Escrow and Aftermarket Platforms Don’t Do Your Due Diligence

I am not sure why this is the case, but I think some people believe that using an escrow service like or an aftermarket platform absolves them of the need to do due diligence when buying a domain name. This is incorrect, and this thinking could be harmful.

When I buy a domain name, I use a variety of tools and insight to ensure that the domain name was not stolen and being sold by someone who doesn’t have rights to sell the domain name. I also use my instincts to determine if there is something that doesn’t seem right with the situation. There are quite a few ways that I determine that the deal is legit, but I do not rely on the escrow service or the aftermarket platforms to do it for me. I don’t believe either of these options were created to perform due diligence beyond cursory checks, and relying on them to do something important like is not a good idea.

If someone were to steal a domain name and try to sell it – or even if they unwittingly bought a stolen domain name, they could easily use an escrow service to transact or an aftermarket platform to facilitate a sale. Aftermarket platforms generally confirm that the entity listing the domain name for sale matches the Whois lookup, but it would not be difficult to make those match even if a domain name was stolen or otherwise encumbered. An escrow service is there to secure the funds and ensure a domain name transfer to the buyer, not to verify that the sale is legitimate.

Every domain name buyer needs to perform due diligence when buying a domain name in the aftermarket. Using tools like DomainTools Whois history search or Whoisology are two good ways to start. Getting on the phone to speak with the registrant and sending emails to old email addresses are also things I do to confirm ownership. Relying on an escrow service or aftermarket platform is not something I do because they weren’t set up to perform due diligence for the buyer.

Obviously, buying a stolen domain name can have negative consequences. Relying on an escrow service or aftermarket platform to confirm ownership is not a good way to do due diligence.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. Well said Elliot, a proper due diligence is the key.
    It’s the human factor, don’t rely only on technology.

  2. Good point Elliot, most people think that security is in implied in the term Escrow and that they will be safe if they use Escrow. com. But a domain dispute can be implemented within 30 days of transfer,so a couple of weeks after payments received you could suddenly see domain lock on your domains and then you could watch in dismay as they are removed from your account. Thanks for including a couple of methods of due diligence in your article.

    May I suggest you do a follow up article on due diligence, with a complete list of due diligence steps. This would be a very ‘sticky’ article for your site i think, as many domainers would look for it and refer to it over time. It also would be a evergreen topic for domainers i.e. something every domainer should do for any substantial domain purchase. If you had more than 5 due diligence steps that would reveal scam or likely fraudulent sales I would definitely continually link and share that with other domainers. A step you could include would be a link to online tool to check for mixed script fake idn domains. Thanks for great post.

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