Beware used domain names and the pump & dump scam!
Thinking of registering used domain names? It’s a wise investment if the domain history is credible. Ask the seller questions, lots of questions. And you must, at all costs, watch out for the pump and dump scam. Never heard of it? Quick, read this…
The victims
The pump & dump scam targets people looking to register used domain names. When choosing a used domain name, the traffic stats are often what buyers base their purchasing decision on. This makes them vulnerable to the pump and dump scam.
The pump
The pump & dump scam involves a fraudster manufacturing high levels of traffic for pre-owned/used domain names. They pump the traffic with tricks such as buying hundreds of links. Or they send spam email inviting visitors to the website. There’re also companies that sell fake traffic!
Traffic pumped, the domain name is now a valuable commodity.
The dump
Now the fraudster targets potential buyers. They’ll list the domain name for sale on an aftermarket site, boasting healthy traffic stats along with an inflated price.
It’s possible to falsify WHOIS records and create a new identity. This means you’ll also find fraudsters targeting online forums. But the risk of being unmasked by savvy domain investors is high. They tend to ask too many questions.
Register authentic used domain names
If you use forums, avoid asking for opinions about pre-owned domain names you’re interested in. Fraudsters watch these sites looking for potential buyers. They could register the name before you. Then approach you offering to sell the name for an increased price; justified due to the excellent traffic stats.
If it looks too good to be true, it is! You have to ask the seller questions. If the traffic stats are amazing but there are no backlinks, ask yourself why. Always look the domain name up in local directories. If it doesn’t appear, ask why? Scrutinise the history of the domain name. Was it used on untrustworthy websites? Is it labelled for spam, malware, hacking, or illegal activities? Take a look at this post that explains the steps you need to take when buying pre-owned domain names.
If a seller is reluctant to share information – run away!
History of the pump & dump scam
It started as an investment scam. You may have read recently that Twitter was being purchased for $31 billion. It was untrue. The likely scenario is that a fraudster who owned Twitter stock posted the story. Once the value of the stock increased, the fraudster sold their stock for a nice profit. Pumped and dumped!
If you’d like some advice about registering used domain names, please don’t hesitate to get in touch.
Aftermarket sites are for the most part, unaware of these scams. They’re used because they’re trusted by buyers. An aftermarket site acts as the technical intermediary. T&Cs normally state that the site does not guarantee traffic stats.
