…and how to avoid them!

I was Skyping with a friend this morning how he had just been scammed out of over $20k (ouch) on Flippa and thought that I would write a post outlining how some of these scams work and how they can be avoided.

I have been scammed a number of times and even when the money is lower and doesn’t hurt so much, inside it hurts like hell so don’t want you to go through the same thing.

In a sec, I will go through a few specifics on some scams that I have come across, but first want to give some general advice.
1. Do your due diligence

That means going through all of the revenue and traffic stats. Watch out for anything that looks suspicious. Although there are circumstances where it is unavoidable, as much as possible make sure that you view the Google Analytics. If possible ask them to add you as a user to their stats so that you can verify.

Also, try and watch them live log in to their stats to make sure that all is legit.

Do remember though, that nothing is conclusive. URLs can easily be spoofed and faked even if you are looking at them live.

How to do due diligence is a post in itself, but there is plenty of info on the internet and on Flippa itself on what is involved.
2. If you are suspicious, then jump ship

Obviously, if something is too good to be true, then generally it is. But sometimes you just get an inkling that something suspicious is up. If that is the case, then just don’t bid. This can be extremely hard and requires self-discipline, but if everyone practiced this, then most of the scams would not work and you can save yourself a lot of money.

One of the things that I follow, not just in buying sites, but generally is that it is a lot better to not buy something and be disappointed than to buy something and be disappointed. There will ALWAYS be new opportunities.
3. If you are purchasing a site that is monetised by AdSense or something similar ask if you can place your AdSense code on their site for a day. If they are reluctant, then ask to do it during the Escrow protection period. If they disagree then it is likely that something is fishy. You can also ask to place your statcounter code in the same way.

Here are some specific examples. Some which I have been a victim of. Some of which I have heard of others being a victim of. And others that have been so clear from looking at the auction.
1. Google Images Scam

Sometimes you see a site that is getting a lot of traffic in a good niche. In reality though, much of the traffic is coming from Google Images which is almost worthless, but certainly less valuable than normal Google search traffic.

One symptom of this, is if they are NOT monetising their site at all but are selling it on the traffic figures rather than revenue.

It is pretty easy to find out if this is this case by doing two things:

a. Check the statistics to see where the traffic is coming from
b. Do a search on the major positions and see if it is likely, that they are getting that much traffic from those keywords. You can use semrush or google keywords tool to try and get an estimate of how much traffic they should be getting.
2. AdSense Ban Scam

When buying a site which doesn’t currently have AdSense on, make sure that you check that that site or owner has not been banned by AdSense if that is the way that you want to monetise it. There are several online tools which claim to do this, but an easier way is to ask them just to place Adsense code on their site. If they don’t want it on their main site, then they can put it on a non-public page. If they refuse outright, then it is likely that something suspicious is up.

Even if you don’t intend to monetise the site with AdSense, then the resale value will be reduced if you ever do intend to sell it on.
3. Clickbank Gravity Scam

Here is one that is pretty hard to detect. Basically, they are selling a Clickbank site and claim to have a high gravity. You can confirm this gravity by CB Engine or a similar site. However, they may be fraudulently increasing their gravity by using their own different accounts and acting as an affiliate.

(NB. Putting it simply – The way that gravity works is how many unique affiliate accounts are used to sell a product)

When you purchase the site, if they don’t continue their own campaigns and you don’t have access to these campaigns then your sales could dramatically reduce or even stop. What you want is multiple affiliates making sales rather than all coming from the same person.

This is very difficult to detect, although there are a couple of ways that you can investigate it:

a. Do a search on google for the product name and also the product hoplink id and see if there are multiple people selling the product.
b. Ask to have a list of the referring ids and check if they are individual people. For example, if they have their own products and have different whois details etc.
4. AdSense Click Fraud

Here is a really horrible one and is becoming a lot more rampant in the last few months. The way that it works is that the owner hires freelancers in a developing country to click on their AdSense ads. Before Google catches up with them, they list the site with a short revenue history. It’s very difficult to know for sure if this is the case, but there are several things you can look for:

a. Look for a constant history. If the revenue and traffic are fairly constant for about a year or longer then this is a good sign.
b. In statcounter, you can see the exit link activity. Look at the IP addresses of the people who are clicking on the links and check that they are also from US/UK etc. as well as developing countries.
c. Look at the times of day when the majority of the clicks are happening. If they are all happening in Indian hours, but it is a site directed towards a US market then it is likely that something fishy is going on.
d. Look at the traffic logs to see where the traffic is coming from.
e. Look for an unrealistic CTR on the AdSense.

The way that this scam works is that once you purchase the site, the clicking stops and your revenue drastically reduces. In addition, Google can catch up with you and ban YOUR account on suspicion of click fraud.
5. Trademark Scam

This is something that I have been a victim of and is hard to investigate. If you purchase a site which has a trademark in the URL or the site goes against the terms and conditions of another site.

An example may be a site which scrapes twitter etc.

At any time, you can be issued with a DMCA or asked to take the site down or even sued. Generally, you will comply and will have lost the site.

In many cases, the previous owner may have already received a notice and is selling it on before proceedings have been taken. You will basically be left with a duck/turkey.

The only real way to avoid this is not to buy sites which are ‘dodgey’. Or in the case of larger sites which are on the grey side of legal, get the seller to sign a contract saying that they have not been issued with warnings.
6. Search Engine Scam

In many cases, sites will only be getting traffic from the search engines because of a few high power links that they have. If those links are removed, then you will lose the SERPS and ultimately traffic. The scam part comes when those links are from the seller who removes or redirects them once you purchase. Watch out for this also if you are buying a site based on its PR (which can be faked) or traffic that is coming directly from just a few sites.

The way to avoid this is to investigate the links and hope that they are from a number of varied domains and IPs and owners.
7. Shiller Scam

This is basically where one user has several accounts or enlists the help of friends to bid an auction up so that the social proof makes you think that it is more valuable than it actually is. You can’t really detect this, but should try as much as possible to know how to value a site for yourself.

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Although there are probably many more, those are the main ones that I come across in the $2k-$30k range where the majority of my purchases are. As I said at the beginning of the post:

1. If it looks too good to be true, it probably is.
2. If you get a bad feeling, don’t bid. There will always be more opportunities.

Very interested if you could leave in the comments any other scams that you have seen or advice for potential buyers (or sellers).

Would appreciate it also if you could ‘like’ and/or forward this post on.

Keeping it real in an unreal world,

Ben Shaffer