIS source, but we observed 8,762 unique domains auctioned during that period at any price level (even below $100), and of those 132 currently have [email protected] as the email.

Failed to grab WHOIS on 202 domains even after seven attempts, although if it is proportional for that batch it would statistically only add another 3 domains.

If you want the list feel free to PM me.

 

[domeen]

I can't guarantee the accuracy of my WHOIS source, but we observed 8,762 unique domains auctioned during that period at any price level (even below $100), and of those 132 currently have [email protected] as the email.

Failed to grab WHOIS on 202 domains even after seven attempts, although if it is proportional for that batch it would statistically only add another 3 domains.

If you want the list feel free to PM me.

1,5% Failed payments then ? give or take. Not that bad acutally

 

[Asfas1000]

1,5% Failed payments then ? give or take. Not that bad acutally

I think so, unless the failed payments are only happening in high value auctions.

 

[Michael]

1,5% Failed payments then ? give or take. Not that bad acutally

1.5% non-payment that haven't been re-auctioned yet. Add another 38 or so that have been re-auctioned already in half a year, plus an estimated 3 that are unknown, and you're at 2% on the nose. That's pretty much the number they already claimed publicly.

Still fantastic in my book, Flippa is wayyyy worse... but it sounds like they still want to improve on that already impressive number which is good to hear. I have tremendous respect for companies who are already doing a pretty awesome job but that still isn't good enough for them. Too many companies in this industry are mediocre and they're happy to coast.

 

[Michael M]

The 2% non-payment figure is not bad. From reading the thread I would have figured the number was higher.

What concerns me more than non-paying bidders who won - is how many times have these people lost an auction and inflated the price for everyone else involved?

In drop catch auctions there is much less incentive to inflate prices. The main entity that would stand to gain from that is the marketplace, itself. IMO - It would be a very dumb move to run a scheme to inflate your bottom line in that business model. It would open the owners up to a lot of risk from a legal perspective, not to mention the sewer grade ethics required to execute such a scheme.

So, of course, I don't think DC is shilling their own auctions.

Had they turned a blind eye in the past to some auctions/bids/users - and in the end did they profit from it? IMO - Probably.

I believe more transparency is needed in the auction sector of this industry. It would reward the auction houses in the form of trust - and it would give more certainty to the investors on the other end who are bidding their hard earned money.

I believe this discussion is beneficial - as it gets us thinking and talking... I look forward to any improvements/updates made by DC in this matter. Hopefully they can help lead the domain auction industry to a more transparent one.

 

[anantj]

1.5% non-payment that haven't been re-auctioned yet. Add another 38 or so that have been re-auctioned already in half a year, plus an estimated 3 that are unknown, and you're at 2% on the nose. That's pretty much the number they already claimed publicly.

Still fantastic in my book, Flippa is wayyyy worse... but it sounds like they still want to improve on that already impressive number which is good to hear. I have tremendous respect for companies who are already doing a pretty awesome job but that still isn't good enough for them. Too many companies in this industry are mediocre and they're happy to coast.

Largely agree with your point. But imo, the damage is greater than just these 2% auctions if we factor in all the other auctions where they bid up the auction but did not win it. This did cause damage to legitimate bidders who finally won the auction at a much higher price than they should have.

 

[wwwweb]

Percentages are useless here, this is not godaddy with thousands of auctions.

This is Dropcatch with 20-25 drop auctions daily, 2-3 deadbeat, ill aligned, lowlifes, whatever you want to call them can cause havoc for legitimate users on a sample size this small.

Breaking it down to percentages does not fairly asses the damages. These auctions sell for much more than the avg compared to other auctions on a whole. So that is why people are checking their accounts to see they have been bidded up 4-5 figures by users who should have been suspended, or did not pay prior invoices and were given unicorn status to bid away.

 

[wwwweb]

globalenergy.com not yet paid for ..

GlobalEnergy.com looks to be paid now, but behind privacy

+ $20K to the Reyberry Fund ,

 

[Arca]

Original auction results (cancelled due to non-paying winners):
goodfruits.com sold for $620
labee.com sold for $450
amagen.com sold for $669
skypop.com sold for $344
permanentrecords.com sold for $904

Restarted auction results:
goodfruits.com sold for $164
labee.com sold for $803
amagen.com sold for $445
skypop.com sold for $659
permanentrecords.com sold for $262

 

[wwwweb]

Original auction results (cancelled due to non-paying winners):
goodfruits.com sold for $620
labee.com sold for $450
amagen.com sold for $669
skypop.com sold for $344
permanentrecords.com sold for $904

Restarted auction results:
goodfruits.com sold for $164
labee.com sold for $803
amagen.com sold for $445
skypop.com sold for $659
permanentrecords.com sold for $262

Thank you, for that update, Dropcatch lost $654 of bid up revenue in Round 2, over Round 1.

Front runners, deadbeats, or whatevers inflated prices by 22% overall on that batch, but some sold for higher, and others for less, but when the dust cleared the 22% less revenue was earned when negative parties were removed from bidding.

Clearly GoodFruits.com, and PermanentRecords.com were influenced by Front Runners, as they have just a few possible end users they thought they could sell. The reversal of fortunes on Round 1 produced $1524, and Round 2 produced $426, just 28% of what Round 1's bidding, when Frontrunners were removed from bidding on Round 2

Still looking forward to Dropcatch's compensation solution to user WittyNut's , and others inflated bid bumping, and what not.

 

[Arca]

I posted some of wittynuts won auctions here. I was able to locate a few more of his won auctions with some help from @Michael:

 

[wwwweb]

Also username NEWNEW did not make payment for domain powerofart.com won for $573 on Nov 3rd, 2017.

 

[Arca]

Also username NEWNEW did not make payment for domain powerofart.com won for $573 on Nov 3rd, 2017.

Newnew did pay for mentalize.com, a domain he won a few days prior to powerofart.com. He also bid up to $2250 for globalenergy.com, so it's strange that he would let his account be terminated over a $573 win.