Class Action Blog : Consumer Fraud, Consumer Protection, Securities and Antitrust Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz

Class action lawsuits against domain name auction site SnapNames.com have been filed over the past few weeks after the company announced that a former employee was bidding against potential customers in domain name auctions.  SnapNames -- which resells expired domain names and runs hundreds of auctions a day -- calls itself the largest resale marketplace for domain names.  The class actions filed against it include persons and/or businesses that participated in SnapNames.com's online auctions.  The lawsuits allege that a former vice president at SnapNames.com secretly bid on tens of thousands of domain name auctions over the past four years, leading to falsely inflated prices.

SnapNames.com, a subsidiary of Oversee.net, sent out notices last month that it had discovered an employee bidding on domain name auctions, and it is alleged that the employee participated in over 50,000 auctions.  In its notice, SnapNames said the shill bidding affected about 5 percent of all its auctions since 2005, with most of the activity happening between 2005 and 2007.  Some auctions in 2008 and 2009 were also affected, it said.  The former employee won the auction in less than 1 percent of the cases, but was allegedly able to drive up the purchase price of the domain names by millions of dollars.   Indeed, as a result of the internal employee bidding, the class action lawsuits allege the prices to purchase domain names were falsely inflated, leading to higher costs to buyers and greater profits for SnapNames.

If you or someone you know participated in an auction on SnapNames.com, please contact us immediately to discuss your legal options.

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Everywhere we turn, it seems that we’re being assaulted with extra fees; $1.50 to use an ATM machine that’s not affiliated with your bank, $10 disconnect fee to change television service providers, $2.50 “fuel surcharge” on home delivery of the daily newspaper, $3.00 “surcharge” on in-room food service at a leading hotel, $50 for a second checked bag on a commercial airline, and the list goes on and on.   But have you ever stopped to consider whether these fees are actually permitted by the business that’s imposing them?   Have you ever stopped to ask “Did I agree to this when I accepted the service that’s being provided to me?”   Unfortunately, the “cost” of asking these questions and seeking to challenge the imposition of such fees is often not worth the aggravation and time that’s required to pursue it.   To many, the thought process goes something like this:  “20 minutes on hold with a customer service representative who, after listening to my plight, only passes me off to another rep, or pay the $2.00 fee?  Pay the $2.00 fee.”   And that’s where a class action comes in.

By aggregating the small claims of a great many people, the business practices of an otherwise large, corporate concern can effectively be challenged.  Class actions are successfully prosecuted when the barriers of entry to filing small, individual claims are high, and the injuries suffered by class members arise from a common course of treatment perpetrated by the business whose charges are being contested.   For instance, if the filing fee to commence an individual lawsuit would dwarf the damages that an individual consumer seeks to recover, then there’s an obvious disincentive to bringing an action on one’s individual behalf.   But if a class of persons who suffered the imposition of the same fee can be bundled, then the cumulative weight of such aggregated claims can be leveraged to obtain a recovery for consumers.   As a law firm that prosecutes consumer fraud class actions throughout the country, we’d welcome your input, feedback, comments and experiences if you encounter the imposition of fees or other business practices that offend your consumer’s sense of fair play.   We can be contacted at mdpcelaw.com or by telephone at 914-517-5000.

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