Home / Finance / SEDO’s Domain Brokerage Service SCREWS Me!

SEDO’s Domain Brokerage Service SCREWS Me!

March 27, 2009 By 69 Comments

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Folks, I’m here to share a story with you that I can hardly believe occurred. It’s the story of a major violation of trust between myself and a company we hired to specifically represent us as the buyer’s broker in a purchase transaction. That company is SEDO, and this story is, well judge for yourself… but to me it’s unbelievable.

The story begins when I decided I wanted to obtain a domain, related to OneMansBlog.com, that was already taken and which I quickly determined was parked and had been registered at Sedo.

Sedo is a large, accredited top level domain registrar. So, I first did a quick search on their site to see if the domain was listed for sale, and when it wasn’t found I decided to check out their offer to “broker” the purchase for me.

Now, I thought about this for a minute and realized that if I were to approach the domain owner myself they would likely see that I own OneMansBlog.com and then be anxious to charge me extra for the related domain. So it sounded reasonable to enlist the assistance of a middleman in the process.

After reading all of Sedo’s documentation regarding rules and policies, I ultimately decided to give it a shot. We created an account and filled out the form to get them started. As part of this form, Sedo asked for the MAXIMUM amount that we were willing to bid. At first this made me very nervous, but they provide a link right there on the page that offers the following explanation:

learn-more

Question

What is an investment limit?

Answer

When you apply for Sedo’s buyer-side brokerage service, you will be asked to enter your investment limit for purchasing the domain. Your maximum investment limit is the highest price you would be willing to offer for the domain. This information is confidential, and will not be disclosed to the domain owner. As always, your broker will begin negotiations at a fraction of your investment limit and will work to acquire the domain at a fair and reasonable price.

If your application is approved, your broker will use your investment limit to determine a strategy for negotiations.

So after reading that, I was reminded of eBay, where I often put in a maximum price and have never felt cheated. I figured that I would go ahead and give them some latitude, and instead of the minimum bid of $500, I went ahead and upped their limit to $1,000. This was because I trusted them to do the right thing.

Now, according to Sedo’s Domain Brokerage Service Terms and Conditions, the first step after acceptance into the brokerage program was as follows:

2.1.2.3. Assignment of Domain Broker

Upon the successful application to the Buyer Brokerage Service, you will be assigned a domain broker in accordance with the approximate value of the domain you wish to acquire. Your domain broker will then seek to establish contact with you through the contact information you have provided in your Sedo user account and shall explain the domain brokerage process and a schedule for providing updates on the course of negotiation.

So our expectation was that, within a couple of days, we’d have a little e-mail or phone chat with the person who was going to be “negotiating” on our behalf, after which time that person would begin to attempt contact with the domain owner to open a dialog and see if we could acquire the domain.

Imagine our surprise when the very first response we received after our automated sign up e-mails was as follows (personal information hidden, obviously):

—————————————-
From: XXXXX XXXXX
Date: Wed, Mar 25, 2009 at 5:25 PM
Subject: Brokerage request for XXXXXXXXXXX.com
To: XXXXX XXXXX

Hello,

A client of mine is interested in this domain and is prepared to offer you $1,000 for it.

Please let me know if you would like to accept their offer.

Thank you for your time. I look forward to your response.

To reply to this message please visit the Brokerage Status page: https://www.sedo.com/member/brokerage/status.php?XXXXXXXXXXXXX

Best regards,

XXXXX XXXXX
Domain Broker
–
Sedo.com, LLC
tel +1 ( 617) 499 – XXXX • fax +1 ( 617) 499 – XXXX
http://www.sedo.com • mailto:XXXXXXXXXX@sedo.com
—————————————-

Now, I don’t know how that strikes you, but even if we forgive the fact that our “broker” skipped the formality of getting in contact with us and setting our expectations, I still see two glaring issues:

  1. He sent the e-mail to us, not the domain owner. Presumably this was just an error (a really, really bad one).
  2. There was absolutely no “negotiation” taking place on our behalf. Despite the promise to, “…begin negotiations at a fraction of your investment limit….”

I mean, why in the world would we “Hire an experienced Sedo broker to negotiate an acquisition…“, if all that really means is “we’ll send an e-mail on your behalf with your maximum offer to the domain owner”?

Keep in mind that they charged us $69.00 the minute they accepted us as clients, and that there was going to be a 10% commission fee on the final negotiated price.

Now if that commission fee bothers you, as it did me initially, remember the previous promises they made. And remember that this is a large, well known domain registrar. Besides all of that, as far as I’m concerned, the terms I agreed to with Sedo created a Fiduciary Responsibility on their part. What is that?

In a fiduciary relation one person justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.

Now the question is, what should I do about this entire affair? Feel free to share your opinions, and I’ll follow up with another post later as the story unfolds…

Filed Under: Finance, Work Tagged With: , , , ,

Comments

  1. Mark Jaquith says:
    March 27, 2009

    Wow. You should demand your money back, and a full explanation. It’s possible that this is just a rogue agent acting unethically, but in any case, it’s utterly unacceptable. You’re lucky they made the mistake — else you could have been screwed without ever knowing it.

    Reply
  2. Mattb4rd says:
    March 27, 2009

    Mr. P,

    I would definitely let them know that you intend file a formal complaint against a professional fiduciary with the appropriate regulators in your state. I would also have my personal attorney compose and send a letter notifying them of his client’s intention to pursue reimbursement for damages and punitive actions within the limits of the law, but in the interest of avoiding that, he has informed me that he will accept a settlement in the amount of $XXXX.XX, which includes my fee and his lost time and wages incurred as a result of having to deal with this troubling situation.

    Mattb4rd

    Reply
  3. Hrafn Th. says:
    March 27, 2009

    Ouch. That sucks. Are you sure they didn’t send the email to the domain owner as well?

    Reply
  4. Kai Lo says:
    March 27, 2009

    The agent is doing a terrible job. I wouldn’t recommend anyone to use that company. Seems like the agent cares more about the commission than to help you.

    Reply
  5. Greg Lewis says:
    March 27, 2009

    I’d make them give me the domain for free.

    If they refuse, then threaten to take them to the attorney general’s office. Since they get a commision on the final price, its in their best interest to use the maximum, which they did…problem is that they state “As always, your broker will begin negotiations at a fraction of your investment limit and will work to acquire the domain at a fair and reasonable price.”

    They are clearly breaking the law…and you have the evidence to prove it.

    Reply
    • huh uh, i don't think so says:
      November 24, 2010

      “I‘d make them give me the domain for free.”

      Uh, excuse me? That domain is owned by an actual person and parked on Sedo, not owned by Sedo. Sedo cannot give away property that belongs to someone else.

      Reply
  6. Ziggy says:
    March 27, 2009

    Wow, that sucks,John.

    I would:

    1) Cancel all transactions with SEDO and request your money back. They breached their agreement with you and, thus, forfeited their chance to continue a business relationship with you.

    2) Check out GoDaddy (http://www.godaddy.com/gdshop/broker/landing.asp?ci=8995) and try them out. I had a successful transaction with them on the one domain name I wanted. My max was $500 and they got it for me for $175. Smooth transactions all the way.

    However, the owner of the domain that you are trying to get might have recieved an email as well and now know you are interested which might have just boosted the price.

    I could always request a price for you as well if you like. No one knows me. :-(

    Reply
  7. John P. says:
    March 27, 2009

    You’re right Mark. And what really bothers me is… how many times, and for how long, have they been doing this to other people? And only now a mistaken e-mail gives us all a glimpse into the practice…

    John P.

    Reply
  8. John P. says:
    March 27, 2009

    I can’t be sure, but I think the “Broker” is still under the impression that he sent it to the right address and just hasn’t gotten a response. I’m still trying to determine how in the heck to go about responding and escalating the issue. It’s a pretty big company so how do you find the person to appeal to?

    Perhaps the right person is actually not in the company at all… but is the Attorney General of the State of Mass, or Texas. And maybe the Better Business Bureau.

    John P.

    Reply
  9. John P. says:
    March 27, 2009

    Greg,

    Maybe your dad should take on the case for me and sue them back to the stone ages. ;-)

    John

    Reply
  10. Greg says:
    March 28, 2009

    Where is the company based, if its NY he sure can.

    Reply
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