Escrow and Aftermarket Platforms Don't Do Your Due Diligence | DomainInvesting.com
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Escrow and Aftermarket Platforms Don’t Do Your Due Diligence

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I am not sure why this is the case, but I think some people believe that using an escrow service like Escrow.com 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.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (1)

    Andrea Paladini

    Well said Elliot, a proper due diligence is the key.
    It’s the human factor, don’t rely only on technology.

    March 21st, 2016 at 4:20 pm

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