We’ve all heard the stories about domainers who sell via Paypal, push the domain after receiving payment, then receive a chargeback removing the payment from their account. Despite proof that the transaction went through as agreed, Paypal will not back the seller in these situations because their is no physical merchandise or service involved.
Unfortunately for domainers, this is not your only concern. What about stolen domains? According to Domain Bits, it looks like we’ve found yet another case where I deal was “to good to be true,” and it turns out that was in fact the case. Despite using Escrow.com to complete the transaction, the domains turned out to be stolen and are in the process of being returned to their rightful owner. That is great news for the victim, but terrible news for the person that stands to lose the thousands of dollars spent for the domain names.
The part of Jeff’s post I wanted to mention is at the bottom, where he gives tips to protect yourself from domain fraud:
1. Escrow Isn’t Enough. All escrow does is ensure that the transaction goes through as agreed – the seller gets paid his money and the buyer gets his domain.
2. Research the Domain History. Before purchasing a domain, check the whois history (on DomainTools.com). Be especially suspicious of changes that occurred recently, particularly a change of the administrative email contact. For a larger domain purchase, pick up the telephone and contact the previous owners to verify the pedigree of the domain.
3. Don’t Rush A Transaction. People are likely to notice that their valuable domains are stolen pretty quickly, so a thief want to unload the domain quickly. Be particularly wary of someone who seems to be in a big rush to close a sale.
4. Buy From Reputable Buyers. Research the person you are buying from. Find out more about them, and particularly about any past domain dealings.
5. Too Good to Be True. If the deal is too good to be true, it probably is. When Alexa the Top offered an $XXX,XXX domain for sale at DNF for $X,XXX this raised alarm bells for several members.
6. Keep Your Domains Safe. Make sure your domains are with a registrar that cares about domain security – Moniker and Fabulous are the two that everyone states are good in this regard. Apparently, neither registrar has ever had a domain stolen.
7. Don’t Use Free Email Accounts. Free email accounts should not be used as the contact for your domains. The normal way that a thief gets control of a domain is by getting control of the email account of the administrative contact. Free email accounts are generally easier to hack than ones that you control.
Sadly, even following these steps does not guarantee anything, but it is a great step towards protecting yourself. Great tips Jeff!