Are expired domain auction services doing enough to deal with deadbeat bidders?
Expired domain auctions can get very competitive. But often times the winning bidder never makes the payment, sending the domain back to auction and wasting everyone’s time, not to mention increasing the total prices winners pay.
That’s the case with one NameJet bidder that a reader tipped Domain Name Wire off to. This bidder — “jerry” — defaulted on over $13,000 of domain purchases, and was still allowed to bid in future auctions. In at least one of those future auctions (s)he was the second highest bidder — meaning he inflated the price the winning bidder had to fork over.
Here’s one of the domain names he bid on and didn’t pay for:
Here’s a link to more domains jerry defaulted on at the beginning of August.
So what’s the penalty for defaulting on a purchase at NameJet? $10. That’s according to F.A.Q. on NameJet’s site:
We will attempt to debit the winner’s NameJet account or bill the credit card on file for up to 7 days. If the winner has insufficient funds to pay for the domain, then the name may go into a public auction where the previous winner will not be allowed to enter. We charge a $10 non-payment processing fee if the combined balance of your NameJet account and credit card are insufficient to pay for your purchases. You will receive daily email reminders listing domains that have been awarded but are still pending payment. In addition, you can view your Reports online to see which domains are pending payment. Accounts with excessive non-payments may be disabled by NameJet.
In other words, default all you want until NameJet decides it’s too much. Then it will cut you off.
Is this a fair policy? Without a reasonable excuse, shouldn’t the policy be one default and you’re out?
Expired domain companies don’t have much short term incentive to crack down on deadbeats. As in the example, this deadbeat increased the price on other domains, so it helped the company. (That said, it’s possible that re-run auctions attract fewer bidders. I lost a domain at SnapNames once that was bid to $5,000, and picked it up in the re-run auction for $1,250.)
Here’s an example where “jerry” ran up the price in a domain auction a couple weeks later:
Jerry won the domain booksworld.com on August 24, and defaulted on that domain, too.
A NameJet phone representative told me that customers can submit complaints about particular users through the customer service interface. If desired, users can submit these complaints somewhat anonymously through the external support tool although you need to provide an e-mail address.
But the person who referred this issue to Domain Name Wire did bring the bidder to the attention of NameJet. So far he’s still bidding.
tom says
I wonder if it is an insider job..driving up auction prices.
Ricardo says
I don’t believe Netsol nor Enom would do shill bidding.
Plus, they would not want to get caught doing it.
If they want a particular domain, they just don’t enter it into the auctions or remove it.
There have been times when the initial bidder defaulted and Netsol kept the domain for their own inventory.
1. To sell in the future or
2. To re-auction it when the atmosphere was more finacially beneficial.
One of many examples is ChicagoParks.com
Tony says
I have been in a few auctions where the winning bidder defaulted and was allowed to bid again at Snapnames as well as Namejet so this is not uncommon. It really is unfair to the rest of us.
Andrew says
Ricardo – ChicagoParks.com went back on auction a lot later. Can you elaborate as to reasoning #2?
Rob Sequin says
Deadbeat bidders definitely need to be banned.
The domain should then be given to the second highest bidder for one bid increment over the third highest bidder.
It is extremely unfair to the underbidder to have the name go to auction again.
MsDomainer says
How do you spell S-H-I-L-L B-I-D-D-I-N-G?
Unless this aftermarket business is cleaned up and regulated, you can never be sure that shill bidding isn’t taking place.
Caveat Emptor when bidding in the aftermarket!
Maestrus says
Tom, “I wonder if it is an insider job..driving up auction prices”, maybe you are not far away from the truth!
Stephen Douglas says
I’m not mentioning any names, but shill bidding is definitely employed at most auction houses, but most likely unknown to them, so the host isn’t at fault. The culprits are usually an unscrupulous registrar (resellers) providing the domain name for sale (since they get a % of the profits). Andy points out a bidder’s name in his article that definitely fits the pattern of a “shill” bidder.
Thanks for pointing this out, AA.
Adam says
I know several people who have made mistake bids on namejet. Having dozens of auctions going on at the same time and the page refreshing as you enter a bid in on the “last minunte” page can cause someone to enter bids in the wrong box or misread the name they are bidding on even. I don’t see any reason for this to be occurring frequently and the bidders to stay active. Mistakes happen but not repeats. I wonder how many names I’ve bought “jerry” drove the prices up on.
And who’s this Andy guy ?
INSIDER JOB says
HEY GUYS, THIS ARTICLE IS EXCELLENT.
I’M GLAD FINALLY THESE NAMEJETTERS HAVE FELL OFF THE CLIFF, LET ME TELL YOU WHY.
NAMEJET WITH THEM BEING A RESPONSIBLE COMPANY (YOU WOULD ASSUME THEY WOULD BE), DIDN’T TAKE ANY ACTION TO LET THE BIDDER KNOW THAT THIS TYPE OF ACTIVITY IS NOT TOLERATED…. ONCE…- OKAY, YOU COULDN’T PAY, INTERESTING, HOW MANY REPETITIVE TIMES IT HAS HAPPENED. NAMEJET OBVIOUSLY IS ‘JERRY’ SINCE THEY JUST ‘IGNORED’ AND DIDN’T ADDRESS THE PROBLEM, THUS GIVING THE IMPRESSION TO THE BIDDER TO GO AHEAD AND CONTINUE THEIR DEAD BEAT ACTIVITIES BY NOT FULFILLING THE PAYMENT AS AGREED.
NAMEJET = JERRY
David says
Andrew – Unlike SnapNames, NameJet will only rollback the affected bids on rerun auctions and convert it to a Public auction, so there is no real gamble on their part. This way, it is guaranteed to close much closer to the delinquent price, and in many cases, even well beyond since it is now a Public auction. So the $5,000 / $1,250 scenario you mention is unlikely to occur. Essentially, they have nothing to lose and everything to gain!