Due diligence is a must before buying a domain name

When acquiring a domain name, the proverbial phrase “if it’s too good to be true, it probably isn’t true” most often applies.

For example, if a keyword generic domain name, or an LLL .com are being offered for an exceptionally low price, this could be an indication of an attempt to launder the domain.

Domain laundering is the quick sale of a stolen domain asset, usually sooner than later after the theft was committed, for a price appealing enough to generate a quick sale; the recipient of the domain might or might not be aware of its status.

The motivation of the cyberthief is not unlike that of common thieves: dispose of the asset and reap compensation for the act, then promptly disappear.

Depending on the locale of the thief, the monetary profit from this transaction might be adequate or simply handsome: an amount of $3,000 for a stolen domain is a fortune to behold, in many African and Asian countries.

Due diligence is necessary prior to acquiring a domain name from suspicious or unfamiliar sources; the process must be extended to sources that are normally trusted, in order to avoid nasty surprises in the future.

DomainTools provides an indispensable tool – available by subscription – that most serious domain investors can’t live without: WHOIS history.

By examining past ownership records, one can check a domain’s history for suspicious changes. Such changes could be one or more of the following:

  • Several changes of ownership, within a short period of time.
  • Changes in the emails of registrant or admin contact emails, or DNS servers.
  • Invalid WHOIS data: addresses not resolving to a real location, names that appear to be bogus.
  • Phone numbers that do not ring.

Once in the possession of a phone number from a previous WHOIS record, the best thing to do is call the number and politely inquire whether that domain was transferred away from their possession in a lawful manner.

While some might respond in an unfriendly tone, even the response “yeah, I sold it last month, who are you?” might put you at ease. Obviously, when inquiring about confirming such a sale, your openness to share your own info will determine the amount of information that they will share in turn.

Your “due diligence” research can include Google, Archive.org and Screenshots.com – all of which can return additional information about the domain’s ownership.



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