Following the incident where a SnapNames executive had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions, the company has announced they have updated the proposed rebate offer.
In the announcement below, SnapNames announced they have revised the agreement regarding the rebate to customers. In this revised copy it is stated that the agreement addresses only the SnapNames auctions in which there was bidding activity from the user name “halvarez”, the bidding name of the executive involved.
There has also been a revision of the payment to people affected by the auctions in which halvarez participated.
To read the statement from SnapNames, see below.
Update to Rebate Offer Acceptance Agreement
On November 6, 2009, SnapNames (via Rust Consulting) communicated an offer to provide a rebate to customers with accounts impacted by inappropriate bidding activity from one of its former employees.
Included with that communication was a Rebate Offer Acceptance Agreement for customers to complete and return to Rust Consulting, the third-party administrator managing the rebate offer.
Several SnapNames customers expressed concerns about the agreement’s language. After considering these comments, we concluded that a section of the original agreement, addressing the scope of release of potential claims, could be interpreted as too broad and not what the company intended, and therefore should be clarified.
Accordingly, the revised copy states precisely that the agreement addresses only the SnapNames auctions in which there was bidding activity from the user name “halvarez.” Please see the marked relevant paragraph below.
Customers who have already communicated their acceptance of the rebate do not need to take further action at this point—their rebates are already being processed for payment. However, if they prefer the revised language, they can print, sign and return the updated document. In that event, we will destroy the original acceptance agreement.
Calculation of rebate amounts
As discussed in the November 6 communication from Rust Consulting, to determine the rebate offer amount, SnapNames hired an independent, third-party forensic accounting firm to perform a thorough review of these auctions and calculate the rebate.
The firm reviewed data regarding all of the bidders in an affected auction, including the bids each bidder placed in the auction and the maximum bids the bidders indicated they were willing to place in the auction; from this data, it was determined what the winning bid would have been had halvarez never placed a bid in the auction. This amount was then subtracted from the actual price paid for the domain name to determine the amount of the rebate for that auction.
Upon further review of this data, SnapNames has learned that for a small number of accounts (less than 5% of the auctions impacted by halvarez), calculations failed to account for changes in our bidding system over time. In those cases, there will be a resulting upward adjustment of between $1 and $5 per auction. Affected customers do not need to take any action—they automatically will be paid the higher amount. If a payment has already been processed, the customer will be issued an additional check for the difference (or credit will be added to the customer’s SnapNames account, according to the customer’s decision).
Bidders and domain names in auctions won by halvarez
Customers and selected bloggers have asked SnapNames to offer compensation to bidders who competed in auctions won by the halvarez user name.
Regrettably, SnapNames does not own these names and cannot unwind the sale of these names or otherwise offer them up for auction again. SnapNames is not offering any rebate or other compensation to bidders who lost names to halvarez.
Although it cannot discuss the details of any ongoing legal issues, SnapNames intends to pursue the legal remedies it may have with respect to this matter.
Additional options for sending your rebate acceptance
As detailed previously, customers electing to accept the rebate offer can execute and return the Rebate Offer Acceptance Agreement to:
SnapNames Rebate Administrator
P.O. Box 98
Minneapolis, MN 55440-0098
We have made additional options available for returning the agreement. Customers may:
- Fax your executed offer to (503) 200-1232
- E-mail a scanned copy of the executed offer to email@example.com