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.

 

[werty]

Another suggestion which has been mentioned before but ignored... Make the discount club more transparent. There is no way for a customer to truly know if Huge Domains did planned on getting a particular domain that was backordered by a customer on the discount level or if they are getting cherry picked by Huge Domains.

Being a domainer for 8+ years, I can tell you this platform has really done bad to the serious domain investor, which happen to be your long term customers. Sure, there are people with money to throw away who don't know what they are doing, but these are the short term customers. They blow their bank account and then leave. Which takes me to another suggestion. Make auctions private. Or make auctions with xx numbers of bidders private. Like if an auction has 5 or less bidders make it private. If 6 or more bidders, then public. I just can't see dropcatch as a sustainable platform long term without needing money injected from huge domain sales. I could be wrong but seeing the numbers that's my opinion.

 

[Jeff Reberry]

In regards to WittyNut – we had an internal glitch whereby this user was allowed to bid without having to pay for domains in his cart dating back to March 2017. Therefore, over the course of many months, the user WittyNut was able to continue participating in auctions even though they had unpaid items in their shopping cart. This issue was isolated to this one account. We discovered the issue with WittyNut back in August, prior to this thread. In fact, it was the weed.cc marketplace auction that ultimately made us aware of the unpaid items in this users shopping cart.

Upon discovery, we immediately prevented WittyNut from participating in any additional auctions and demanded payment. This user quickly responded and we agreed on a payment schedule on the remaining balance. This user started making payments and made us believe we would be paid in full for the entire outstanding balance. However, this user still has 69 domains unpaid for and we will be re-auctioning next week.

With regards to CannaMarket.com – user WittyNut won this domain and it is still not yet paid for. This domain will be re-auctioned next week.

With regards to Weed.cc – the user WittyNut won this domain. This was a marketplace auction (not a Dropped Domain Name.) We explained to the domain owner that we were having a hard time collecting payment and offered several different options, and the domain owner opted to have DropCatch cover the winning auction amount. Keep in mind this was a “private seller” domain as part of the new DropCatch Marketplace. This was not a dropped domain. This is why this domain was not automatically re-auctioned and we ate the extra cost to satisfy one of our first marketplace sellers.

We take responsibility for the issues we had with WittyNut. It was our internal error which allowed this user to continue winning auctions without completing payments for outstanding amounts in the shopping cart. But at the same token – WittyNut should not have continued winning auctions that he could not afford. This user will be indefinitely suspended from the platform.

 

[Jeff Reberry]

It’s Thanksgiving here in the US, and this will be my last posting until next week. Happy Thanksgiving everyone.

Reiterating my point once again - WittyNut was a mistake on our end. In no way did I or any of our employees realize how many auctions this user won without paying for outstanding domains in the shopping cart. This issue was isolated to this one account. Every single non-paid dropped domain will be re-auctioned.

Bedsides WittyNut and wnnrscrs - everyone else is current. We have hundreds and hundreds of customers on the DropCatch platform. Go browse through all of the auctions in the past few months - you will not find any other user who is outstanding (other than several days for incoming wires, credit card declines, spilt carts and so forth.)

Our policy is clear - you complete payment for a domain or you will be suspended for non-payment.

Before I sign off for the weekend, I also want to steer this ship back in the right direction….

One of the points someone made earlier in this thread - what happens if a user who has been suspended for non-payment participated in another auction and drove the auction winner up. For example - WittyNut participated and was the second highest bidder in several other auctions.

This thread made us think long and hard about these unique and rare situations - but they do happen. What should be the role and responsibility of the auction platform?

While we can simply shrug our shoulders and claim it is natural artifact of auctions - that position does not sit well with us. We do not “just want to be another domain auction platform” - we want to go above and beyond and earn your trust and respect. We are truly committed to our customers.

We believe the “right” thing to do is to make our auction winners whole - meaning we are going to go above and beyond and issue refunds if this occurred. While this is a lot of work and engineering effort - from the customer perspective - it is simply the right thing to do. We care deeply about customer trust and want everyone to have full confidence in DropCatch.

We are close on our full analysis - but we still need a few more days. We will have final deals after this holiday weekend.

I understand some of you are frustrated this is taking a long time - we agree this is taking a long time - longer than we expected - but we want to be 100% accurate, have the right information, and make sure we have the most customer friendly policy going forward when these situations happen in the future. Stand by - hang tight - we will be going above and beyond.


Sadly, something tells me no matter what we do, you all will never be satisfied. I hope I am wrong.

 

[Michael]

Namebio is still reporting CannaMarket.com sold for 4,383 USD after all this time, and their knowledge that it didn't close.

As Jason eluded to frustration in getting outbid, could be some of those people were sourcing namebio, and seeing higher recent fraudulently bid sale prices thinking they are getting value on their bids, when they never even actually closed.

I mentioned earlier that we only occasionally clean up DropCatch auctions, and we have to wait for the re-auction to finish before removing the previous one. Give me a day at least I was traveling.

Hopefully anyone who was aware of the previous close was smart enough to realize that if there were two auctions at DropCatch in less than a year it must have meant the first one didn't complete, and to disregard the closing price.

Here's what I removed this past run of the script, not sure they're all related to the same bidder:

orderorganic.com 1101 5/14/2017
smokewatchers.com 2550 7/8/2017
biomaps.com 370 7/11/2017
ghorganics.com 1800 7/12/2017
freshshots.com 264 7/16/2017
bluepharm.com 464 7/16/2017
bunnyland.com 145 7/17/2017
cannabishq.com 3500 7/21/2017
7thpower.com 329 7/28/2017
alternativeliving.com 1251 7/29/2017
livingmindfully.com 1113 7/30/2017
ecopot.com 1000 8/2/2017
cannamarket.com 4383 8/6/2017
mymedicine.org 446 8/10/2017
customplastic.com 1551 8/14/2017
bnsc.org 115 8/14/2017
dogtraining.org 1390 8/16/2017
ppaf.org 340 8/16/2017
nqan.com 395 8/17/2017
generaldoctor.com 2228 8/18/2017
matureblondes.com 230 8/19/2017
herbremedies.com 905 8/20/2017
foodguide.org 652 8/20/2017
pawh.com 381 8/20/2017
ehio.com 1150 8/20/2017
kgarden.com 244 8/21/2017
botoxcenter.com 349 8/24/2017
tastev.com 620 8/26/2017
jiiq.com 375 8/27/2017
tesetturgiyim.net 700 10/29/2017
elizabethrichardson.com 244 11/5/2017
iside.com 518 11/5/2017
unilogistics.com 2950 11/5/2017
bitcoinkurs.com 1700 11/7/2017
jvn.net 450 11/8/2017
metromasti.com 494 11/17/2017

 

[main]

https://dropcatch.wordpress.com/2017/12/07/dropcatch-re-auctions-and-winning-bidder-credits/

 

[Skyvisum]

Want to begin my thanking @Arca for starting this thread and to all the great work put in by others here who have worked hard to make domaining more rewarding so we don't pay too much on dropcatch.I really appreciate all your efforts.I just got an email crediting me back $156 for an auction I won at 181 but after credits refund now means I paid $25 after the bidder GoodX1 bid me up.

Thanks for the refund dropcatch and that is a good way to begin and listen to the people here who I owe a lot for their openness and transparency.

God Bless You All for your hardwork.
Skyvisum.

 

[wwwweb]

FYI I got a second chance offer on a 4 figure canna name thru Godaddy, 48 hours after placing the parked nameservers on it, guess who a inquiry came in from, none other than Wittynut. My guess he is still active at Godaddy, and probably didn't pay for that auction, causing me to be the second highest bidder. I also have other inquiries from him on names he didn't pay for that were on at dropcatch after the fact.

 

[tonyk2000]

I beleive what is happening is a natural side effect of "open auctions" system dropcatch knowingly developed, namely:

The same "Jennifer"s that are spamming pendingdelete domains as their own domains for sale ("My name is Jennifer, I am contacting you because I have found out that you have a similar domain name")
are expanding their so-called business by simply A) grabbing current open auctions list B) trying to win something @ any price C) trying to sell it to the same victims that "have similar domains" during 4-5 days.
If they found a victim - dropcatch is paid, if they did not find anybody - dropcatch is not paid.

Is it still 4-5 days period dropcatch allows to pay?

I see no solution here. Will dropcatch stop doing open auctions? Never. Will "jennifer"s disappear? Very unlikely, unless something happens with internet connectivity and/or legal environment, including international law enforcement, in developing countries where most of these Jenniefs are located at.

It would be good idea for DropCatch to start asking users to pre-fund accounts and allow bidding with pre-funded funds only. Or, to switch from open auctions model to closed model. In either case, their profits will go down. I beleive that going to closed model will have less negative $$$ effects though.

But, dropcatch is not asking us what to do, and I highly doubt they will.

 

[DropCatch Support]

Why should they do anything if they benefit from that system. There is no way to totally eliminate fake bidders but there are ways to make their fakery as hard as possible.

I agree but until they loose critical number of customers and their profit starts to plummet they won't do anything.

We absolutely will NOT be waiting until we loose critical numbers of customers to address this. We value customer feedback and we hear your concerns. We are exploring additional methods of verification to help us reduce the number of re-auctions on our platform. While we might not be able to completely prevent re-auctions our goal is to keep the numbers as low as we possibly can. Customer feedback is always welcomed through PM or direct email at [email protected] for questions, concerns, or comments you may have.

 

[wwwweb]

Ok, here is the thing, these fraudlent bidders are costing us in their crossfire.

Cannamarket.com closed aug 6th, high bidder was wittynut, he got carried away in bidding, and did not pay. This domain still has not settled to this day in November almost.

Wittynut was on a tear bidding on so many names during this time.

This fake sale is now indexed in namebio also.

Why would they do anything about it, this is great, these ghosts come bid up the names, they make tens of thousands extra in a day, it is the american dream. A few weeks later another ghost, rinses, and repeats.

I have very little confidence in the dropcatch.com process these days, it is just to wild wild west. A fool and their money theory.

Who is going to pay $14K for Lumeo.com when Novartis has a TM on the word, a $200B corporation who is one of the most active filers of UDRP's.

 

[Kate]

Some people are attempting to flip the domains for profit before the auction ends, others are messed up, or get carried away and can simply walk away without recourse, so what does it matter.

That's it. The old practice of frontrunning.

It is not only unethical but misrepresentation (and most likely illegal) to sell something that you don't own and don't have permission to sell. Sometimes it can even backfire and trigger UDRPs or legal threats. It can also put the winning bidder in a difficult position with tainted merchandise on their hands, cause they don't know the dirty stuff that has been going on behind the scenes.

 

[Arca]

These auctions were cancelled due to fraudulent bidding activity (non-paying winners) and restarted. Below are the original auction results (where winners turned out to be "fraudulent", so these prices were never actually paid by the winners). They also restarted two other .com auctions due to fraudulent bidding that also ended today, but I was not able to catch what they ended at this time, but here are those where I caught with the final sales prices for comparison:

Original auction results:
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

Oct 31, RE-auction results (auctions over but pending payments - green indicates higher price than the first auction, red indicates lower price):
cybercorp.com - Sold for $2,051
sefin.com - Sold for $628
devlog.com - Sold for $210
thermair.com - Sold for $550
simplypretty.com - Sold for $388
finte.com - Sold for $324
kinovo.com - Sold for $411

 

[Arca]

The Curious Case of CannaMarket.com: Three Non-Paying Auction Winners + Inexplicable Fourth Auction Obstruction by DropCatch

It’s probably useful for this discussion on fraudulent bidding at DropCatch.com to add some more detail about this now infamous dropped name. It’s unique in that it was won by three different winners in three different auctions that were all deemed fraudulent. Three winners won but none of them paid. They have still not managed to get a legit winning bidder for this name, but DropCatch.com is now blocking the domain from being restarted and sent to auction a fourth time.

The domain was dropcaught by them on July 7, 2017.

In the original auction at DropCatch it sold for $5,101 on July 10. The winning bidder did not pay, was deemed fraudulent, and the domain was restarted.

The restarted auction ended on July 24, where the domain sold for $5,070. Again, the winning bidder did not pay, due to "fraudulent bidding activity," and the domain auction was restarted.

The third auction ended on August 6, where the domain sold for $4,383. The winner this time also did not pay. DropCatch.com is now blocking the domain from being sent to auction a fourth time, even though they have adamantly stated that "domains that are not paid for by the winning bidder will return to auction". They claim to stand so firmly behind the system they have in place that they cannot make any changes based on the suggestions provided in this thread. But this example shows that they are actually quite flexible with how they run their system, as they decided to not return it to auction a fourth time, against their own rules.

The first two auction rounds have been deleted from the namebio.com database, but deleted sales are not deleted from their daily market reports series. Here are the reports containing the sales numbers I have provided above:

CannaMarket.com Auction 1 - July 10 - $5,101 (non-paying winner)
CannaMarket.com Auction 2 - July 24 - $5,070 (non-paying winner)
CannaMarket.com Auction 3 - August 06- $4,383 (non-paying winner)
CannaMarket.com Auction 4 - not yet announced, even though nearly 3 months have passed.

 

[tonyk2000]

DropCatch stopped answering in this thread. Isn't it a public holiday today in U.S.? I think it is not.

Why remain silent? To have this thread go down and die?

Great insights posted here. DropCatch (or any other domainer-servicing business) should always remember that domainers are great investigators, it is the daily job , and not an easy job.
As Mark Twain said, "It's easier to fool people than to convince them that they have been fooled."

 

[Arca]

These domains were not paid for by the winners and the auctions were restarted. The restarted auctions have ended, and one domain went for more, the other for less, this time around.

October 19 results (fraudulent winning bidders):
WeForce.com - Sold for $665
FoodBall.com - Sold for $760

November 1 restarted auctions results:
WeForce.com - Sold for $750
FoodBall.com - Sold for $554

 

[offthehandle]

Thanks @Arca and @wwwweb for posting the details and user names.

 

[wwwweb]

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.

Wittynut caused you to profit by tens of thousands of dollars, by using this loophole to bid up your customers as he knew he was not expected to pay. He gamed the system, and he cost other bidders tens of thousands of dollars. I know of one auction where he caused a domainer at least $2000 in back, and forth bidding, how will you be compensating innocent bystanders who play by the rules for your own platforms pitfalls?


WittyNut owes about $30K, doubtful he comes up with the $$$, and cost other bidders many tens of thousands more. You will reauction, and probably make more doing so, but your customers are on the losing end. To allow WITTYNUT 3 months grace is unheard of, he was bidding with an unlimited payment schedule, and could care less if he paid, or not, or if he bid others up for the fun of it.

A platform with only a 20-40names being auctioned everyday, not locating the WITTYNUT issue is very troubling. How did this single account get UNICORN status? You profited from this, how do you go about to make this right?

If you admit he was committing FRAUD, you need to refund these users immediately.

Talking about making things right, and doing the right thing are two different things. Obviously the cookie cutter statement your customer support stated was not going to fly, we all knew something was not right, Thank You for doing the right thing, and taking the first step to make things whole, but now you need to compensate your customers for allowing this fraud to happen, and continue for many months.

 

[wwwweb]

Wow! 69 unpaid auctions? How many auctions was he the second highest bidder on? Winners should be refunded some money on those at the very least. This is worrisome on multiple fronts..

69 unpaid auctions, is over 100+ affected honest bidders, let's see if Dropcatch does the right thing here, or we go down the Halvarez Snapnames road here, as we know Howard Nelson Brady.

This the affects of Halvarez's actions

• 5% of auctions were bidded on by employees
• Less than 1% of SnapNames auctions during this period were won by the employees
• Brady’s bidding affected approximately 1% of SnapNames’ auction revenue during the full period.

"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 are talking about it now, according to your support teams message, everything is under control, and being monitored, clearly it wasn't.

People are going to start doing the calculations, and coming up with hundreds of dollars to thousands of dollars in damages caused by leaving WittyNut on the loose.

The right thing to do, would be to cancel his bids, and offer it to the second highest bidder taking out WittyNut's bids. BUT, NO you chose to enter into more games, and agreements with WittyNut, and continue this charade, and Dropcatch/NameBright/HugeNames must do the right thing now.

I don't know if you have it in you to do the right thing, and you probably won't. In turn I would tell dropcatch clients to start reviewing their transactions of reuactions, and non actionable auctions, and start taking screenshots, to see who, and how much. We already know Wittynut had a significant bidding history. The KEY number is he won 69 auctions, but if you take into account the auctions he did not win, and artificially inflated the price one these unwon auctions, it is an ugly number for the consumer. This however would be a great, even more profitable number for Dropcatch. Unpaid auctions by WittyNut can always be reauctioned, or moved over to HugeNames, or what a great social experiment to leave this NUT on the loose.

Funny, how this 1 account suddenly got a magical cart that allowed him to keep stockpiling names without paying. Some would say wow, I owe $10K, $20K I better stop, and pay, this person kept bidding, and Dropcatch kept allowing it to happen. The damage this person was doing by Dropcatch not having the proper checks, and balances done on their won auctions is very concerning.

 

[wwwweb]

Here are legal Violations that seem to have taken place in

-Violation of Auction Law
-Violations of Civ. Code (having to do with deceit and fraud)
-Violation of . Bus. & Prof. Code (Unfair Competition Law)
-Breach of Fiduciary Duty
-Fraudulent Concealment
-Restitution/Unjust Enrichment

 

[Jeff Reberry]

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.

Xxxweb: please be aware that we have an extremely strict company policy that no employee or employees friends/family are allowed to use the DropCatch platform. What has happened in this thread is in NO WAY similar as our company does not have any connection to such non-payers and fraudsters.

 

[Arca]

Do you happen by chance to have the bidding history for sendhome.com? Looking at these kind of domains I see them selling for $20-$79 in aftermarkets, what kind of people are bidding them to $200, then don't even bother making such a small level payment, these are people who have the same privilege to bid thousands in other auctions also.

No, they delete the bidding history when an auction is restarted.

So AIRCGNT or James Park's from South Korea prior username, had a username change to XdaydreamX, and he was one of the most active bidders on dropcatch, and I can see why he is so dearly missed. His username has been reinstated from the blank box to XdaydreamX, so everyone who was wondering who outbid you, it was him I would assume.

James H Park is ckrgksanrndghk on dropcatch. He is a paying bidder and still active. Can't see any problems with that handle.

XdaydreamX is semi jung (now banned). A strange thing is that arirangcnt won names used to show the name yunkook jung and the email [email protected]. However, the domains won and paid for by XdaydreamX show the name semi jung and the email [email protected].

 

[Arca]

I have discovered one very active bidder who appears to have won numerous domains over the last month and not yet paid for any of them. Domains won by him over the past month are still held by dropcatch, just like the domains won by wittynut. Because dropcatch requires won domains to be paid for within 4 days, this means he has not yet paid for the domains. Once you pay they transfer the domain to your account.

Why was he able to continue bidding on and winning domains for another month after the first non-payment? Shouldn't his account have been restricted upon the first non-payment? Seems like another wittynut-ish glitch. Will put together a more detailed post about it later today or tomorrow.

 

[wwwweb]

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):
Show attachment 72492 Show attachment 72493 Show attachment 72494 Show attachment 72495 Show attachment 72496 Show attachment 72497 Show attachment 72498
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?

Great backcheck work!

Another backcheck is typing in the domain, and it goes to the namebright holding whois page which usually indicates it is yet to be paid for.

When it is finally paid, it usually moves to a coming soon construction page.

 

[Arca]

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.

The terms I quoted above are actually for won backorder that don't go to auction, although the terms for domains won in auctions are pretty much the same:

1. Payment for Winning Auctions A winning bid on a domain auction must be paid by the prevailing customer within 96 hours (4 days) of the end of the auction. All payments must be made in accordance with all payment terms of this Agreement.
2. Unpaid Winning Bids and Re-Auction of Domains In the event a customer fails to pay for a domain they won in auction within 96 hours (4 days) of the end of the auction, the domain will be re-auctioned and the delinquent customer’s DropCatch account will be terminated. The customer will be permanently terminated from DropCatch and not be allowed to use DropCatch or any of its services in the future. A re-auction of a domain will follow the same auction process as set forth under the “Unpaid Backorders” subsection of this agreement. If a domain has been auctioned 2 or more times, and in both cases a non-payment, DropCatch may choose to offer the domain to a second highest bidder or decide not to re-auction the domain name.

XdaydreamX did not pay for weeks before being suspended (this info was provided by Andrew Reberry). Wittynut didn’t pay for months (info also provided by them). And wnnrscrs has not paid for a month. These examples clearly show how they continue to break their own terms and conditions. They do not require certain bidders to pay within 4 days, and they do not terminate the accounts of such bidders until they don't pay for week/months. This is a stark contrast with what is outlined in their terms and conditions.

What are the legalities surrounding DropCatch enforcing a certain set of terms and conditions for regular users, and another different and unspecified/secret set of terms and conditions for the big spenders?

 

[Michael]

I knew about it and completely agree with you on it. My main purpose of saying was to implement a way to track such behavior as well if there is some regular activity going between 2 bidders every now and then or even with bidders who win the auction regularly by being 2nd bidder (due to winning bidder being fraudulent) which should flag their system to take notice and look into the issue further manually.

It's difficult to make such changes but there has to be some strict action to be taken since many regular bidders have paid thousands of dollars just due to fake bidders. In the end, it's DropCatch who has made the profit.

Unfortunately it isn't that simple because the scammers cycle through a lot of accounts. Imagine this:

Account A and Account B. Scammer uses them to run up an auction with B winning, but then doesn't pay. It gets rolled back and A wins for peanuts. Now A is flagged to watch for them winning cheap and B is banned.

Create account C. Run it up with A and C, with A winning and not paying and it getting rolled back to C. Now A, which was sort of compromised anyway by being flagged is banned, and C is now flagged.

Create account D... rinse and repeat. See what I mean? No flagged account would ever win again so you wouldn't be able to stop it with your suggestion. The scammer could also just create two new accounts each time instead of one, and never even use a flagged account again.

The only way to have a clean runner-up rule is if you have someone monitoring every single auction looking for these unusual bidding patterns. But that doesn't even really work all that well because of proxies. If Account B puts a proxy of $10k early on and Account A puts a proxy of $9k on a domain that is worth maybe $8k even a human would have a hard time deciding if those bids should be cancelled, the person would have to be an expert appraiser. Many people set proxies early on and it is legitimate.

It would be interesting to know why people are winning expired auctions and then not paying. I suspect sometimes they get carried away with auction fever and then have buyer's remorse. Sometimes they make a typo in their proxy bid and don't realize until the auction is over. Sometimes they bid in a lot of simultaneous auctions expecting to get outbid on most of them, but then win more than they were planning on and can't afford to pay up. But I can't think of any nefarious reason to bid up an expired auction and risk getting banned when the domain will be re-auctioned anyway (and it often ends higher than the first auction). Shilling doesn't make sense for expired auctions, only public ones.

So by using the runner-up rule, you're basically getting rid of stupidity but inviting outright fraud, which in my view makes it the worst possible solution. You have to remember that a re-auction is not a positive outcome for a non-paying bidder, there's no end game in that scenario where the fraudster wins. I don't think people are doing it for personal gain, I think they're just dumb.

Here are some ideas to reduce non-paying bidders that I believe would be more effective:

A combination of runner-up and re-auctions. Use the runner-up rule if the rollback is less than X% of the closing price (something small like 5% - 10%), and re-auction if the rollback is more than that. This makes the runner-up abuse way less profitable to the point that most won't attempt it, but still reduces re-auctions.

Improving account verification to make it difficult to get an account.

Maybe new accounts have a probation period where they can only participate in a limited number of auctions or have a cap on their total outstanding bids until they prove to be serious. If a new account joins just to bid on a specific, expensive name they have to contact support and provide proof of funds (bank statements, etc) or make a good-faith deposit to bypass the restrictions.

When the platform confirms a bid, instead of just showing them the amount and having them click OK (which they might not read carefully), make them type the bid out a second time and compare them (two matching typos in a row are very rare). This will all but eliminate errors.

Show the user a running total of his current outstanding bids. Like "If you aren't outbid, you're currently on the hook for $3,456." Make it really prominent. That would serve as a reminder for people who do a poor job of bidding in multiple, simultaneous auctions how much they could get stuck paying. If they can't afford that amount they might think twice before taking the lead in yet another auction.

Create an AI where you train it on data from bad actors, like how long between creating the account and placing bids, number of simultaneous bids placed each day, number of simultaneous auctions led each day, number of auctions won and paid for, geo location, how often they're logged in, etc. Have it at least flag, but maybe even automatically limit accounts that are acting suspiciously.