Domain Name Scams to Watch Out For

Introduction

It never fails, whenever some new social trend or cultural phenomena makes waves there is a steady tide of con artists and shysters that quickly follow and set up shop. The Internet is a virtual breeding ground for these types, and the recently popularized field of Domain Name speculation is no exception. Whether you're new to this game or a seasoned veteran you always have to keep on your toes, as this posting will hopefully illustrate.

Con Game # 1 - The Domain Appraisal

Let me quickly point out that I'm not suggesting that every company offering Domain Name appraisals is dishonest, far from it. There are several reputable firms that will perform an honest assessment of your Domain Name and assign a perceived value to it, although the validity of that evaluation is still in question. The scam I'm referring to uses the appraisal as the final goal, and it goes like this:

At the beginning of the year I was looking through the e-mail account I use to make all my domain name and hosting purchases and registrations (I like keeping this segregated from my other e-mail). I was somewhat surprised to see an e-mail from a Robert Kayser (kayser@bonbon.net) offering to buy one of the domains I had recently parked at SEDO. Here are the contents of Mr. Kayser's e-mail:

Hello,

I'm interested in your domain name. Hope you have not sold it yet.

Did you get offers from other people?I need to know your desired price. Please don't ask to make an offer. Just email the desired price.

I run a software company. We develop client-server systems and databases in Oracle for a local company. Buying and selling domain names is not my main business. Just another way to invest money and make additional income.

I wish you and your family Merry Christmas and a Happy New Year.

Best regards,

Robert Kayser Ph.D.
President Back Office Solutions

Although I have to admit that I was initially tickled to receive an offer on a name that I had just posted to SEDO a few days earlier I was also puzzled. For one thing, the price of the Domain Name in question was clearly stated on the SEDO page - this was a domain that I bought a year ago and have plans to develop a Web service with, so it is priced a bit steep as I really only have it parked for the possible PPC revenues.

I did a quick Google check on "Back Office Solutions", and it didn't take long to find out that Mr. Kaysers letter was the first event in a known scam (for one thing, this company has no web presence - odd for a firm whose president collects Domain Names) . After reading several forum posts and Blogs the pattern becomes pretty obvious. Here is how it would have unfolded if I had chosen to mail Robert back:

1. I would reply to the letter with a price for my Domain Name, let say $2500.
2. Robert would e-mail me back saying that he's happy with the price (should have asked for $4000!) but that he needs to have the name appraised. Robert would suggest an appraisal service that he trusts explicitly, and refers me to some forums where the conclusion is that these are the best appraisers on the planet and to use any other would be a sure sign of insanity. I'll have to ignore the fact that the appraisal service is run by the same company that hosts the forums!
3. If I countered with the name of another Domain Name appraisal service Robert would insist upon the one he has chosen. He also will insist that I pay the full cost of the appraisal (about 70 dollars) myself, as even if I don't sell the domain name to him the resulting appraisal will be invaluable to me.
4. Any attempts to argue the point will prove pointless. Also, Roberts English and grammar starts to suffer a bit when he responds to the letters now and he seems to be getting a bit upset with the negotiation process(he was so polite in the first e-mail, he even wished me a Happy New Year.).
5. Things can now go two ways - (A) I take the bait and spend 70 dollars at Roberts favorite appraiser. Naturally the appraisal isn't favorable to me, and Robert backs off from the deal. OR (B) I tell Robert no sale, at which point I receive some very poorly worded and spelt profanity.

The consensus among the forum and blog posts I read was that this person (he goes by several names although the text of the letters are always identical) is based in Russia, making it difficult for the FTC to prosecute him. Sadly many of the posts were from those who had fell victim of this scam. Please don't let yourself become one of them.

Con Game # 2 - Domain Listings

For years I have been receiving notices in the mail (yes, snail mail) from a company that provides an "Internet Listing Service". What they are selling isn't illegal, but the way they sell it should be (unfortunately it's not).

The notice they send comes in the form of an Invoice, although it clearly states (in a 6-point font the same color as the page background) that it isn't. It REALLY looks official, and the word "Renewal" appears upon the list of invoiced items. In fact if you weren't looking carefully you might pay it thinking that it was your Domain Name renewal notice - which of course is the whole idea. As a convenience they have even provided an envelope to expidite delivery of your freshly signed check.

The service that the company is offering is to include your name in an Internet directory, kind of like a phone book. Kind of like a paper phone book, to be exact. Apparently your name will be seen by millions of people, who will naturally flock to your website with wallets open, eager to buy your entire line of simulated Elvis collectible shoehorns.

Before you write the 40 dollar check for this fabulous deal consider a few things. First one to consider is this - have you ever actually seen one of these directories? Do you know anyone else who has? Remember, "millions" of people are reading these things - so why aren't they that common? The answer is that even if they did print a million who would use them? What use is a paper listing for web addresses when we have Google, Yahoo and all the rest?

Do yourself a favor and keep the 40 dollars!

Con Game # 3 - False Renewal Notices

This is a bad one, and its been around for years. At about the time that your domain is up for renewal a con artist sends you an official looking e-mail that links to a site where you can renew your domain name. Everything seems in order, and you dig out your Visa card to complete the deal. This is really terrible, as not only have you given your credit card information out to a con-artist, you are also in jeopardy of losing your domain (the one you thought you renewed).

As with the above scam the crook got your Domain renewal and e-mail information from the WHOIS database. One way to thwart this scam might be to consider registering your Domain Name with privacy, many registrars offer this service for free or for a nominal cost. This way your personal information stays out of the WHOIS database. Another way to keep from being burned by this one is to simply keep track of your Domain Names, who you registered them with and when they are due for renewal.

Conclusion

The Domain Name Game can be a fun and profitable endeavor, but you have to keep your eyes out and be aware of those who don't play fair. Remember to check out any and every offer you get, use Google, forums and blogs to perform your research. Also, don't forget to check with the Better Business Bureau, on their site you can search their database and see if the company that has just offered to buy frumpweasle.com from you for 10,000 dollars is legitimate or not.

If you've experienced any of the above cons or know about any others please feel free to post, I know everyone would be interested in hearing about them.