This particular news item is reverberating around the domaining blogosphere as I type this – SnapNames has discovered that an employee (now ex-employee) registered a customer account all the way back in 2005 and used it to bid on domain names in SnapNames auctions for at least 2 years.
According to a SnapNames investigation (as per the email SnapNames sent out to all it’s customers), the bidding affected as many as 5% of all SnapNames domain auctions mainly between 2005 and 2007 resulting in an increased overall revenue of 1% in the time period.
The employee in question kept some of the domain names he won, increased bids on others to reach some goal bonuses, and requested refunds for others from SnapNames (all 3 actions obviously being against SnapNames policy).
As DomainNameWire reports, DomainNameNews have confirmed the customer username in question is Halvarez, while Acro mentioned on DNForum even back in 2006 that some folks suspected Halvarez was SnapNames.
So, what’s SnapNames doing about this discovery?
Firstly, they have been big enough to own up to this which is a big move on it’s own on their account.
Secondly, they are putting their money where their mouth is – they have hired a third party Rust Consulting to act on their behalf and refund any moneys earned as a direct result of the said employee’s bids… which means, if an auction you won had its price hiked up by the SnapNames employee you can expect an email from Rust Consulting informing you you shall have the different in price back in cash or as credit in your SnapNames account – the amount will include 5.22% interest (the highest applicable federal rate during the affected time period).
I for one commend SnapName’s actions in this matter – it took a lot of guts to come out with this and deal with it in this way – it’s a sign our industry is growing up and the best way to do that is with transparency all the way.