Over the years, I have received a number of emails about domain names that were (sometimes) allegedly stolen and re-sold on domain name marketplaces and platforms. I have also read forum and blog posts, as well as seen tweets and other complaints regarding the purchase of domain names that were previously stolen. Domain name theft is still a major issue that plagues the business of domain investing.
With Sedo being one of the largest domain name marketplaces and auction venues, I reached out to a company representative to ask for Sedo’s position regarding the purchase of a domain name on Sedo that turns out to have been previously stolen. I also asked what type of verification and due diligence the company does for domain names listed for sale or auction on Sedo.
A Sedo representative shared the following information with me:
“Sedo takes domain theft very seriously and is committed to protecting domain ownership rights. That starts with preventing the listing of stolen domains on our marketplace in the first place and we employ a variety of security checks aimed at reviewing the information provided in seller user accounts and their new sales listings. Yet despite these measures and strict marketplace terms and conditions, between WHOIS privacy and disparate registry policies, especially after GDPR, it is impossible for Sedo to guarantee that a domain has never been stolen at some point in its registration history or remains subject to some kind of legal dispute.
Similar to trademark concerns, a critical element in this process is hearing from the victims of domain theft to alert us to their legal claims. As you might imagine, these complaints often include former registrants who simply forgot to renew a registration but we take each case seriously. So we encourage anyone who feels they have lost a domain due to fraud to report the theft to Sedo (and other domain marketplaces) in accordance with our long standing stolen domain complaint procedure. Discussion boards are often full of speculation about this domain or that, but in the absence of a complaint from the injured party themselves, Sedo relies on our security procedures and the representations and warranties made by the seller in the listing process. While the domain’s registrar, ICANN, or a court of law are the appropriate venues to resolve a legal claim to a domain, once notified, Sedo’s Security & Compliance team can review a complaint and block a domain from our services pending the outcome of a dispute to protect both the victim and potential buyers. If you or your readers are in contact with a prior registrant who feels their domain was stolen, please encourage them to immediately contact us via the complaint link above.
Unfortunately, as with anything sold on a secondary market, buyers bear a degree of risk related to the representations and warranties of the seller. Once a purchase and sale has been completed, Sedo cannot return any funds already paid to a seller as we are not an appropriate party to arbitrate a dispute. So we encourage prospective buyers to perform all due diligence prior to agreeing to purchase a domain, including research into any concerns about the seller’s ownership status and to ensure that their purchase or intended use does not violate a third party rights. We also encourage buyers to review their registrar’s policies in the event a third party asserts a claim to the domain. If a domain is later taken away from a buyer because of the seller’s violation of the purchase and sale agreement we advise the buyer to seek legal counsel to pursue the seller for damages for breach of contract and will support them by providing transaction records to the appropriate authorities.”
For my own business, I have always felt that it was my responsibility to perform due diligence before buying a domain name – even on a marketplace like Sedo. I recently wrote about calling previous domain registrants to confirm that they sold their domain name before agreeing to purchase it.
Domain investors should understand that domain name theft does happen, and buyers are responsible for doing their own due diligence before buying. I think most marketplaces and platforms do at least some cursory checks to confirm the registrant is the seller, but that does not mean the registrant is authorized to sell a domain name, nor does this confirm the domain name had been acquired legitimately.