Due Diligence Before Buying a Domain Name
If you’re a domain investor, it’s likely that you’ve either been offered a stolen domain name or seen one advertised for sale, whether you knew it was stolen or not. Buying a stolen domain name can cost the buyer quite a bit of money (once the name is recovered) and it could hurt his reputation if he sells it.
In my opinion, it’s the buyer’s responsibility if he buys a stolen domain name, and all buyers should perform due diligence on a domain name before making the acquisition or risk losing his investment and domain name. Just like with physical property, if a purchase is found to be stolen, the person in possession of it will probably lose it and will likely not see his funds returned (I am sure there are cases where this isn’t true – especially when something is bought in good faith, but it’s an assumption).
There are a lot of seemingly obvious clues that can be seen when a stolen domain name is offered, including ridiculously low price, top domain name offered by a new member of a forum without any previous feedback, or someone emailing you in private with a too good to be true offer. While not all of these necessarily mean a domain name is stolen, they are clues that a buyer should note and should set off red flags.
A buyer should use the Whois History tool offered by DomainTools to see if there are any suspicious changes in the Whois data. For example, if a Whois record seems to remain the same for 10 years and the most recent change notes a simple email address update while the rest of the record is the same, that is a big red flag.
A couple of years ago, I was emailed by someone offering a pretty good domain name at a great price that looked to be owned by a lady in New York, although the contact email had recently changed. I was able to get in touch with the lady shortly after domain investor Richard Lau had already done the same, and she was able to recover her domain name by contacting the registrar. Had I not done due diligence, I could have bought this name, which surely would have been taken from my account and given back to the rightful owner once they determined that it had been pilfered from her account.
Due diligence is especially critical when you are purchasing intangible property like domain names.
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