What are the possible implications of this?

[VirtualT]

Say (A friend of mine) sold a domain quite a few weeks ago to BuyerA, and used a popular registrars escrow service.

Payment was made, domain pushed between accounts, everything was fine.
BuyerA then resells the domain to BuyerB, again with a push within the registrar.

Now today my friend receives an email from the registrar, stating that the paypal payment from BuyerA has been reversed, and they are going to put the domain back into escrow from buyerB's account, and asking my friend to refund the money and the domain will be pushed back to his account.

For my friend:
My friend isn't in for a huge loss, he gets the domain back, the domain is worth around 1.5k.
If the domain had been xx,xxx he might have been in for a substantial loss (from the loss of his sale).
The charge back was between the escrow and BuyerA, nothing to do with him.
He has agreed to refund the money out of good will.

For buyerB:
He doesn't know anything about the trouble until the domain disappears from his account.
He bought the domain in good faith, and the chargeback was between the escrow and BuyerA, not from him.

How safe are our domains at this (popular) registrar?

So we are left wondering exactly what we are paying for using escrow at this registrar.
Isn't this what escrow is for, to protect the seller against chargebacks.

What would have happened if the domain had been transfered out of the registrar?
Would they have still asked for the escrow funds to be refunded?

IMO, the escrow should foot the loss for the chargeback (after the transaction has been completed), this opens up questions that need to be answered.

Should this be in the public domain, for the registrar to explain themselves?
What are your thoughts?

 

[scrsteven]

You need to tell us the name of the registrar... from my view, whoever is running the escrow should verify the payment is good and is responsible for handling chargebacks whatever as part of the ~3% to 10% fee they take usually.

Also, the 2nd buyer could not transfer it out to a new registrar for 60 days from the push, which usually is longer than the period for chargebacks etc. I think. This is a security feature of using Moniker escrow.

 

[DNjet]

you might have a legal entanglement coming from buyerB , he owns the domain and he paid for it with proof, and its in his account.

 

[jasdon11]

you might have a legal entanglement coming from buyerB , he owns the domain and he paid for it with proof, and its in his account.

It makes a mockery of that particular companies escrow service.

I'm no lawyer, but I'd say that the company that provided the faulty escrow service should pay the cost - not your friend and buyer B.

 

[jberryhill]

Why do these questions never include this part:

"So, I sat down and actually read the terms & conditions in the registrar's escrow agreement."

If an escrow service is going to accept a form of payment that can be repudiated, and not wait out the time limit on repudiation, then it really doesn't matter whether it was Registrar X or Escrow Service X. It's a dumb way to do "escrow".

I'm no lawyer, but I'd say that the company that provided the faulty escrow service should pay the cost

"So, I sat down and actually read the terms & conditions in the registrar's escrow agreement."

 

[VirtualT]

Why do these questions never include this part:

"So, I sat down and actually read the terms & conditions in the registrar's escrow agreement."

There is actually nothing in the escrow terms and conditions that covers chargedback funds

 

[jberryhill]

There is actually nothing in the escrow terms and conditions that covers chargedback funds

I was driving down the road last month and I looked over at the sidewalk and I saw a three-headed chicken. At first, I wasn't sure what I was looking at, because I thought it could be three chickens standing close together. So as I drove past it, I kept looking, and looked closer, and... sure enough, it was a three-headed chicken right there on the sidewalk.

I couldn't believe it. I turned to the kids in the back seat and said, "Hey guys, you aren't going to believe this, but there is a three headed chicken there on the sidewalk."

"Where?"

"Right there," I said. The chicken had moved a little bit, so I had to take one hand off of the steering wheel, while I was turned and looking at the chicken, in order to point to it so the boys could see it.

Well, believe me, it was a fascinating sight, and the most unusual thing I'd ever seen. I completely forgot I was driving and ran the car right into a telephone pole. This frightened the chicken and it ran away.

So, I called up my insurance company and told them what happened.

The guy said, "Sorry, there's nothing in your insurance policy about three headed chickens, and we can't pay your claim."

Damn.

That wasn't you working at the insurance company by any chance, was it?

 

[JMJ]

I had this discussion with a buyer recently on a sale. These escrow services are nothing but extra steps and added costs. It took us 3-4 days to do a 5 minute deal and the end result was the same. If he or I just happened to be a scammer there's not a damn thing the escrow service would have done except whats happening here. If you guys haven't noticed lately it seems the scammers have decided to set your minds at ease with the use of these escrow services.

As JBerryhill has mentioned but not in detail real escrow services definately won't be inviting you to the closing table unless they have guaranteed the funds for disbursement. In addition to that theres a title insurance which the buyer generally pays for to cover your a$$ aswell as the title company and the lender. The escrow/title company does some detailed research to make sure that all parties involved won't have to deal with any further claims of entitlement in the future. If there does happen to be some issue down the road the insurance pays the claim and goes after the title/escrow company. With online escrow there is no research and no such guarantees.

Moral of the story get to know your buyer or seller.

 

[TheLegendaryJP]

you might have a legal entanglement coming from buyerB , he owns the domain and he paid for it with proof, and its in his account.

I was involvd in a similar situation but for a different reason. I purchased a name, whois changed, name taken back.

End of the day, I got the name back.

The last buyer who had the name taken back has options. He could obvious take his money back and say oh well...OR decide legal action is in order. Unlikely but an option, for either the name or damages. Maybe it was a business venture that monies were already spent on...etc etc etc.

 

[flybuzz]

Be greateful, at least it wasn't paypal chargeback. He would have kissed the 1.5k goodbye.

 

[duceman]

As this is a fourm for domainers to help each other, how about letting us know what escrow service this was so we can be on guard. :greenconfused:

If this is just a hypothetical situation fine as well. At least it got us thinking.

... read the terms & conditions in the registrar's escrow agreement."
If an escrow service is going to accept a form of payment that can be repudiated, and not wait out the time limit on repudiation, then it really doesn't matter whether it was Registrar X or Escrow Service X. It's a dumb way to do "escrow".

I'm in escrow over @ Afternic/Buydomains/NameMedia.... I think I'll do a bit of reading.

 

[VirtualT]

As this is a fourm for domainers to help each other, how about letting us know what escrow service this was so we can be on guard. :greenconfused:

If this is just a hypothetical situation fine as well. At least it got us thinking.



I'm in escrow over @ Afternic/Buydomains/NameMedia.... I think I'll do a bit of reading.

I want to let this thing play out before I can say any more, I will however say that I have made contact with buyerB, he was not even aware that the domain had gone from his account :disappointed:

 

[Dave Zan]

Why do these questions never include this part:

"So, I sat down and actually read the terms & conditions in the registrar's escrow agreement."

That's what I also thought after reading the start. Nowadays, it's almost like a
crime not to read the legal fine prints.

VirtualT, does the registrar's name start with an r and end with a y, perhaps?
The one I'm thinking of also offers an escrow service.

I can't seem to find anything in their legal agreement regarding it. I think I'm a
bit cross-eyed.

 

[Domagon]

Is it Moniker?...

There was a thread ages ago in which Monte acknowledges that Moniker may "take back" domains upto 60 days, and possibly longer, in the event of a chargeback.

Can't find the thread here anymore (did DNF delete a bunch of threads lately?) ... do a google search using moniker paypal chargeback and click on the first cached link.

Anyways, an escrow service that accepts revocable funds (ie. PayPal, credit card, etc) bears responsibility for verifying the funds NOT the seller ...

On a related note, if an escrow service puts legalise that states otherwise, then they aren't performing an escrow service - they can't play it both ways...

For many years I've publicly harped on the fact that escrow.com is a licensed escrow service while many of the other well known escrow services aren't ...

Escrow licensing, while admittedly often not legally required, indicates that the people operating the escrow service understand what escrow really is; know the difference between non-revocable funds and revocable funds, and the risks involved with the latter.

Ron

 

[jberryhill]

I can't seem to find anything in their legal agreement regarding it.

Well I can't imagine what you are reading.

Are you reading the domain registration agreement or the escrow agreement? Because you have to read both.

 

[pam]

I was driving down the road last month and I looked over at the sidewalk and I saw a three-headed chicken.

Drugs are bad, mmmkay?