DropCatch to make 297 refunds because 2nd highest domain auction bidders were later suspended for non-payment

DropCatch.com has received a fair amount of criticism in the past few weeks because of some non-paying bidders and re-auctions.

They said there was a glitch with a bidder’s account that allowed him to not pay for won domains but still be able to bid for several more domains. That bidder was suspended.

Now they announced that they have identified 297 domain name auctions where the second highest bidder was later suspended for non-payment. DropCatch has reviewed every auction that has occurred in DropCatch since the beginning of time and accounted for the difference in the end price of auctions by subtracting non-paying users bids from the auction.

DropCatch will issue partial refunds for these auctions. If you have been impacted, you will receive an email with the amount and details.

DropCatch will be updating their terms of service in the next few weeks with updated dates surrounding payments, specifically cutoff times to complete the checkout process. They are also launching several new security features to reduce the number of non-paying users in the system.

DropCatch has decided to make original auction history available to participants of an auction. Thus, if a re-auction occurs in the future – you will now be able to view all of the history from the original auction as long as you were a participant in the original auction. This feature will be live in the next few days.

DropCatch seems to be doing a lot more than what Namejet did in the summer, which was nothing!

Here is a reminder of the Namejet.com auction problems where owners were accused of bidding on their own domain names:

Beware of domain name auction bids at exactly the reserve price at Namejet

Namejet knows about auction shill bidding (now and in the past)

Namejet adds “Shill Bidding Policy” in updated terms of use

Here is the complete announcement from DropCatch:

“The DropCatch team has been working very hard to reduce the number of re-auctions on our platform. Re-auctions occur when users do not complete payment for an auction. When this happens, we put the dropped domain into a new auction (called a re-auction) and suspend the nonpaying user from the site.

Re-Auctions happen for a variety of reasons. The majority of re-auctions originate from legitimate customers who simply did not complete the checkout process before the payment cutoff date. This can be due to international payments, bank wires, splitting up carts, credit cards declined, among various other reasons. In a majority of cases, re-auctions happened from loyal paying customers who had trouble completing one particular payment.

Because we have experienced many payment issues from valid customers in the past, we will be updating our terms of service in the next few weeks with updated dates surrounding payments, specifically cutoff times to complete the checkout process. We are also launching several new security features to reduce the number of non-paying users in the system. We are confident our work and effort will significantly reduce the number of re-auctions in the future.

Additionally, we have decided to make original auction history available to participants of an auction. This is more transparent for everyone. Thus, if a re-auction occurs in the future – you will now be able to view all of the history from the original auction as long as you were a participant in the original auction. This will be displayed on the auction page when you are logged in, and our goal is to have this feature live in the next few days.

We have conducted an internal audit on every auction since we launched DropCatch.com. We have identified 297 auctions where the second highest bidder was later suspended for non-payment. As it could be argued these users might have not intended to successfully win (even though in most situations these users were valid paying customers), we want to presume the worst and treat every one of these situations as people having been “bid up”.

We believe the right thing to do is to make our auction winners whole. We are going above and beyond by reviewing every auction that has occurred in DropCatch since the beginning of time and accounting for the difference in the end price of auctions by subtracting non-paying users bids from the auction. While this was a lot of work and engineering effort, it is the simply the right thing to do. We care deeply about customer trust and want everyone to have full confidence in the DropCatch platform. In most circumstances, we do not believe there was malicious intent and most re-auctions happened because of our strict payment process, which we are now addressing and will be fixing in the coming few weeks. We want to remove any question of doubt, therefore we recalculated every auction that has occurred on our platform and we are making the auction winners whole. If you have been impacted, you will receive an email with the amount and details in the next 48-hours.

In the future, the number of non-paying users will go down significantly. Please note we will continue to monitor all bidding behavior going forward and take appropriate action.

If you have any questions or concerns, or if you have other suggestions for improvements, please send an email to support@dropcatch.com”