By Tom Fell, Risk Management Coordinator, North America
Selling and/or buying domain names through an unsecure provider, can leave you subject to fraud and domain hijacking. Recently there has been a spate of incidents where a seller has in effect had his or her domain stolen when conducting business outside of a reputable marketplace. These innocents happen so often, that there is actually a pattern that has been traced. For example, a domain owner agrees to sell a domain to another party. The buyer pays them directly through PayPal using a hacked/phished account. The seller is unaware that the account was hacked, so upon receipt of the funds the domain is transferred to the buyer. Once PayPal or the legitimate PayPal account holder notices this fraudulent payment, the funds returned to their account. Of course the seller has already transferred the domain and has therefore lost both the domain and the money.
Unfortunately, PayPal does not offer seller protection for intangible goods such as domain names. Registrars will also probably not be able to intervene as they will likely not get involved in third party disputes, especially as the domain transfer itself was legitimate. This means that it is highly improbable that the seller can’t get back either their domain or payment. It also highlights the need to use a secure escrow service for your domain sales and purchases.
Sedo’s Risk Management Team focuses on the security of our services and protecting users from unscrupulous activity. Some of our focus areas include domain ownership verification, secure online payment methods, questionable bidding activity and domain traffic quality.
An example where Sedo’s, Risk Management team prevented domain ownership fraud is when DTE.com and IQI.com were hijacked from their respective owners. The hijacker then attempted to list them for auction through Sedo. Luckily, Sedo’s Risk Management team was able to detect this and prevent the auctions. I am happy to say that the domains have now been returned to the correct owners. This example also highlights the need to use a secure escrow service for your domain sales and purchases. Sedo allows you to buy and/or sell with the piece of mind that you’re not in danger of losing your money or domain.
With a community of more than 700,000 members, we aim to make the web a safer place for you to interact and do business with domain buyers and sellers around the world. Your feedback is crucial to this mission, as the role played by all Sedo users is central to our efforts. If you encounter any questionable activity while using our services please send us an email at [email protected].