Protect Yourself Against Domain Name Fraud

Everyone who is about to purchase a domain name or website with a domain name should be familiar with the information in this article to avoid being scammed.

If you’re thinking about purchasing a domain name that is already registered by a company or individual, you’ve got to take some basic steps to avoid being ripped off.

First off, you should be familiar with the basics of finding a domain name’s worth. For example, if the domain has a trademarked name, company or product in the name, it’s worth nothing. If someone is selling “googletips.com” to you for $50, it may sound like a huge bargain because you feel that the name is worth much, much more. However, because the domain contains a trademarked name, it is worth absolutely nothing. If you attempt to build a site using that domain name, it will be discovered and you will receive a “cease and desist” order and whoever owns that trademark has the right to own that domain name.

Secondly, you want to be positive that the person selling the domain is actually the owner. You can check the registrant’s information using our domain name lookup tool. You can ask the seller to do something simple, such as modify the technical contact’s name, address or phone number to prove they have control over the domain.

For example, you can ask them to change the technical contact’s name to “Joe Smith”. Again, you can use our domain lookup tool to verify that they have updated the information. This is a simple procedure that anyone who owns a domain name can do within a matter of minutes. If the seller is not willing to do this simple verification for you, MOVE ON! They may not be the actual owner.

Another thing to keep in mind is the payment method you choose to use. Many people are getting ripped off when using PayPal to buy or sell domain names. As the buyer, you can send the money for the domain name to the seller and they send you nothing in return. Being a non-tangible good, you’re not going to get much help from PayPal if any at all. And if you do, by the time you’ve reported it, the seller has already taken off with your money.

As a seller, you can collect money for a domain name, transfer the domain name ownership to the buyer, then the buyer reports to PayPal that they never received the domain. Again, as a non-tangible good, you never know what PayPal will do. Sometimes they will refund the buyer and you’re left with no money and no domain name!

A better payment gateway to use when dealing with domain names would be Moneybookers or even an ESCROW account. These options have much more protection for buyers purchasing domain names.

Something to keep your eye out for is a domain name that is clearly worth much more than the asking price. For example, I’ve seen a few people attempting to sell three letter .com’s for about $80. Anyone in the business knows that a 3 letter .com is worth much more than $80, so more than likely the seller either does not own the domain name, or if they do, they are not planning on actually transferring it over to you. If it sounds too good to be true, it probably is.

As with purchasing any other product, be sure to take the time to protect yourself and avoid being scammed.

5 thoughts on “Protect Yourself Against Domain Name Fraud

  1. Excellent info John!! I had no idea that this kind of thing was even an issue. I’ve never been in the market for a domain that I had to buy off someone personally – I always try to come up with a good unique one on my own, so that I can pay as little as possible!! :)

  2. Thanks for the helpful information!

    I sold a domain name to someone on a forum about a month ago and he took the domain name and got a refund through paypal. Ive got only one thing to say:

    PAYPAL SUCKS!

  3. One of my biggest concerns is getting scammed out of a domain name especially since Paypal will gladly refund anyone for any kind of ‘intangible’ item… whether ebooks or domains and websites, the seller always loses… very frustrating when someone buys/downloads a product and then files a “fraud and unauthorized use of their account” complaint forcing a refund… anybody with half a brain knows they’re scamming the vendor and getting the download for free, that is except Paypal… unfortunately there are no alternative companies to use… MoneyBookers won’t take accounts from the USA which I find rather disturbing… they looked to be the answer… I can’t stand PayPal and their policies… not vendor friendly!

  4. This is exactly why I left PayPal. Since all my sales come from digital goods and services, I was getting RIPPED OFF!

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