StopScum

A false sense of security

The seller has known the buyer on line for a number of years and decided to transfer the domain BEFORE she/he received payment in full. The funds for the purchase never arrived. No money ever arrived. Round one of the war of words starts with emails to the buyer, ICANN, and the registrar. Still...No money arrives.

Tips to Prevent

1. Assume that both the seller and or buyer in a domain sale are convicted criminals and nothing said via email, phone, or in writing is true.

2. Require PAYMENT IN FULL BEFORE you transfer a domain to another party. Exit the deal if the buyer won't do this. No exceptions. Your wasting your time writing ICANN, your registrar, or your host since their is nothing they can or should do if you transfer ownership of a domain before you received payment in full..

3. Larger deals should always use a reliable Escrow Company like https://www.escrow.com/index.asp This procedure protects both parties and criminals won't use an Escrow. The Escrow company collects and holds the funds from the buyer. Next they notify you (the seller) of this fact so you may transfer the domain which normally closes the Escrow. Finally, the Escrow company sends the seller their money.

4. Larger deals (5 figures and more) sometimes involve a promise to pay the remaining balance of the purchase price. These are tricky and require some precautions:

Insure that the buyer has paid enough cash into the deal so they actually have an investment. A 10K deal with 5K cash and a promissory note for the remaining 5K is viable, subject to a few other issues. A sale for 10K with no cash invested and the total price of 10K carried via a promissory note should never be consummated. Just walk away and find another buyer.

A seller should never offer to carry financing on a deal because of the inherent risks of default. Let the buyer mention it and reject it on any deal under 10K. A seller should always negotiate deals which involve financing. Raise the price for financing and lower it for all cash.

See your attorney and follow their advice. At a minimum, you will need a signed Promissory Note from the buyer. How will you collect moneys owned if the buyer defaults? What do you actually know and have verified about the buyer? Did the buyer properly complete a credit application and have you verified this data? Exactly where will the cash come from to make the payments on your promissory note? Are you prepared to live with the reality of default by the buyer and then undertake collection efforts?