DomainInvesting.com

I just received the following statement from Snapnames, and I wanted to share it with readers of my blog, who may have been impacted. Below the statement is some commentary and additional information from Snapnames.

“Recently, SnapNames.com, Inc., discovered that an employee had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions.   This is a clear violation of our internal policy and was not approved by the company.

Extent of impact

This conduct affected a small percentage of SnapNames auctions:
·                 Bidding affected approximately five percent of total SnapNames auctions since 2005, most of which occurred between 2005 and 2007, before SnapNames was acquired by Oversee.   To a much lesser extent, auctions in 2008 and 2009 were also impacted.
o               In less than one percent of these auctions, the employee won the auction
o               In the other four percent, the employee lost the auction
·                 The incremental revenue from the bidding represented approximately one percent of SnapNames auction revenues since 2005.

SnapNames further discovered that, on certain recent and limited occasions, when the employee won an auction, the employee secretly arranged to refund from SnapNames to the fictitious account a portion of the winning bid amount.

To avoid any question about whether the company benefited from this conduct, SnapNames will offer a rebate to impacted customers, including 5.22% interest (the highest applicable federal rate during the affected time period), of the difference between the prices they paid in winning auctions, and the prices they would have paid had the employee not bid in the auctions.   Impacted customers will be notified by SnapNames or its representative with instructions for the offer of a rebate.

SnapNames has already begun notifying customers of the situation.

SnapNames also has taken further action to ensure its policies regarding auctions are followed, and the company remains committed to taking whatever action is necessary to protect the integrity of its auction platform.

SnapNames deeply regrets this situation and is committed to addressing its customers’ needs quickly and fairly.

Customers with questions may contact:

By e-mail:                                         support@snapnames.com
Phone:                                                   +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)”

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Last year, there were issues surrounding a Godaddy employee who was bidding on expired domain auctions. At the time Oversee.net told Domain Name Wire, “Oversee.net employees are strictly disallowed from bidding against customers.”

Mason Cole, a spokesman for Snapnames has told me the company will not reveal the name of the employee, but DNN is reporting that the user name involved is “HALVAREZ.” The company will not disclose any legal matters related to whether charges are going to be filed against the employee.

One has to also wonder if Oversee.net has any recourse related to the private Snapnames acquisition. The bidding activity impacted revenues prior to the acquisition, and it also had an impact on bidding activity as well. I want to applaud Oversee.net for taking the actions they did and for coming forward with this information. I am sure it will hurt their bottom line, but their reputation is much more important.

I will post further information as I receive it.