When Flippa transitioned from the feedback system that eBay and other venues use, it opened a can of worms.
Because Flippa is not a marketplace like Sedo, where transactions are exclusively handled via the venue itself, the process of cheating the system is quite simple.
When a sale occurs, the seller and the buyer complete the transaction in private: via Escrow.com, PayPal, Western Union etc. For that matter, if the seller asks for a suitcase full of $20 dollar bills, that would be an option. There is also the option to use Flippa’s own escrow but the problem is that it’s not obligatory.
Once the buyer and the seller acknowledge the exchange as complete, the two parties gain dollar points that match the amount of the exchange.
So a purchase of a $1,000 domain or web site would then become the seller’s and the buyer’s “score”. With each eventual sale and purchase, the score amount increases.
An unscrupulous scammer can cheat the system on Flippa by launching a bogus sale, confirming the sale to the buyer (an alias, an accomplish etc.) and thus gaining points. The domain being “sold” can easily go into masked WHOIS and nobody can find out if someone indeed bought the domain.
With the Flippa fees being relatively low, an unscrupulous seller can thus increase their feedback easily, in order to earn the trust of legitimate buyers for future sales.
Once there, at the right time, he will be ready to pull off the “big one”.
As a buyer I was also going to be careful, researching until details of the domain and website that will be purchased
Thank you for this information
i’ve always thought flippa was crooked as hell and every time i say that someone chastises me telling me they had a friend that got a good deal. but until i learn different i’ll keep thinking it.
Wow – that’s interesting. I’ve previously encountered many other scams on Flippa, but hadn’t heard of this one yet.