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EDIT POST: not sure who the scammer is. looks like NS might be
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The biggest flaw: People assume that any domain that is expired (let's say on July 27th 2015) would show an expiry of 2015 and will then drop. What ICANN does though, that they have this system in place that instructs registrars to pay the renewal fee and renew the domain for one more year - just that the "Status" if the domain will be changed from "OK" to a custom one indicating it's expired. This gives them the liberty to hold (or auction) it for 0 to 45 days. Now if they still decide to drop the name (no auction won), ICANN refunds them the renewal fee. So it's a vicious cycle. I have observed this process but ironically, never found it written anywhere.
My bad. Yes, that's the transfer out that they allow.actually godaddy does not. godaddy will allow transfers out of godaddy but not between accounts. if your domain is expired you must renew before you can transfer between godaddy accounts.. i've yet to come across any registrar that allows expired domains to be transferred between accounts.
It looks like THREE successive owners have been duped by this fictitious 2016 expiry date.
I actually offered a domain for free on namepros recently, claiming it had almost a year until expiration.
Turns out that my domain had recently expired, but the whois date showed as 2016, for the reasons you explain in this paragraph.
Just like whois duped me into believing that I had a year left on that domain..... three successive buyers have been presented with a 2016 date, when it had actually entered the grace period.
None of the three had renewed after taking ownership during that grace period. Messy situation