Wednesday, January 19, 2011

Shame on Flippa.com for Allowing Scammers Easy Free Run of the Site

Buyers beware. A close friend just paid $1000 for a website on Flippa.com that was supposed to generate $250 of adsense revenue monthly. After the site was transferred, it became clear that seller was a thief.   Traffic monitoring (after the fact, unfortunately) showed that the traffic was all coming from a click script. Click scripts are simple php or java scripts that can be used to fake traffic figures and click on Google Adsense ads. The more serious problem for my friend was that after he put his Google code into the site, Google banned his account for click fraud. An appeal is pending, but this could take months and cost him a lot of revenue from his other websites that use this Adsense account.

Flippa.com and their decision to allow scammy "Autoblog" websites has brought a proliferation fo such ilk to the popular auction website. Autoblogs are usually WordPress websites that run an add-in to steal content from other sources, potentially opening the owner of the site to possible copyright infringement claims.

Here's generally how the scam works:  Seller registers some keywords as a domain that show high competition (something MedicalHeartSurguryDevices.net). They use a script to run up traffic and Adsense clicks for a few months. Adsense seems to lag behind on enforcement for a little while, allowing the seller to show great revenue from the site.  The seller just posts regular server logs as "proof" of traffic, which say nothing about the actual source of the traffic and obscures the click script.   Seller now offers this great money generating website that requires "zero work," usually on the pretext of needing quick money for another project or having to pay bills.  Escrow.com payment is not accepted; they only allow Western Union for the payment. They will also refuse to put traffic monitoring on their website such as Statcounter, because it would reveal the scam.

The new owner pays top dollar for the site. When the dust settles, the new owner has a crappy website that generates no revenue and has no organic traffic, and when Google Adsense fraud enforcement finally catches up, it is the new owner who gets the blame.

I'm mad at Flippa because they have created a market place that provides inadquate protection for the buyer.  They do not do enough to flag questionable website auctions, or to allow others to raise pertinent questions.  Sellers can simply delete any challenging questions that might expose the scam.

Flippa gives "trust points" to sellers who register a Facebook or LinkedIn account. Yet, they don't show buyers the names of those accounts. Since any scammer anywhere can setup a Facebook or LinkedIn account in about 30 seconds, this has the affect of awarding fake trust to the scammer.

Flippa also tries to verify a phone number.  Any scammer can use a disposable cell phone, a payphone or a free webs phone number like those offered through Google  -- it means nothing.

What Flippa needs to do is to RED FLAG, or allow the community to red flag, any questionable auction where the seller:
1. Refuses to use Escrow.com
2. Refuses to setup a Statcounter.com account on the website that would provide public view into the traffic
3. Post the name of the Facebook or LinkedIn account
4. Require at least a 5 day auction for all websites (No more '24 hour sale')
5. Charge a big fee for every first time seller. This would deliver a penalty for scammers who sell crappy websites under new accounts every week
6. Make it much more difficult to qualify for a Flippa seller account.

If Flippa insists on being the marketplace where people get Ripped Off, then eventually the good sellers will leave.  Bad sellers on Flippa drive down trust and therefor keep bidders at pay, resulting in lower prices for legitate sellers.

Wake up Flippa! You are about to step over the edge. Once your reputation is shit, you will never get it back.

9 comments:

high risk merchant accounts said...

Flippa needs to overhaul their security features.

george said...

wow, i just won an auction:

https://flippa.com/auctions/123224

and it appears to fit your description...not sure what to do now.

Pls let me know your thoughts on this one, pls email me on terence bookpal.com.au

Anonymous said...

Hi, just do the math and think like an owner: say you owned the site and made $550 a month X 12 months is $6,600 a year.

Why sell it for $1,500????

Just think!! It sounds like a scam to me but maybe you see the potential in growing this business.

I wouldn't buy it because if they make that type of money why give it away - is like giving you cash stray out without even knowing you. If it was legit than why not have a reserve for like $6,000.

I know that is hard to put value or worth in something like a website real estate property. Don't buy for emotional reasons.

Anonymous said...

I just got ripped off on Flippa too.
I don't think flippa does enuf to protect is users. I will NEVER come back to crap fraud market. I would rather see my money burn.

Angel said...

well good news guys. I'm working on a website auction marketplace for trustworthy people to buy and sell websites. I'm really glad I came across this article. It gave me ideas to implement into my site.

It's almost ready, bookmark me at http://www.flippit.com

Anonymous said...

Another scam pulled on flippa is that people buy an MRR product for maybe USD 10, and then setup a "website" (which is a sales page and a thankyou page normally - 30 minutes work) and try to sell the website for USD 197 or USD 297 with a carefully worded auction that misleads bidders into thinking that they are buying exclusive rights to the product when actually they are buying exclusive rights to the website. I have checked and made comments on this type of auction, only to have my comment deleted and to find a nasty personal message from the seller. Reporting this to flippa seems to make no difference.

Anonymous said...

This post just saved me a lot of money. Thank you! I am ashamed I was so close to losing so much money, but these website scams are much tougher to detect. I was already suspicious but after reading this blog I knew I was being scammed. Everything you mentioned was there: refusal to use Escrow, no proof of traffic sources and refusal to use analytics, high adsense earnings over a couple months and site priced very low. Buyers beware!

Anonymous said...

I'm glad this saved you some money. That is exactly what I hoped would happen.

Just remember, website deals are like busses; there's another one coming in 30 minutes.

DO NOT be led into thinking you have to act now or lose the deal; just let the deal go... you don't need it.

NEVER use Western Union, ever. Too bad if that's their only option in their country.... see you later, scammer.

Anonymous said...

FUCK YOU ALL.. :-)