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]

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.

 

[Arca]

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.

If your statement is true, then why are you not sending cannamarket.com to auction for a fourth time? The third time this auction ended, it was won at $4383 and the winner did not pay. Since then you have held the domain in you dropcatch.com account.

So you are saying that "Domains that are not paid for by the winning bidder will return to auction" and that you "will not be altering our reauction process". Except in this case you have obviously altered your reauction process by blocking the domain from being reauctioned despite non-payment by the winner.

You said that "Domains that are not paid for by the winning bidder will return to auction". But since you are now blocking this from happening you statement is false. This demonstrates how you actually do have flexibility with altering how this system operates in situations where it suits you.

 

[wwwweb]

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.

Do you happen to have bidder handles for the deadbeats of such auctions, I guess we need to police Dropcatch just to make sure they are blocking these bidders from bidding again. Or to see if they are creating similar usernames.

Good point on the two backorders, Dropcatch is once again profiting from deadbeat bidders, and not treating their customers fairly in the bid process if there is only the single remaining bidder left.

 

[wwwweb]

If your statement is true, then why are you not sending cannamarket.com to auction for a fourth time? The third time this auction ended, it was won at $4383 and the winner did not pay. Since then you have held the domain in you dropcatch.com account.

So you are saying that "Domains that are not paid for by the winning bidder will return to auction" and that you "will not be altering our reauction process". Except in this case you have obviously altered your reauction process by blocking the domain from being reauctioned despite non-payment by the winner.

You said that "Domains that are not paid for by the winning bidder will return to auction". But since you are now blocking this from happening you statement is false. This demonstrates how you actually do have flexibility with altering how this system operates in situations where it suits you.

They basically discredited their own points, that they are doing something, but they are really not doing anything.

When a domain that sold on Aug 6th, which is indexed in Namebio, now as D Trump would say is a FAKE SALE, for that to happen two additional times, and take us into November shows that Dropcatch does not take due care, or concern as they stated in their cut, and paste response.

If this can be manipulated 3 times over, imagine what else can be. To be honest, I would say about 8 active users win 50 percent of the stuff on dropcatch on a daily basis, and they are very territorial when it comes to letting anyone else win.

 

[tonyk2000]

if there is only the single remaining bidder left.

I had a couple of cases @ snapnames where myself and somebody else were just 2 bidders, and another bidder won but did not pay. In these cases, snapnames offered me an _option_ to pay min. $69 (or whatever was min. bid at that time) amount of default bid and have the domain. By option I mean that they also bothered to ask me - "do you still want this domain?". This was fair.

 

[Arca]

Do you happen to have bidder handles for the deadbeats of such auctions, I guess we need to police Dropcatch just in case they are blocking these bidders from bidding again. Or to see if they are creating similar usernames.

Good point on the two backorders, Dropcatch is once again profiting from deadbeat bidders, and not treating their customers fairly in the bid process if there is only the single remaining bidder left.

I don't have a list of bidders that have been (or should have been) banned.

While we are able to see all past auction history in our accounts, dropcatch.com immediately erases all auction history where fraudulent bidding activity/non-payments have taken place. So when auctions are restarted due to fraudulent auction activity, there is no way to go back and look at the auction activity for these auctions anymore.

So order to keep track of which bid handles get suspended due to fraudulent bidding activity you would have to screenshot every single completed auction bidding history prior to the winning bidder being deemed fraudulent. There is no way to obtain this info "after the fact".

If DropCatch left the history of fraudulent bidding activity up in the records in our accounts that would obviously be better for transparency and for building trust (since we could then go back and examine the fraudulent bidding activity and also feel certain that the suspended bid handles are actually suspended and are never seen again in future auctions).

 

[wwwweb]

I had a couple of cases @ snapnames where myself and somebody else were just 2 bidders, and another bidder won but did not pay. In these cases, snapnames offered me an _option_ to pay min. $69 (or whatever was min. bid at that time) amount of default bid and have the domain. By option I mean that they also bothered to ask me - "do you still want this domain?". This was fair.

I agree that is a fair, and honest play policy, and you rightfully had an opportunity to pay, or decline their offer to you.

More transparent, but I guess Snapnames had to learn that the hard way. Dropcatch support is a bit more arrogant when it comes to that process at this point.

 

[wwwweb]

So about 3 years to this date at Dropcatch I remember seeing lasvegaslimousine.com close at $11,xxx, obviously it was not paid for, and it resold for $4,000, that is almost a 3X margin in price difference.

The same bidder who won the second time around still owns it, he kinda runs a home made lead generation business for limos. That same bidder was one bid away from paying $11,000 for that domain had that deadbeat bidder backed off, or gotten distracted.

This is where the danger lies for the consumer, but the polar opposite for the house, as that is pure profit, provided by a bidder who can disappear just like a ghost if they feel the need not to follow thru, and pay.

 

[Arca]

The Curious Case of CannaMarket.com: Three Non-Paying Auction Winners + Inexplicable Fourth Auction Obstruction by DropCatch

It’s probably useful for this discussion on fraudulent bidding at DropCatch.com to add some more detail about this now infamous dropped name. It’s unique in that it was won by three different winners in three different auctions that were all deemed fraudulent. Three winners won but none of them paid. They have still not managed to get a legit winning bidder for this name, but DropCatch.com is now blocking the domain from being restarted and sent to auction a fourth time.

The domain was dropcaught by them on July 7, 2017.

In the original auction at DropCatch it sold for $5,101 on July 10. The winning bidder did not pay, was deemed fraudulent, and the domain was restarted.

The restarted auction ended on July 24, where the domain sold for $5,070. Again, the winning bidder did not pay, due to "fraudulent bidding activity," and the domain auction was restarted.

The third auction ended on August 6, where the domain sold for $4,383. The winner this time also did not pay. DropCatch.com is now blocking the domain from being sent to auction a fourth time, even though they have adamantly stated that "domains that are not paid for by the winning bidder will return to auction". They claim to stand so firmly behind the system they have in place that they cannot make any changes based on the suggestions provided in this thread. But this example shows that they are actually quite flexible with how they run their system, as they decided to not return it to auction a fourth time, against their own rules.

The first two auction rounds have been deleted from the namebio.com database, but deleted sales are not deleted from their daily market reports series. Here are the reports containing the sales numbers I have provided above:

CannaMarket.com Auction 1 - July 10 - $5,101 (non-paying winner)
CannaMarket.com Auction 2 - July 24 - $5,070 (non-paying winner)
CannaMarket.com Auction 3 - August 06- $4,383 (non-paying winner)
CannaMarket.com Auction 4 - not yet announced, even though nearly 3 months have passed.

 

[wwwweb]

The Curious Case of CannaMarket.com: Three Non-Paying Auction Winners + Inexplicable Fourth Auction Obstruction by DropCatch

It’s probably useful for this discussion on fraudulent bidding at DropCatch.com to add some more detail about this now infamous dropped name. It’s unique in that it was won by three different winners in three different auctions that were all deemed fraudulent. Three winners won but none of them paid. They have still not managed to get a legit winning bidder for this name, but DropCatch.com is now blocking the domain from being restarted and sent to auction a fourth time.

The domain was dropcaught by them on July 7, 2017.

In the original auction at DropCatch it sold for $5,101 on July 10. The winning bidder did not pay, was deemed fraudulent, and the domain was restarted.

The restarted auction ended on July 24, where the domain sold for $5,070. Again, the winning bidder did not pay, due to "fraudulent bidding activity," and the domain auction was restarted.

The third auction ended on August 6, where the domain sold for $4,383. The winner this time also did not pay. DropCatch.com is now blocking the domain from being sent to auction a fourth time, even though they have adamantly stated that "domains that are not paid for by the winning bidder will return to auction". They claim to stand so firmly behind the system they have in place that they cannot make any changes based on the suggestions provided in this thread. But this example shows that they are actually quite flexible with how they run their system, as they decided to not return it to auction a fourth time, against their own rules.

The first two auction rounds have been deleted from the namebio.com database, but deleted sales are not deleted from their daily market reports series. Here are the reports containing the sales numbers I have provided above:

CannaMarket.com Auction 1 - July 10 - $5,101 (non-paying winner)
CannaMarket.com Auction 2 - July 24 - $5,070 (non-paying winner)
CannaMarket.com Auction 3 - August 06- $4,383 (non-paying winner)
CannaMarket.com Auction 4 - not yet announced, even though nearly 3 months have passed.

So this will follow the same fate as the streamcast.com saga.

Another reason they maybe decided not to return it could be to save the shame of having to auction it off for a 5th, or 6th time as they have no control over the wacky non paying bidders infiltrated within their platform. Then again maybe they do, and decide to look the other way, as we all know deadbeat bidders are good for business, fake bids, mixed with real bids, equals more profit for dropcatch which is all that matters at the end of the day.

 

[tonyk2000]

Since the cosmetic changes DropCatch is announcing would likely not fix the problem even partially (as the problem appears to be with the system design - open auctions without obligatory accounts pre-funding), it is likely that they will stop re-auctions instead. Which opens the question - what will happen with the domains in question from legal/ownership/auctions TOS point of view.