For Sale Enom encourages auction fraud

[cambler]

I don't need your desk nor do I want it.

I've been retired for a long time and like it that way, I simply call a spade a spade and don't sugar coat anything and don't buy bull---- either.

Have a nice day.

Take a closer look, then. Your spades aren't what you think they are, and your rush to judgement just makes you look like a reactionary.

If this were really about just milking every last dollar possible, I would most likely be telling you all to get lost, and that we'll do whatever we want. Or, rather, just not participating at all. Unless you think this is a big conspiracy and I'm just here to waste everyone's time, including my own.

Must suck to be so bitter all of the time.

 

[GeorgeK]

Oh, if a Platinum-certified bidder did renege, one could send a collection agency after them -- have written contracts that are faxed, etc.

 

[cambler]

Folks can still deposit the $500 fraudulently up front (e.g. stolen credit cards). That's why a "Wall of Shame", with their WHOIS info (true name, IP address used for bidding, email, etc.) acts as a further penalty, i.e. a reputational one. It also keeps eNom honest, because if we see those "Wall of Shame" folks catch a $200 name later, then we know they weren't really banned...

What prevents someone from making it all up and using an IP proxy? Or, under conspiracy theory, eNom could make it all up, IPs and all.

An alternative to the non-refundable deposits is to have credit checking going on everytime an auction hits a certain number. Say $5,000, as an example. A new phase could be started for those auctions, with a new "end date". For simplicity, let us give it a name like "Platinum Auctions". Folks would need a higher "credibility" to enter those Platinum Auctions.

Please outline the procedures to establish this credit check. This seems to be part of the problem - if you're in an Eastern European country, how do I establish your identity, much less your creditworthiness?

Oh, if a Platinum-certified bidder did renege, one could send a collection agency after them -- have written contracts that are faxed, etc.

Not if that bidder lives in any country other than the United States and, perhaps, a very few European nations. And, at that, it presumes that the signed contract is identifiable. Again, short of actually having collected funds on account, there is no foolproof way to positively identify a bidder, much less ensure that they will pay.

If there is, I'd like to know about it.

 

[GeorgeK]

For those unlucky to be in Eastern Europe, you might need to insist that they move some of their higher value domain names into eNom (I would think that you guys know the market well enough to recognize a $5,000+ domain), that are kept on registrar-hold as security (still in their own WHOIS, though). Or, they could be given instructions to WIRE (i.e. non-revokable payment) $5,000 as a security deposit, if they intend to bid $5,000 and above.

$5,000 need not be the magic number. It could be lower, say $2,000. eNom could even pay interest on it, to reduce the "burden" on those who have to put that up, instead of domains as collateral.

Some folks would hopefully have no need to put up anything as collateral, as they've established reputations over the years good enough to be "Platinum-certified" already, and have never and would never renege. And if they ever did, one would send over a collection agency, to get their money. Having a stain of a $5,000+ reneged payment on one's credit history (report it to Equifax, etc.) would have a big reputational penalty, not allowing a person in the US or Canada to easily get a mortgage, personal loan, etc. for the next 7 years.

 

[Whois-Search]

LOL you need this :

http://www.deadbeater.com/images/country.gif

But hey I'd rather trust a guy from czechoslovakia than America lol

 

[GeorgeK]

By the way -- is there any pattern to the fraudulent bidders that you can share? Right now, their identities have been protected by eNom. Instead of disclosing them each individually, though, what % come from which countries? Were the accounts at eNom freshly created, or had they been clients for many years? There are certainly some general patterns that must be evident, given the large number of "Public Auctions" one has seen of late.

 

[cambler]

Having a stain of a $5,000+ reneged payment on one's credit history (report it to Equifax, etc.) would have a big reputational penalty, not allowing a person in the US or Canada to easily get a mortgage, personal loan, etc. for the next 7 years.

Reporting breached contracts is not a function of the three major credit repositories. In order to get that on someone's credit report, eNom would have to sue them and win a judgement before being able to report.

But again, you've made my point for me - requiring a deposit. But someone has already said that nobody would ever agree to that. Is he wrong?

 

[Fearless]

You don't have to look far for a model. Look at Namewinner, the granddaddy of them all. How many names have not been paid for there? I can't think of one and during periods they got everything of value. They start people out with a limit that escalates all the way to unlimited. They charge the credit card of the winner. They don't collect a 3% fee. Is that why Enom doesn't want to adopt a charge as soon as you win policy? They're bent on collecting 3%? Isn't a 20,000% profit margin on some of these names enough?

 

[Whois-Search]

You could always take the Pool.com approach and do nothing - if someone wants it bad enough they will pay

But if the highest bidder doesn't pay don't go emailing gregr for 12k - just put it back on auction starting at $0

P.S. Enom use www.firepay.com

 

[cambler]

By the way -- is there any pattern to the fraudulent bidders that you can share? Right now, their identities have been protected by eNom. Instead of disclosing them each individually, though, what % come from which countries? Were the accounts at eNom freshly created, or had they been clients for many years? There are certainly some general patterns that must be evident, given the large number of "Public Auctions" one has seen of late.

Being fraudulent, the information they give is suspect as well. This is why we have set the $200 limit for accounts that have not had at least some validation done.

 

[JuniperPark]

All we lack right now is the non-refundable deposit. So I ask again - would you be okay with that?

I think the legitimate bidders would be OK with that. People that are just screwing around would not be OK with that.

More importantly, non-resellers should NEVER be allowed to bid. We have all learned that lesson the hard way, haven't we?

 

[cambler]

You don't have to look far for a model. Look at Namewinner, the granddaddy of them all. How many names have not been paid for there? I can't think of one and during periods they got everything of value. They start people out with a limit that escalates all the way to unlimited. They charge the credit card of the winner. They don't collect a 3% fee. Is that why Enom doesn't want to adopt a charge as soon as you win policy? They're bent on collecting 3%? Isn't a 20,000% profit margin on some of these names enough?

Would you back off the 3% already? We've heard you, and I've told you that I know squat about credit cards in that area. The horse is dead, stop beating it already.

So how do you bid $25,000 on a name if you have a credit card with a $10,000 limit, but $4 million in cash in the bank? Many bidders are in just that position, and regularly wire in their winning bids without any problem.

I'm going to let you guys think about this for a while if you wish - I'm getting ready to go out for the night (finally, a weekend when I don't have a looming workload), so I'll be back Monday morning.

It's being a good and productive discussion.

 

[Fearless]

Would you back off the 3% already? We've heard you, and I've told you that I know squat about credit cards in that area. The horse is dead, stop beating it already.

No the horse is alive and kicking until there are answers from those that have the answers.

So how do you bid $25,000 on a name if you have a credit card with a $10,000 limit, but $4 million in cash in the bank? Many bidders are in just that position, and regularly wire in their winning bids without any problem.

I have a $40K limit on my Mastercard. Namewinner attempts to charge the card first then they accept a wire if that is needed.

 

[GeorgeK]

Setting a credit limit isn't easy or fool-proof, as Greg was saying in describing NameWinner's system. Part of it knowing who your clients are...the more you know about them, the fewer the hoops they have to jump through. A newbie domainer from Swaziland should have to jump through more hoops than GregR.

If one wants to approximate NameWinner's system, which is multi-level, quickly, one could have different levels of certification, e.g. "Platinum" to be able to bid more than $5,000, with a $1,000 safety deposit (paid by WIRE) kept on hand by eNom as collateral or a security deposit.

A "Gold" bidder, able to bid more than say $1000, would need to keep $250 as a safety deposit, and so on.

If you combine the above with a "track-record" based system, for those who you already know well (e.g. can verify bidders via telephone, or faxed contracts, or you know them from their reputations over the years and that they own lots of income-producing domains, etc.) then that might reduce the nuisance on those with stellar reputations.

Those who think they're too good to jump through any hoops, and refuse to do anything --- be firm and say "You're the weakest link -- goodbye". That just means more domains at better prices for the rest of us who are honest. Once one place has the most honest marketplace, they'll attract even higher bids overall for their registrars.

That's the main reason you see high prices on drops, vs. auctions at other places like Afternic or Sedo. On a freshly deleted name, in the perfect scenario, the bidders know they're getting a domain with perfect provenance, and that this is their ONLY opportunity to get it. Period. It's that time pressure, that they know this is IT, that makes folks reveal their true valuations.

But, if they suspect "Oh, this is probably a fake auction", or "The shills are really pushing it up....", or "Hmmmm, I wonder if the other people are really going to pay", they'll think "I better lay off...I might have another chance to get it cheaper next week", and this reduces the pressure on them to buy. Making an honest market will thus raise prices for eNom.

 

[ExpireGuy]

We need to have a third party created with high business ethics to take the place of all the current scumsucking leecher registrars-gone-bazaar-merchants.

Anyone care to join me for a business plan?

Unfortunately, it would make too much common sense. For all parties involved to be accountable. It's always the domainer left hanging by the short and curlies. All from a model that they (drop-catchers)created, yet flawed beyond reason.
The problem is that it would be the drop-catchers who would have to abide to this excellent proposal....
Why bother with a business plan? Your target market (scumsucking leecher registrars-gone-bazaar-merchants) don't want to change their spots....and alas no clientel.
A sad state of affairs indeed....

 

[GeorgeK]

One of the best auctions I was ever in was when I got AF.com from FedEx. The way that one worked, we conducted it over the telephone, mano-a-mano. Perfect transparency, as I could see that I wasn't bidding against a "phantom bidder".

As a comparison, Pool's "Challenger" auctions are the antithesis of that, and I think that's one reason you saw so many complaints about their new mechanism.

Maybe eNom can have conference calls for auctions $5,000+, once a week, that are live, and webcast them! arty: That would create some drama, kind of like Sotheby's or Christie's. Lots of marketing possibilities!

 

[Steen]

Maybe eNom can have conference calls for auctions $5,000+, once a week, that are live, and webcast them! arty: That would create some drama, kind of like Sotheby's or Christie's. Lots of marketing possibilities!

And charge $10/mo to listen to the bidders bid! :-D :blush:

 

[mole]

Enough is enough. It's really time to bring on the WLS!

 

[dvdrip]

I really don't understand why this problem is not solved already.

It really easy. From what I see the deposit or preathorisation is very difficult to implement.
There are two sollutions when high bidder does not pay.

First is the continue with private auctions with:
All the users minus the high bidder. Bidding starts at the high bid before the name dropped, not counting the non paying high bidder.
Of course Enom doesn't want this cause they like public auctions that are really unfare to users that made the research.

Second is to allow anyone to place a proxy bid even if it is lower than the current bid and if the high bidder does not pay then award the name to the next high bidder.

Of course I think first sollution is more fare to the users but second might more appealing to enom as many users will put a higher proxy bid if they see the price going up.

 

[Jack Gordon]

just a friendly reminder from your neighborhood mod to please keep all comments cordial and constructive...

great discussion so far!