Scams have become a part and parcel of life. They happen everywhere, online and offline, so we always need to be vigilant. In the domaining industry there used to be quite a few different domain scams around, but over the years they’ve died down quite a bit. Scams are coming up again in new forms.
Most of these scams are also ones that target those with no knowledge of domaining. Generally they’ll target those who look to be end-users who barely even know how to register domain names. After you go through this post you’ll be able to see right through the majority of scams that are out there!
Let’s dive right into them…
The Appraisal Scam
I own well over 1000 domains, and have flipped many thousands more, so I see this scam all the time, even now. The modus operendi is like the following.
Normally within a week or two of buying or registering a domain you’ll get an e-mail (which is likely to be automated) from someone asking if you’d take some extremely high value for the domain. This number is often in the thousands or tens of thousands.
The victim will respond, astonished at their great luck, saying, “Sure!”
They’ll then get an e-mail back saying they really want the domain but need a certified appraisal from an unknown site, like realappraisal.com first. These appraisals cost anywhere between $20-100 depending on the scam artist who’s running the site. The price is not big deal for most of domains.
The victim, thinking that in return for a $20 appraisal will get $2,000+, quickly buys the appraisal service. If the victim gets the appraisal done it’ll usually end up being for roughly what was initially offered – solidifying what they know perceive the domain to be worth. The victim will then order appraisal service to the scam artist and the victim will never hear back from them. Alternatively, they may get an e-mail back saying they no longer want the domain and are sorry for the inconvenience.
This is often an automated process. So you can actually reply to the initial e-mail that says, “I’m be willing to offer $10,000” and you can respond saying you want $10,000,000 and they’ll agree to that pricing.
This, of course, goes after those newest to the domaining world. I’ve heard countless people fall for this. The real power in this scam is that people aren’t out much money and they often view the appraisal (wrongly) as actually being worth something.
You should never pay from an appraisal from someone you don’t know. Also by understanding your price influencers it should be obvious that such an extreme offer is a scam.
This scam has been quite systemic throughout Flippa. It appears over the past year that they’ve really cracked down but I still see a few of these pop up. These scams will be in the form of a listing for some kind of three-letter domain name. They’ll always have a buy now price and will only accept PayPal.
Let’s look at an old example I’ve mentioned before…
In the title they’ll list highly valuable domain names but in reality the listing will be for a worthless domain name. Remember you can put anything in your title. So these scam artists put completely false information in it.
The tactic these individuals utilize is drastically underpricing their domain names. The real price for these domains would be in the $1,500 range but because he’s listed them at just $499 people want to turn a quick profit and grab these domains before someone else does.
When you come across these listings run! And if you aren’t sure about whether or not their scams say you’ll only use Escrow. I always recommend, when buying domains over $500, to use Escrow. Even if you aren’t going to use Escrow you should make sure that the individuals you’re buying your domain from would use Escrow if requested.
Someone completely apprehensive about the quite easy process of using Escrow should signal some sort of problem. Fortunately, these types of scams, while I’ve seen dozens of folks fall for them, are quite rare and easily spotted when you know what to look for. Flippa has clamped down on this activity by making it mandatory to verify the ownership before the domain is allowed to be listed.
A recent scam that’s arisen is again completely automated. Some scam artists have developed software that looks at domains that are near expiration, falsely say they own/represent the domain name, and contact those with similar domains asking if they want to buy the domain.
There are a number of variations of this scam. Some simply take the money of victims and run, because they’ve never possessed the domain name they said that they did. The most popular scam is a bit different however. The scam artists falsely represent almost every domain name that has just expired. They’ll then contact all of those with similar domains to gauge interest. If someone takes an interest they’ll ask for hundreds of dollars (while they still don’t own the domain name) and then will go and by the domain name for $20-70.
This is perhaps a little less serious than the other scams because most of the time the individual at least gets the domain. But what this program does is falsely represents tens of thousands of domains every week; never taking possession of a domain name before selling it.
Once again, as you can probably quite easily tell, this is a scam that preys on folks who don’t know much about domain names and who may have never bought one before.
These three domain scams are the ones I see the most. The first one in particular I see at least once or twice a week personally.However, when you’re as knowledgeable about domaining as you now are, you should look at all these scams and say, “Well, they seem pretty obvious. I guess none of these scammers are overly clever!”
The reality is these people make the most off of those who are simply a bit ignorant when it comes to domain names. The best defense to getting scammed is a solid foundation of knowledge about domaining; and you now have that.