Domain front-running : Beating the “hot air” sellers that prey on expired domain auctions

Directnic

Dave Neyland‘s adventures began when his premium domain, Emulate.com, was stolen last year.

The technology innovator and consultant managed to get it back, and in the process he became more involved with the concept of domain investing.

In recent weeks, Mr. Neyland was contacted by persons attempting to sell him a domain asset of interest, Neyland.com.

As the owner of both the .net and .org variants, Mr. Neyland was told he could instantly buy the domain from them.

Those inquiries, preying on the fact that Mr. Neyland was the primary party interested in the domain, did not disclose two important facts:

  • That Neyland.com had expired and was about to drop.
  • That these offers were in fact a demonstration of “front-running.”

An unscrupulous practice, domain front-running involves the promise of a domain sale, without first paying to own it.

Domain droplist skimmers pick domains that are about to drop, and attempt to sell them to potential buyers, usually holders of a different extension.

When that other party agrees to a purchase, the domain front-runners attempt to get the domains at the drop, engaging the services of SnapNames or Dropcatch. If they fail to catch the domain at a price lower than the agreed upon sale, they go back claiming that someone else got there first, and that the domain is not available any longer.

In this case, Mr. Neyland was told that he could get Neyland.com, a “similar domain” to those he already owns.

Here is a typical email from a domain front-runner from Indonesia:

“Dear sir,

I noticed you have .org version of this domain, so i would like to know if you would have an interest in Neyland.com.

If you are interested, please feel free to reply this message for further information.

Sincerely,

didik”

Another email from an address in the US made a similar offer:

“Hi,

We just wanted to let you know that domain NEYLAND.COM is being released back to the market.

Since you own NEYLAND.ORG, we believe that you might have interest in securing NEYLAND.COM as well.

If you are interested, please CLICK ON THIS LINK to get more information and confirm your interest.

All the additional information is available on our web site, but feel free to reply back to this email and we will be more than happy to help you.

Kind regards,

Domain Brokers Team”

Neither of those front-runners disclosed the fact that the domain was expired and about to drop and anyone could attempt to catch it independently.

One of these inquiries quoted a price of 750 EUR to “sell” the domain. Imagine that, a street bum offering to sell you a car from the dealership, just to pocket a commission on an asset he doesn’t own.

We advised Mr. Neyland about the actual status of the domain, and he placed backorders on the two most popular venues, SnapNames and Dropcatch.

A few days later, an auction ensued at SnapNames, with Mr. Neyland as the participant along with other bidders. Almost all of them dropped out of the bidding “war” that ensued, with one user being persistent for a few counter-bids.

In the end, Mr. Neyland was able to secure the domain Neyland.com at a lower price than what was quoted via email by one of the speculators, and he’s getting ready to transition his personal web site to it.

If you are contacted by strangers offering you a domain of interest, similar to one you already own, examine the following checklist:

  • Is the domain expiring, or registered even?
  • What information is in the WHOIS? Does it match that of the inquiry?
  • Avoid all emails from Gmail or other free email providers. Check the WHOIS of the domain for those who do not use free email.
  • You can either ignore these emails, or write back telling them “Hell no, I am not paying to buy that domain, not interested.”
  • Place your own bids on SnapNames or Dropcatch, if you want to go after the domain.

Domain front-running is an unethical, borderline illegal practice, that can lead to complicated situations. Read the case of the Lunchmail.com UDRP.


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Comments

6 Responses to “Domain front-running : Beating the “hot air” sellers that prey on expired domain auctions”
  1. Kris says:

    Namejet and SnapNames have a pretty good idea of the accounts who are bidding one is a Prikar from
    India , they don’t suspend them?

  2. Eric Lyon says:

    Front-running is becoming a rampant epidemic. We are constantly having to shut front runners down in their tracks. I believe most marketplaces have rules/policies that require a seller to own or have explicit authorization to broker (from the owner) in order to list a domain for sale. Front-runners either; A) Don’t read the rules, B) Don’t care if they break the rules, C) Have unethical intentions to take money and not deliver, D) Or simply lack the knowledge/education to determine right from wrong.

  3. Anunt says:

    Is this illegal???
    A bidder was in a private namejet auction with a domain similar to mine.
    So he contacted me knowing that i would be interested and asked me how much i am willing to pay for this domain.
    So i told him $3,000…so he bid $2500 and won.
    I found out that he had won the domain for $2500 so i offered him $2000.
    So the deal never happened.
    So who is wrong here???

  4. DomainGang says:

    Anunt – Hopefully that’d teach them a lesson.

  5. Bart says:

    The tactic of offering PENDING DELETE domain names to the WHOIS owners of similar domains has been going on for years. Nothing new under the sun, not sure why it even gets mentioned.

    In fact, this can even be used to your advantage. They basically provide the (FREE) service of notifying you that an interesting name is PENDING DELETE. If you want the name, DON’T let them know you’re interested (don’t even click any links in their emails), but order with SnapNames etc. Normally the name will then just drop and you should be able to catch it easily for a low price, all in less than 5 days!

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