More Fraudulent Bidding Activity at DropCatch.com

[Arca]

DropCatch.com just can't get rid of fraudulent bidding activity on their platform. Fraudulent bidders bid up prices, don’t pay when they win, and then the names are re-auctioned again and again until a legit bidder wins.

It is a win-win system for DropCatch. If the fraudulent bidders bid up a legit bidder, DC cash out even more thanks to the fraudulent bidder driving up the price beyond where it would have gone with only legit bidders. If the fraudulent bidder wins, they simply hold and re-auction the name over and over until they get a legit bidder that pays. It's a problematic system for regular bidders, because before these fraudulent bid handles get suspended, they bid up legit bidders in various auctions.

DropCatch's system enables them to get paid for names even with so many fraudulent non-paying bidders on their platform. But even with this auction restarting system in place, there are simply so many fraudulent bidders that they sometimes struggle to find a legit winner, despite multipe re-auctions. Take CannaMarket.com. The domain has already been won by THREE DIFFERENT fraudulent bidders. The first winner, in the original auction, was fraudulent. The name was re-auctioned. The second winner was fraudulent. The name was re-auctioned. The third winner was fraudulent (he bid the name up to $4K). When a name can score a triple fraudulent bidder combo streak on their platform, with no legit winner in sight, it’s clear that there is something wrong with how their system works. They are currently holding cannamarket.com in a dropcatch.com holding account, and I wonder whether they will try to re-auction the name a fourth time, or just let it drop since this is obviously a bad look for them when three out of three attempts of auctioning off the name ended up with fraudulent bidding activity (and who is going to be brave enough to bid against all the fraudulent bidders in a fourth auction? This name is apparently a fraud magnet).

Then there was this auction for lumeo.com recently (it was bid up to $14K by a bidder that most likely is fraudulent, and the winner has not yet paid, and the payment deadline passed a few days ago). How long until this name gets re-auctioned due to fraudulent bidding activity?

I often get emails from dropcatch saying "due to complications involving potentially fraudulent activity, the following auctions you had participated in are being restarted". A quick search shows an inbox full of emails notifying me of fraudulent bidding activity and auctions being restarted:

I just received another one today. It contained another SEVEN auction names that closed recently with fraudulent bidding activity:

cybercorp.com - Sold for $1251
sefin.com - Sold for $665
devlog.com - Sold for $343
thermair.com - Sold for $457
simplypretty.com - Sold for $515
finte.com - Sold for $350
kinovo.com - Sold for $330

All these auctions involved fraudulent bidding, and have now been restarted (you can go to dropcatch.com and bid on them right now). A quick visit to the dropcatch.com website shows a other restarted auctions as well, such as for evinite.com (sold for $142) and acercloud.com (sold for $370). Will legit bidders win these restarted auctions this time around?

DropCatch.com is very much like a game of hot potato, where fraudulent bidders bid up auctions and don't pay when they come out winning. There is a significant amount of auctions being restarted due to winners not paying up, when compared with other expired domains auctions platforms. The result is that legit bidders have to pay, literally, for the presence of so many fraudulent bidders on this platform that bid up the prices for legit bidders. Just an advice for everyone to be aware of this issue when participating in auctions at dropcatch.com.

 

[Arca]

What a difference a shill bidder makes, an $11K difference by taking the shill bidder out of the lumeo.com auction.

Not only the fraudulent bidder, but the second highest bidder during the original auction mysteriously lost all interest in the name even though he could have bought it for much less this time around.

For those not familiar with this name, Lumeo.com was won by a fraudulent bidder who passed himself off as end-user g o l u m e o (.) c o m (using bid handle "golumeo") and attempted frontrunning the name. He bid the domain up to $14,072 but did not pay as he was not able to find any end-users willing to pay more than that.

The restarted auction for that name ended today at a significantly lower $2,275 (the auction was won by k a m i s a m a, second highest bidder was g r e e n m o u n t a i n).

Notably, the second highest bidder in the original auction, w a r l o r d, who bid it up to $14K at the time, right behind bidder "golumeo", was also in the auction today, but obviously he did not match his bidding on Oct 21.

I'm surprised that he was willing to pay $14K for the domain on Oct 21, yet today, merely two weeks later, he is not even willing to bid above $2,2K (in fact, w a r l o r d did not place a single bid above $59 - what a difference 2 weeks can make!).

I wonder if globalenergy.com will be paid for. Up to 19k..

Did you recognize the username? It is a nice domain, but to throw down $20K, and if you sell thru a platform like sedo, godaddy, you need $25K just to break even.

GlobalEnergy.com was won by bidder P o s t P o s t for $18,900 today. Anyone know anything about this bidder? I personally can't recall seeing this handle before. A new account or an established bidder? Will this winner pay or will it turn out to be another fraudulent bidder?

Second highest bidder was w a r l o r d at $18,850, the same w a r l o r d who was second highest bidder in the original lumeo.com auction at $14K. So while his budget for lumeo.com suddenly shrank from $14,000 to $59, he was still able to budget $18,850 for globalenergy.com on the same day.

 

[Addison]

Lastly, THANK YOU @Jeff Reberry and @Rebies for your very professional and promising initial comments to this complicated situation. I hope you don't heed the advice given by others avoiding hot water issues (below image), and you do indeed follow through with the promise to return to NamePros with said transparent proposals, and rectifications.

I am trustful that they're doing everything they can. Give them time. They've earned it.

https://twitter.com/andrewrosener/status/927662796552200195
(screenshot was edited with constructive editing in red font / black strike through lines)

It's bizarre for a grown man to pout and throw hissy fits on a tweenie platform like Twitter.

"The truth will set you free"

 

[Arca]

69 auctions were restarted as a result of WittyNut's months long streak of fraudulent bidding activity. Those auctions have now closed, and there is a clear price difference after the presence of that particular fraudulent bidder was eliminated. I've included some of the results from these newly closed auctions. Shows you the impact that these fraudulent bidders at dropcatch can have on auction prices. This issue seems to still be ongoing (I have not had time to post updates about auctions being restarted subsequent to fraudulent bidding, but there have been several non-wittynut related auctions restarted due to other non-paying bidders since my last post about it).

WittyNut in red and no WittyNut (restarted auction result) in green:

cannamarket.com
WittyNut: $4,383
New: $2,005

cannabishq.com
WittyNut: $3,500
New: $308

generaldoctor.com
WittyNut: $2,228
New: $488

smokewatchers.com
WittyNut: $2,550
New: $112

herbremedies.com
WittyNut: $905
New: $320

ecopot.com
WittyNut: $1,000
New: $439

orderorganic .com
WittyNut: $1,101
New: $210

ghorganics.com
WittyNut: $1,800
New: $810

customplastic.com
WittyNut: $1,551
New: $348

alternativeliving.com
WittyNut: $1,251
New: $755

bluepharm.com
WittyNut: $464
New: $701

ehio.com
WittyNut: $1,150
New: $905

kgarden.com
WittyNut: $244
New: $225

livingmindfully.com
WittyNut: $1,113
New: $827

biomaps.com
WittyNut: $370
New: $145

pawh.com
WittyNut: 381
New: $285

 

[Arca]

 

[Jeff Reberry]

First of all, I want to thank you all for your feedback and criticism. We are truly dedicated to making our platform a great place to do business, and we are definitely not interested in “turning the other cheek” to fraudulent activity, as has been suggested. We recognize the more fair and transparent we can make the platform, the better it will be for our long-term users, regular customers, and therefore DropCatch as well. We appreciate the constructive criticism and suggestions of how to improve the fairness and usability of our platform.

One issue we’ve noticed is that when we re-start an auction because the winning bidder failed to pay, the message that goes out to other auction participants is poorly worded. We say “Due to complications involving potentially fraudulent activity, the following auctions have been restarted…” All it means is that the winning bidder failed to pay for the auction in the required period of time, and that bidder may have been doing business with us for years or might have joined DropCatch right before the auction. The bidders are not necessarily “fraudulent” in that they are falsifying their identity or operating duplicate accounts, nor even trying to defraud the system. These users simply did not pay by the deadline. In many situations this was due to international wires, due to credit cards being declined, due to credit card splits, due to holidays, due to an abundance of other payment issues. But not actually “fraud.”

We now realize our system is partly at fault for most of the re-auctions. Most significantly, we did not require users to have a valid credit card on file prior to bidding. Thus, it was up to the auction winner to take their time and return to DropCatch and complete payment. Many legitimate accounts have been suspended for this very reason.

We stand by our practice of re-auctioning domains. As @Michael points out, when there are one or more non-paying bidders in the auction, it is the only fair way to ensure the domain gets sold for a fair price. For instance, it could be argued that a non-payer may have caused more than one legitimate bidder to bid higher than they would have done, so simply offering the auction to the second place bidder would end up costing legitimate bidders more money. It can also open the door to other scams where multiple fraudulent bidders try to "scare off" legitimate buyers by bidding a domain up very high and then end up taking it for only $59 because nobody else participated.

In the event of non-payment from the winning bidder, we believe re-auctioning the domain continues to be the best policy, as it is more transparent and removes all questionable bids. It is simply best to start a brand new auction.

We are currently implementing tighter controls to keep fraudulent users out of our system and to prevent old fraudulent users from creating new accounts. This morning we rolled out a credit card verification process for all new users. Next week this verification will be expanded to all existing users who do not have a credit card on file. We also recently added in a mobile SMS/voice verification for your phone number. In the coming weeks, we are going to roll out additional security measures, including a back-end reputation based scoring system as well as better verification processes. We are confident our efforts will significantly cut down on the number of re-auctions as has been seen on the platform recently.

With regards to the display of the original auctions (in the case of a re-auction) – it has been brought to our attention we are not being fully transparent. We agree. Thus, going forward we will make all auction history available to all participants of that auction. The original design excluded the former bid history for technical reasons. We hope to have this live within a week. Thus, if you bid in an auction and it is re-auctioned, you will see the original auction data.

This thread also has bought up one more item. If a user wins an auction, does not pay, and is then suspended, they may have also bid in other recent auctions and not have won those auctions. They may have "bid up" those other auctions and arguably caused the legitimate winner to pay more than they would have. We are identifying all of our prior auctions where this “collateral damage” occurred and determining a fair correction for the legitimate winners of those auctions. In total, we have currently identified 280 auctions where this occurred and we will have another update by next Tuesday with a proposed resolution for all affected users. Going forward, hopefully tighter controls will prevent this from occurring very often, but when it does occur, we will figure out a method to make right on any auction that went for a higher amount due to a non-paying user.

Our goal is to create the most fair and transparent domain name auction platform! Transparency always wins and we are fully committed to your success.

Thank you for giving us time to fully research, investigate and respond. We will have more details next week.

 

[imadoer]

@DropCatch Support you guys should offer us a week or month where huge domains or any partner affiliate is out of the discount backorders. How about some domainer appreciation? After all this madness. I was a bidder on a few of these domains. I didn't understand why they went so high. I been felt cheated by dropcatch and hugedomains im so sick of it. Ill try to avoid you guys

 

[main]

@DropCatch Support Thanks for participating in the discussion. First of all, I appreciate that you re-auction domains as some other places don't do that. However, 1.7% is still high. It is not only about non-payment by auction "winners", but also about these same fraudulent bidders artificially inflating prices for your legitimate customers.

An example mentioned is what if the fraudulent bidder had stopped one bid short on lumeo.com and the 2nd highest bidder would have actually won. That person would have unfairly paid thousands of dollars extra. DropCatch benefits but costs go up for domain buyers. Surely this is happening in other auctions. It would be short-sided to ignore this issue.

The frustration with DropCatch is real on several fronts: fraudulent bidders, Partner trumping discount orders where investors feel DropCatch is "stealing" ideas, and open auctions. There are so many domain investors I've talked to that have simply given up using DropCatch.

I think having closed auctions for at least domains with 3 backorders or less would alleviate the frustration by many that I talk to. There are some of us spending lots of time researching the drop only to see domains go to auction with just 2 or 3 bidders. Then a handful of people with deep pockets snatch up a huge percentage of these domains. It leaves things disproportionate and creates frustration. So many domain investors have stopped using DropCatch because of this.

Even though I think it seems counter-intuitive, DropCatch might actually make even more money by having closed auctions for domains with 3 or less backorders because so many more people would participate.

Please consider this.

 

[Jeff Reberry]

Everyone,

Plain and simple, fraudulent accounts create headaches for everyone. We are working to be better about this.

The recent re-auctions are primarily due to 3 specific users. (and one more to come.)

The first user was the fraudulent bidder for Lumeo.com. This user slipped through our detections; are we are increasing our abilities to identify fraudulent users before they ever get into auctions. We will not go into details on our process, but it is quite extensive.

The second two users did not complete payments prior to the cutoff date, thus both of these accounts were automatically suspended and domains re-auctioned. Both of these accounts caused 21 re-auctions in October. We had no reason to believe these users were not going to pay – as they both had good history and made many payments in the past. One of these accounts for a very long time. Both of these users had auctions spanning multiple days in a row – this is why re-auctions have been occurring each day over the past few days.

In addition, we have one other user (WittyNut) who has not paid for 69 domain auctions, dating back to May of 2017. There was a glitch in our system which allowed this user to continue winning auctions, even though he had outstanding items in his shopping cart. We identified and fixed this issue back in August and suspended the account. We have been in communication with this user and extended a grace period to pay for all of the auctions due to our partial cause in this mistake. (Granting the user the benefit of the doubt here.) Even though this user has promised to pay for these winning auctions, he has only paid for a few, and 69 auctions remain outstanding. We now believe there was intent of fraud on behalf of this user, with no interest in actually paying for the domains. We will be re-auctioning all 69 of these domains very soon.

We want to point out that re-auctions are TINY compared to the total number of closed auctions. Almost all of our auctions close and are successfully paid for by the winning bidder. Nobody is talking about the 98% of the other auctions that are successfully paid for each day.

We have been working very hard to enhance and refine our new user verification process and we have made great improvements, even though this thread suggests otherwise. Approximately one month ago, we added a mobile phone number via SMS or voice verification. Unfortunately, this did not stop the Lumeo.com fraud. We know we can do better and are working on it right now.

Soon we will be requiring all users to provide us with a valid credit card and rolling out additional fraud detection and mitigation tools for our team.

Our goal is to have zero re-auctions. We are committed to making re-auctions a thing of the past. And we are sorry for the issues these bidders have caused.

 

[Arca]

Everyone,

Plain and simple, fraudulent accounts create headaches for everyone. We are working to be better about this.

The recent re-auctions are primarily due to 3 specific users. (and one more to come.)

The first user was the fraudulent bidder for Lumeo.com. This user slipped through our detections; are we are increasing our abilities to identify fraudulent users before they ever get into auctions. We will not go into details on our process, but it is quite extensive.

The second two users did not complete payments prior to the cutoff date, thus both of these accounts were automatically suspended and domains re-auctioned. Both of these accounts caused 21 re-auctions in October. We had no reason to believe these users were not going to pay – as they both had good history and made many payments in the past. One of these accounts for a very long time. Both of these users had auctions spanning multiple days in a row – this is why re-auctions have been occurring each day over the past few days.

In addition, we have one other user (WittyNut) who has not paid for 69 domain auctions, dating back to May of 2017. There was a glitch in our system which allowed this user to continue winning auctions, even though he had outstanding items in his shopping cart. We identified and fixed this issue back in August and suspended the account. We have been in communication with this user and extended a grace period to pay for all of the auctions due to our partial cause in this mistake. (Granting the user the benefit of the doubt here.) Even though this user has promised to pay for these winning auctions, he has only paid for a few, and 69 auctions remain outstanding. We now believe there was intent of fraud on behalf of this user, with no interest in actually paying for the domains. We will be re-auctioning all 69 of these domains very soon.

We want to point out that re-auctions are TINY compared to the total number of closed auctions. Almost all of our auctions close and are successfully paid for by the winning bidder. Nobody is talking about the 98% of the other auctions that are successfully paid for each day.

We have been working very hard to enhance and refine our new user verification process and we have made great improvements, even though this thread suggests otherwise. Approximately one month ago, we added a mobile phone number via SMS or voice verification. Unfortunately, this did not stop the Lumeo.com fraud. We know we can do better and are working on it right now.

Soon we will be requiring all users to provide us with a valid credit card and rolling out additional fraud detection and mitigation tools for our team.

Our goal is to have zero re-auctions. We are committed to making re-auctions a thing of the past. And we are sorry for the issues these bidders have caused.

It’s great that you are working on improving this issue, but I’ve been getting emails about fraudulent bidding since I started using your platform in 2015. With that in mind, I’ve never seen more fraudulent bidding than what is going on right now - and as you said in your post, there is a lot more to come in terms of auctions that will be restarted due to non-paying bidders. Those are not very promising results after 2+ years of working against fraudulent bidding activity.

I am shocked that wittynut was able to bid and don’t pay with impunity between May to August 2017. In addition to the 69 (!) auctions he won and did not pay for, his activity on the platform have surely affected the prices in other auctions in this period as well. When one bidder bids prices up to crazy levels, the other outbid bidders will divert their funds to other auctions, and this drives up prices across the board. And most directly, such a bidder obviously drives up prices for legit bidders in auctions they bid in but don’t win:

 

[Rebies]

All,

a.) What Jeff said above is absolutely correct. Especially with our making this issue right and figuring out a workable solution to where people were bid up by fraudsters.

b.) The blank username is a COMPLETE MESS. I was brought into this issue yesterday around 3pm, and during that user’s termination, XdaydreamX, his alias was deleted by our team. Lets just say I was extremely upset with this, and was a mistake by our team!! This user is fully suspended and we will reinstate his username on Monday so everything above can be seen transparently. Again, reiterating what Jeff already said. And I will say this user was one of our biggest accounts over time, and unfortunately he failed to pay for just a few weeks. (Wow, what a harsh system to kick one of your top users out like this.)

If you want to claim fraud, please know I have stated on here in the past, and continue to state, NOT ME, NOT OUR COMPANY, NOT OUR EMPLOYEES. Not in the slightest chance. And if fraud is happening as you are claiming, I SHOULD BE IN JAIL, just like Halvarez should be. (In my opinion.) That is absolutely not the case. Much of what is here is speculation but far from a conspiracy as some are suggesting!!

Trust me, we care a lot, and we want to ensure you all are taken care of!

Please understand we are working on this. And the blank username, XdaydreamX was a MAJOR mistake by our team and not something I am even remotely happy about. However it was an honest mistake and not malicious in any way.

Andrew Reberry

 

[Chris Hydrick]

@wwwweb @Arca and others --- you all are doing a great job pointing out irregularities. If the Reberry's comments were sincere, I assume they are also appreciative of everyone's effort here. Sincerely, keep up the good work everyone!

I'm still rooting for a happy ending here. What Jeff Reberry said last saturday (give them a week to rectify this and issue a transparent fare proposal on a resolution See below.

Thank you for bringing these things up. We see and recognize the issue here. We are working on a plan to rectify this, please give us this week to fully figure out what is needed programmatically and allow us to give you all an extremely fair proposal on how to resolve this. We will be fully transparent.

With everything going on in the domain auction world right now, it sure would be nice to see DropCatch make everything right, and solidify themselves as the leader is domain auction transparency and ethics.

My fingers crossed for a happy ending here. The industry is in need a transparency win right now. DropCatch may take a financial hit righting these wrongs, but I'm sure said transparency and corrective actions will pay dividends in the long run. They asked for a week (last Saturday) to fully figure out what is needed programmatically and allow them to give the public a extremely fair proposal on how to resolve this with full transparency.

Lastly, THANK YOU @Jeff Reberry and @Rebies for your very professional and promising initial comments to this complicated situation. I hope you don't heed the advice given by others avoiding hot water issues (below image), and you do indeed follow through with the promise to return to NamePros with said transparent proposals, and rectifications.

https://twitter.com/andrewrosener/status/927662796552200195
(screenshot was edited with constructive editing in red font / black strike through lines)

 

[Jeff Reberry]

Quick update. We are still looking into these issues so we can give everyone accurate information when we respond. We appreciate your patience and will try our best to have an update later this week.

We have already identified a handful of improvements we will be implementing.

If you have any questions or concerns until then, you can reach out to support directly at [email protected].

Thank you

 

[wwwweb]

I assume he has been banned as a was result of not paying for his performancetraining.com win (as the auction has now been restarted, which "confirms" that he is now deemed a fraudulent/non-paying winner by DropCatch).

If you look below you can see how much damage a person like tintin can do, then simply run away. This is the dangers with these rogue bidders, they cost honest bidders thousands of dollars. One of many examples.

 

[wwwweb]

PerformanceTraining.com sold for $3200 to "tintin" on Nov 22. Tintin did not pay. The domain auction has now been restarted.

The auction for tuncan.com has also been restarted. The domain sold for $390, also on Nov 22. I don't know who won this auction.

I don’t know why “tintin” was allowed back on the system, but he has defaulted in paying once again today in a 4 figure bid for xtremes.com

A year after being a deadbeat, who knows how many other bids he did not win, or intend to pay for they disrupted. I can’t stand bidders who are playing with money they don’t have, or are front running. Innocent bidders are being fleeced, and it’s not fair.

 

[mr-x]

The real question, is dropcatch.com behind the fraudulant bidding or just exploiting it.

 

[wwwweb]

Just for fun let's take the Aug 6th winner of cannamarket.com WITTYNUT who did not pay for the auction


https://www.linkedin.com/in/jhurkmans/

Title Name Address

Gg Groep Llc was registered under company Id E0035292014-4 and Nevada Business Id NV20141047516. This company type is Domestic Limited-Liability Company. This business was created three years, nine months and five days years ago - on 2014-01-22. Current company status is Active.
Managing Member Jason G Hurkmans 419 Main St., #11, Huntington Beach, 92648, Ca
Managing Member Jason G Hurkmans 226 W. Ojai Ave. Ste 101-274, Ojai, 93023, Ca


There whois used to read as this:

[email protected]

Doing Right Development
Address 419 Main St. 11
City Huntington Beach
State California
Country

United States
Phone +1.7142027688


It seems they have switched the whois on their domains over to another name:

Registry Registrant ID: Not Available From Registry
Registrant Name: Managing Director
Registrant Organization: gg Groep LLC
Registrant Street: 226 W. Ojai Ave. Ste 101-274
Registrant City: Ojai
Registrant State/Province: California
Registrant Postal Code: 93023
Registrant Country: US
Registrant Phone:
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:

This person bid up many of your honest paying members, to which you show very little concern. What happens to all the other valid bids that were made in 2nd, and 3rd position by this person, will you be refunding your core customers?


So Dropcatch, why don't you send a message, and take legal action against this person, and maybe scare some deadbeat bidders straight for payment for the auction they bid on?

I did all the work for you, now all you do is set an example, but as we all know you probably won't do anything, because people like this are great for business.

 

[Michael]

Instead of re-auctioning the domain, it's better to award the domain to 2nd highest bidder. Similarly what GoDaddy does when the 1st bidder fails to make payment. That will also save everyone's time.

I actually like re-auctions because they are more transparent, awarding to the runner-up means only one person knows the winning bidder didn't pay and it is kind of swept under the rug. I'm a little biased though because it helps with our tracking, when our software sees a re-auction we can easily remove the data from the prior auction.

A huge issue with the runner-up idea, which GoDaddy had very serious problems with for the better part of a year, is this: scammers create two accounts which they use to run the price up extremely high within minutes to the point nobody else will join in, and then when it gets rolled back the scammer gets a domain that is worth thousands for $69. Replace the one banned account and rinse and repeat. It wouldn't be terribly easy with DropCatch because they have one of the tightest account verification systems in the industry, but with enough family and friends you could scam them out of tens of thousands of dollars before you run out of IDs.

For what it is worth, because we can easily see when an auction doesn't complete we have a pretty good idea of their non-paying bidder rate. For auctions $100+ it was closer to 1.2% for 2017 which is extremely low, although I don't have an exact number because sometimes I clean them up by hand before our script takes care of them. Flippa, when they were still reporting cancelled auctions to us, was 6-7x that amount at least and sometimes worse. And it's literally impossible to get it to 0% although I applaud them for that goal. Overall I think they do a great job, out of more than 6,000 auctions $100+ this year only around 75 were re-auctioned as far as I can tell.

It's also a really tricky situation that I'm glad I don't have to deal with... how do you handle a non-paying bidder? Imagine someone bids on your site for years, spends tens of thousands of dollars, and then doesn't pay for one auction? Do you ban them immediately? Seems a little draconian even if you're very serious about preventing fraud. And I don't think it would be necessary to roll back the price of every auction they were a runner-up in since they joined the site, issuing hundreds of refunds, since clearly they were participating in good faith up until the infraction. If one infraction doesn't warrant a ban how many does? Does it depend on how many auctions you won and did pay for? Going down this road opens you up to accusations of turning a blind eye to big spenders for your own benefit.

Obviously if someone joins, bids in hundreds of auctions, wins a few dozen, and doesn't pay for any of them all in the span of a few days you're going to owe a lot of partial refunds. I would imagine most non-paying bidders are new to the site, but I bet there are plenty of grey-area situations too.

From what I can tell anecdotally, they tend to batch re-auctions together, which is why the OP might think it is happening more frequently than it actually is having just spotted one of the waves.

 

[Arca]

These names are still held by DropCatch, indicating that they have not yet been paid for (paid for names are moved to the buyer immediately upon payment):

Please let me know your thoughts on this. Have I misinterpreted a legitimate situation or has this bidder been able to continue bidding on domains for more than a month without paying for them?

 

[Jeff Reberry]

Also, regarding auction history.

you have voiced your concerns and we are listening. Going forward, we will display all prior auctions (in the case of a new-re-auction.) We finally have this functionally almost ready to go and will be making this live next week. Any re-auction will show any and all previous auctions on that domain (assuming you participated.) This is more transparent. You will have had to participated in the previous auction to see the history, but going forward this is now a feature we are making available.

 

[Arca]

Some of the auctions won by WittyNut:

Additionally, CannabisHQ.com was won for $3500 on July 21, and has not yet been paid for, yet also not reauctioned despite non-payment. Probably another fraudulent win by wittynut considering his predilection for marijuana names.

 

[Jeff Reberry]

Those blank/missing bidding aliases are an error and this should not have happened. They are related to the removal of the xdaydreamx account (which caused re-auctions this week.) This user, who has been a very long, active, and loyal paying member of DropCatch did not make payment for 11 domains in their shopping cart. As a result, this user was suspended after years of being a paying user. And it is our belief this was purely an administrative error on this user’s behalf, and not fraud. They simply di not make payment before the cutoff date.

Needless to say, the user has been suspended.

After this automatic suspension happened – one of our technical support representatives removed the bidding alias from their account – and this is why you currently see blank records. This should not have happened and we will get this rectified by one of our engineers on Monday. All of those blank aliases will change back to what they should be, “xdaydreamx” on Monday.

Jeff

 

[Arca]

I actually like re-auctions because they are more transparent, awarding to the runner-up means only one person knows the winning bidder didn't pay and it is kind of swept under the rug. I'm a little biased though because it helps with our tracking, when our software sees a re-auction we can easily remove the data from the prior auction.

A huge issue with the runner-up idea, which GoDaddy had very serious problems with for the better part of a year, is this: scammers create two accounts which they use to run the price up extremely high within minutes to the point nobody else will join in, and then when it gets rolled back the scammer gets a domain that is worth thousands for $69. Replace the one banned account and rinse and repeat. It wouldn't be terribly easy with DropCatch because they have one of the tightest account verification systems in the industry, but with enough family and friends you could scam them out of tens of thousands of dollars before you run out of IDs.

For what it is worth, because we can easily see when an auction doesn't complete we have a pretty good idea of their non-paying bidder rate. For auctions $100+ it was closer to 1.2% for 2017 which is extremely low, although I don't have an exact number because sometimes I clean them up by hand before our script takes care of them. Flippa, when they were still reporting cancelled auctions to us, was 6-7x that amount at least and sometimes worse. And it's literally impossible to get it to 0% although I applaud them for that goal. Overall I think they do a great job, out of more than 6,000 auctions $100+ this year only around 75 were re-auctioned as far as I can tell.

It's also a really tricky situation that I'm glad I don't have to deal with... how do you handle a non-paying bidder? Imagine someone bids on your site for years, spends tens of thousands of dollars, and then doesn't pay for one auction? Do you ban them immediately? Seems a little draconian even if you're very serious about preventing fraud. And I don't think it would be necessary to roll back the price of every auction they were a runner-up in since they joined the site, issuing hundreds of refunds, since clearly they were participating in good faith up until the infraction. If one infraction doesn't warrant a ban how many does? Does it depend on how many auctions you won and did pay for? Going down this road opens you up to accusations of turning a blind eye to big spenders for your own benefit.

Obviously if someone joins, bids in hundreds of auctions, wins a few dozen, and doesn't pay for any of them all in the span of a few days you're going to owe a lot of partial refunds. I would imagine most non-paying bidders are new to the site, but I bet there are plenty of grey-area situations too.

From what I can tell anecdotally, they tend to batch re-auctions together, which is why the OP might think it is happening more frequently than it actually is having just spotted one of the waves.

Over the last week they have restarted 20+ auctions for names that were caught between Oct 07-22, auctioned, won, and then not paid for. Based on the numbers you have provided, it seems that 25-30% of this years non-paid for auctions took place just over that two week period? That % may be accurate although it seems somwhat high based on how regularly auctions have been restarted throughout the year, and past years - which has given rise to a feeling that fraudulent bidding is frequently taking place - though this observation is anectodal in nature as I have not kept a database of auctions being restarted.

There is also the 69 to-be-restarted auctions won by wittynut, so in addition to the fraudulent bidding activity covering the two week period above, the fraudulent bidding activity discussed in this thread alone numbers 90. Then there is the auctions that were restarted between Jan-Sept on top of that, minus the two week window, outlined in this thread, that makes it roughly 150 auctions being restarted or set to be restarted this year so far? But regardless of what % this amounts too, I find the number of auctions like this to be much too high.

And wouldn’t you agree that % of auctions involving fraudulent bidding is going to be higher than the % number of auctions being restarted for the same reason? The worst thing about fraudulent bidders isn't winning against them, it's losing against them. Wittynut knew he wasn’t going to pay, and his bidding was just as fraudulent in auctions where he came in second as those he came in first. Auctions are only deemed fraudulent when the winner doesn’t pay. Similarly, golumeo was obviously a fraudulent bidder that attempted front-running the name (this has been confirmed by g o l u m e o (.) com - he was impersonating them to scare away domain investor, while at the same time trying to sell it to them), but his bidding would not have been deemed fraudulent had he stopped bidding moments earlier and let warlord win the name for $14,000. Had warlord won and paid, golumeo’s account would still have been open, and everyone would just have assumed that g o l u m e o (.) com signed up, tried to bid, but gave up, and the name was won by a domain investor over an end-user. Warlord would have to pay $14K due to this fraudulent bidder if he had won and the auction win would have been considered legitimate. In the restarted auction, the name went for $2K. This $12K discrepancy caused by fraudulent bidding in the first auction would not have come to light if warlord had won against the fraudulent bidder. Many auctions involving fraudulent bidding are not restarted, because legit accounts end up winning them. Do you agree or disagree that the true amount of auctions involving fraudulent bidding constitutes a higher % than the amount of auctions being restarted?

My impression of this problem has not been particularly affected by spotting a wave of restarted auctions recently. Personally I have found this to be an issue since 2015, to such an extent that it has really deterred my willingness to bid on their platform (especially when bidding against unknown bid handles). I have been surprised and frustrated by the amount of restarted auctions over the past two years, and have tried voicing my concerns about this issue on numerous occasions here on NP in the past.

 

[Arca]

There is a very active bidder with the bid handle “wnnrscrs”. It belongs to a domainer with 8000+ domains. It appears that he has not paid for any won domains over the past month. I was not able to locate anypaid for domains earlier than mid September. All names won since September 29 appear to not have been paid for yet.

Until you pay for a domain at DropCatch WHOIS will say “This domain was caught by DropCatch.com” and “[email protected]”. All names not yet won or paid for have this WHOIS info. That’s what names won by wittynut still say this if you look up WHOIS for those names. And that’s what WHOIS for all names won by “wnnrscrs” over the past month reflect too, a DropCatch holding account. And they forward to a dropcatch page. If he had paid for them, the names would have been promptly moved to his account and WHOIS would have reflected his personal information. Or could there be another reason for this to be happning? Please let me know if there are other valid reasons for DropCatch to be holding your won and paid for domains for more than a month. I have not been able to think of any reason they would do this. I get domains into my namebright account within 60 seconds paying. But that said, I am not completely excluding the possibility that this domainer just likes DropCatch to hold his domains after he has paid for them (though that would be very counterproductive as he can't sell them when he doesn't have them in his account). So based on what I have seen I assume this is another wittynut situation where a bidder has been allowed to continue to bid without paying, but I am also open to the possibility that I am wrong too (and that's why I have left out his name in this post). Please let me know if you find any evidence that indicates that these names are paid for, or if you think these names are not paid for yet.

Now the strange thing about these seemingly unpaid for auctions is that if I don’t pay for a domain, I can’t do anything at all. I can’t bid on domains, I can’t place backorders, nothing. My account is entirely frozen until I pay. That’s how it should be. But based on the many examples that have come to light so far, this restriction does not affect all bidders. And it does not affect “wnnrscrs” as he is still bidding on domains. Shouldn't he have lost bidding functionality on in September if he didn't pay for a domain then? Letting people continue to bid day after day when they owe money for won auctions doesn't make sense. At least freeze their accounts while you wait for the funds to be added.

Furthermore, here are DropCatch’s terms and conditions regarding this:

Failure to make a payment for a successful backorder within 96 hours (4 days) of that backordered domain being registered by DropCatch will result in an immediate termination of your DropCatch account and the domain will be treated as an “Unpaid Backorder" per this Agreement.

Based on the various examples that have come to light so far, “immediate termination” of a DropCatch account upon non-payment is not applied to all users. If DropCatch followed this part of their terms and conditions, they would have suspended “wnnrscrs” on October 4. Other fraudulent bidders have also kept bidding for longer than 4 days (though if the same rules applied to them as regular users, they would not have been able to keep bidding for a single additional day until they paid). “wnnrscrs” continues to bid on domains. One of the most recent auctions won by “wnnrscrs” is the foodball.com auction (an auction that was restarted due to the prior winner being fraudulet).

Here are some of the auctions won by “wnnrscrs”:

foodball.com - Won for $554 on 1 November - Payment deadline: 5 November
dutchtouch.com - Won for $505 on 26 October - Payment deadline: 30 October
fairmeadow.com - Won for $125 on 15 October - Payment deadline: 19 October
hoefs.com - Won for $418 on 06 October - Payment deadline: 10 October
petitspois.com - Won for $131 on 04 October - Payment deadline: 8 October
paget.com - Won for $1,355 on 04 October - Payment deadline: 8 October
aerts.com - Won for $827 on 29 September - payment deadline: 3 October

Screenshots:

 

[main]

There is a very active bidder with the bid handle “wnnrscrs”. It belongs to a domainer with 8000+ domains. It appears that he has not paid for any won domains over the past month. I was not able to locate anypaid for domains earlier than mid September. All names won since September 29 appear to not have been paid for yet.

Until you pay for a domain at DropCatch WHOIS will say “This domain was caught by DropCatch.com” and “[email protected]”. All names not yet won or paid for have this WHOIS info. That’s what names won by wittynut still say this if you look up WHOIS for those names. And that’s what WHOIS for all names won by “wnnrscrs” over the past month reflect too, a DropCatch holding account. And they forward to a dropcatch page. If he had paid for them, the names would have been promptly moved to his account and WHOIS would have reflected his personal information. Or could there be another reason for this to be happning? Please let me know if there are other valid reasons for DropCatch to be holding your won and paid for domains for more than a month. I have not been able to think of any reason they would do this. I get domains into my namebright account within 60 seconds paying. But that said, I am not completely excluding the possibility that this domainer just likes DropCatch to hold his domains after he has paid for them (though that would be very counterproductive as he can't sell them when he doesn't have them in his account). So based on what I have seen I assume this is another wittynut situation where a bidder has been allowed to continue to bid without paying, but I am also open to the possibility that I am wrong too (and that's why I have left out his name in this post). Please let me know if you find any evidence that indicates that these names are paid for, or if you think these names are not paid for yet.

Now the strange thing about these seemingly unpaid for auctions is that if I don’t pay for a domain, I can’t do anything at all. I can’t bid on domains, I can’t place backorders, nothing. My account is entirely frozen until I pay. That’s how it should be. But based on the many examples that have come to light so far, this restriction does not affect all bidders. And it does not affect “wnnrscrs” as he is still bidding on domains. Shouldn't he have lost bidding functionality on in September if he didn't pay for a domain then? Letting people continue to bid day after day when they owe money for won auctions doesn't make sense. At least freeze their accounts while you wait for the funds to be added.

Furthermore, here are DropCatch’s terms and conditions regarding this:

Failure to make a payment for a successful backorder within 96 hours (4 days) of that backordered domain being registered by DropCatch will result in an immediate termination of your DropCatch account and the domain will be treated as an “Unpaid Backorder" per this Agreement.

Based on the various examples that have come to light so far, “immediate termination” of a DropCatch account upon non-payment is not applied to all users. If DropCatch followed this part of their terms and conditions, they would have suspended “wnnrscrs” on October 4. Other fraudulent bidders have also kept bidding for longer than 4 days (though if the same rules applied to them as regular users, they would not have been able to keep bidding for a single additional day until they paid). “wnnrscrs” continues to bid on domains. One of the most recent auctions won by “wnnrscrs” is the foodball.com auction (an auction that was restarted due to the prior winner being fraudulet).

Here are some of the auctions won by “wnnrscrs”:

foodball.com - Won for $554 on 1 November - Payment deadline: 5 November
dutchtouch.com - Won for $505 on 26 October - Payment deadline: 30 October
fairmeadow.com - Won for $125 on 15 October - Payment deadline: 19 October
hoefs.com - Won for $418 on 06 October - Payment deadline: 10 October
petitspois.com - Won for $131 on 04 October - Payment deadline: 8 October
paget.com - Won for $1,355 on 04 October - Payment deadline: 8 October
aerts.com - Won for $827 on 29 September - payment deadline: 3 October

Screenshots:
Show attachment 72485 Show attachment 72486 Show attachment 72487 Show attachment 72488 Show attachment 72489 Show attachment 72490 Show attachment 72491

wnnrscrs is still actively participating in auctions daily despite seemingly not having paid for won auctions going back to at least 45 days ago. Come on DropCatch. What's going on?