Some things in life are a certainty. Death. Taxes. Lawsuits. An example: If you steal from your customers for half a decade and then force them to sign a no-lawsuit agreement before you give them their money back, you’re going to get sued.
And that’s exactly what happened to SnapNames. Last week the company admitted that an executive has been bidding on auctions for domain names, driving up prices. Money would be refunded, plus interest, said SnapNames, but customers were required to sign an agreement waiving any legal rights.
Today the Cueto Law Group filed a class action lawsuit against SnapNames. The press release is below.
Sadly, most class action lawsuits result in little money ever reaching plaintiffs – only the lawyers make the big dollars. In our opinion criminal charges should be brought against a wide variety of SnapNames executives as well.
The press release:
Class Action Lawsuit Filed Against Domain Name Provider
Lawsuit Alleges that Domain Name Provider Used Shill Bidders to Manipulate Auctions; may be Tip of the Iceberg in Domain Name Industry.
MIAMI, Nov. 9 /PRNewswire/ — A class action lawsuit was filed today in Miami-Dade County Circuit Court on behalf of lead Plaintiff Carlos A. Cueto and others who participated in online auctions for domain names. In the lawsuit, Mr. Cueto alleges that an executive of the company conducting the auctions acted as a shill bidder to manipulate bids. The domain names were auctioned online by Oversee.Net, Inc. subsidiary SnapNames.Com, Inc.
According to the class action complaint, a former vice-president of SnapNames.Com secretly bid on tens of thousands of domain name auctions over the past four years, driving up costs for other bidders. It is alleged that the company executive set up an account on the Defendants’ system under a false name and, under the name, bid in online domain auctions run by SnapNames.Com, Inc. and Oversee.Net. As a result of the internal employee bidding, the suit alleges the prices to purchase a domain name were falsely inflated, leading to higher costs to buyers and greater profit for the defendants.
The class action lawsuit, brought by the Cueto Law Group law firm, is the first nationwide to allege that a domain name provider used a shill bidder to manipulate auctions. “The domain name industry is the wild west of intellectual property because it remains unregulated. The online community has been up in arms over what they feel has been an opaque system that just begs for transparency. It is impossible to know whether you are bidding against someone that isn’t working or affiliated with the company conducting the auction,” said attorney Santiago A. Cueto.
“Domain names are the last frontier for the average person to stake their claim on some very valuable property. The Defendants’ conduct has made it harder for people to do so and we intend to put a stop to this practice, which we perceive as being a major concern in the industry,” added attorney Santiago A. Cueto.
About: Cueto Law Group, P.L. By combining sophisticated legal representation with the efficiency, focus and personal service of a boutique firm, Cueto Law Group has become the firm of choice for class action and complex international litigation, arbitration and transaction matters. You can learn more about Cueto Law Group by visiting the firm’s website at www.CuetoLawGroup.com and blog at www.IntlBusinessLaw.com.
This is sad. I’ve used their services for years and have never had a problem. I just hope they’ll be around when I need them again.
I give them one year before SnapNames goes bankrupt from legal fees and reduced profits from no longer shill bidding.
“If you steal from your customers for half a decade and then force them to sign a no-lawsuit agreement before you give them their money back, you’re going to get sued”. Snapname execs are not so smart after all are they!
It seems they are still in their suffering period, just like the name shows. But it should be happy end
Name check powered by The Life Design Company:
“SnapNames”
Suffering and experiencing in the beginning, with happiness and luck in the end. Like plums experiencing winter and snow, and expanding its blossoms in spring.
This name is supportive.
“The Life Design Company”
Creating BS descriptions of companies based on their names by pulling thoughts out of one’s ass, with happiness and profit in the end. Like fishing in summer, in an ocean full of suckers. :p
You. Would. Be. Surprised.
But I guess you are wrong person to talk with.
Was has typo in 2nd para
How to wash your hands?
Blame it on the employee. No soap required.
The “employee” is already at risk of criminal fraud charges, so that may not be the cleanest strategy to prevent the entire company from getting nuked when the “employee” is still able to turn state’s evidence.
Good comment from domain name wire, re: other execs
“Rob Sequin
November 9th, 2009 | 12:03 pm
How many crimes did Brady commit?
Did he fake his bank account or paypal info to receive payments from iReit?
Did he fake his W-9 tax form with parking companies?
What did iReit know and when did they know it? If they knew nothing then why?
Same with Craig Snyder, general manager of Snapnames who came from iReit.
I am publicly calling for a statement from iReit and Craig Snyder regarding their involvement with Nelson Brady or their lack of knowledge of dealing with Brady.
Either way, this is a VERY big issue now with the lawsuit being filed and possible criminal charges being filed.
iReit doesn’t owe us an explanation if they don’t want to but Craig Snyder is the general manager of Snap who worked at a company that bought domains from Brady.
If he wants to clear his name and the good name of Snapnames, he needs to release a statement and the sooner the better.”
Good name of SnapNames?
Will be interesting to see just how many people are involved in this suit. “Class Action” always seems huge but the real story will be in the actual numbers.
Without Google/Yahoo making a killing off of parked pages, there would be no “domainers” and fewer of these scammers squatting on domain names.
Excellent point. These parked domains offer garbage traffic to advertisers. Most reasonly savvy advertisers know it; but there are so many beginning or naive advertisers on Google etc. they don’t know any better. So the squatters make money; Google makes money; the domain companies make money; and the advertisers lose money.
Don’t be so quick to generalize parked domain traffic. Some of my best traffic comes from parked domains. It all depends the domain, and the niche.
Man I hope they do, I would love to buy that traffic cheaper than I do now!
Good. They are scammers,
They stole my domain after ordering it for me and then keeping it for themselves.
They arent even using it for anything .
Hope they go bankrupt.
“Sadly, most class action lawsuits result in little money ever reaching plaintiffs – only the lawyers make the big dollars.”
But wait! The plaintiff and the lawyers in this suit are one in the same. How convenient! There’s even a blurb about the law firm in the release!
The civil lawsuit system remains the “wild west”–where self-promoting sleazeballs can sue customer-cheating sleazeballs!
They are not the same person, it is a brother defending his brother, who obviously was a victim of the scheme. Wouldn’t you do the same thing for your family?
How can I reserve the domain name SnapNames.com ? ; )
Here’s one practical solution: set up a domain broker that does not take anonymous bids and which displays the identity of each bidder to each participant of the auction after end of auction. Identity verification would include name, company, phone #, address. Anybody questioning the validity of the auction could readily check the identities. This would make it much harder for a shill, especially an internal shill.
Not good news for Portland (where I’m from). But might be good to have some heavy handed precedence to keep future companies like this from sprouting up.
Michael,
RE: “In our opinion criminal charges should be brought against a wide variety of SnapNames executives as well. ”
Do tell Michael what charges TechCrunch thinks should be levied and who should be charged in your opinion?
Do you have any evidence that establishes or even points to additional participants in the fraud (who are part of Oversee or SnapNames) other than Nelson Brady? You are certainly in a position to have this kind of information come your way. Your comment suggest you do. If so please share. If not then why on earth would you make such an accusation laced comment?
disclosure: I am a shareholder in Oversee.net. I was the first employee, and worked for the company for 8 years. I am currently consulting for the company.
What are you so worried about Ron? I’m sure the Feds will be able to sort it out, I’ve sent all the pertinent information to John Hillebrecht — Chief of the Major Crimes Unit in US Attorney’s office, Southern District.
Maybe you should contact John and tell him what a bunch of good guys you all are.
I was hoping they’d get sued, I was one of the bidders that was emailed about several auctions I won through them that were shill bidded up.
They wanted me to sign as well for a few bucks. lol.
This is the kinda thing you come to expect from these companies anyway as greed always finds a way.
They had it coming. People sue for delayed MMS service rollouts. What were they thinking?
They stole money from all of us and I hope the entire executive team goes to jail for this. They make me sick!
The bad guys got away again. This is how the Oregon AG is responding to complaints of Snapnames fraud. And I quote from the email. (Note that she says they only deal with serious cases of fraud) Since when did multi million financial fraud become insignificant in America? Oh, I remember now. After AIG imploded!
Thank you for the information that you sent us. Although there does not now appear to be a need for an investigation or legal action, we will keep your information on file as part of the public record.
Our primary goal is to identify and eliminate the most serious marketplace violations, and many factors are considered in determining what cases we should pursue.
We appreciate the time that you took to alert us to a possible problem in the marketplace. Your information may prove to be valuable in a future enforcement action.
If you need to contact us about your complaint, please write to me and note your file number: FF11491-09, or contact me by phone at 503-934-4400 or e-mail at mailto:heather.j.mcfarlanemartinez@state.or.us
Heather McFarlane-Martinez
Enforcement Officer
Financial Fraud/Consumer Protection Section
Oregon Department of Justice
snapnames isnt so special after all is it?
Attention -
Present and former customers of
RegisterFly.com
Class Action Lawsuit Against RegisterFly, ICANN, and ENOM
Have you been denied or are you being denied access to your domain names that you have registered at RegisterFly.com?
Have you lost domain names despite attempting to renew them through RegisterFly.com or transfer them elsewhere?
Have you been charged for services that were not delivered by RegisterFly.com?
Was the domain contact and/or ownership information changed without your permission to either RegisterFly.com or someone else entirely?
It’s time to PROTECT YOUR RIGHTS >>
Im shocked-shocked!
http://www.yout...h?v=-Gf8NK1WAOc