Beware Of Fraud When Buying and Selling Websites On SitePoint

Welcome back! Good to see you. If you haven't seen it, here's the archive of my best writing. Thanks for visiting!

Over the last 18 months I’ve established a “side business” with Nick Schoonens where we buy, “renovate” and sell established websites (or hang on to them for cashflow).   It’s an interesting business model (very lucrative too, if you buy wisely and know how to optimise traffic and conversion).

One of the best places to find established websites for sale is the SitePoint forum.  Sure, there’s a lot of junk there, but once in a while there’s a fantastic deal that’s worth snapping up.  The SitePoint guys have done a great job with their site and they are continuing to take steps to ensure that auctions are legal and above board.

But a few auctions still slip through the cracks – here’s one real example of a fraudster attempting to bilk an unsuspecting site purchaser out of his cash.

The Back Story

Around mid-2008 a business contact sent me an email to say he was excited about the possibility of buying his first site on SitePoint from a certain “Tony Normand” of www.stop-smoking-guru.com.  Before he “pulled the trigger” and shelled out the asking price of $18,000, he asked me to check it out to see if I could spot anything amiss.

When I checked it out, I discovered that the whole thing was a giant scam.

The basic format of these scams is that the fraudster provides info and supporting evidence to corroborate the site’s income and justify the asking price, but when you finally gain access to the site (if you ever do), the actual results fall well short of claimed results.  But by then, you’ve handed over the cash and the seller has skipped town.

The Trail Of Evidence

Below is a partial screenshot of the seller’s ad on SitePoint showing the purported site stats [or click here to open the full ad in a new window]

Sounds great, right?  Who wouldn’t want to buy a $6,000 per month income stream for only $18,000.  That is silly money…a little too silly.  The unusually high return made us very suspicious.

So let’s review the supporting evidence

The seller very kindly supplied a variety of screenshots, corroborating the traffic, income, affiliate activity and mailing list size.  It certainly looks the part:

Claimed traffic volume:

Claimed sales volume:

Claimed mailing list numbers (edited for clarity):

Due diligence reveals tampering with the evidence

Having bought a number of different websites and considered many more, we’ve developed a comprehensive website purchase due diligence checklist to help assess sites.  When I started running the checklist, this public page on www.rentacoder.com turned up:

Hmmm, that certainly looks suspicious.  A person by the name of Anton Cheranev has engaged a contractor to, ahem, “change three marketing images”.   I followed the links (now taken down of course), and found this:

Real mailing list numbers (edited for clarity):

Real sales volume (a similar, yet unrelated image?):

Real traffic volume:

I was not able to follow one of the links to grab the real traffic volume image. But by that point, the game was up… it’s amazing what a little PhotoShop can do.

My friend contacted SitePoint and they shut down the auction, but there’s not a lot more they can do, other than trying to prevent future occurrences.

Be careful when you buy websites – “renovating” existing websites is a great business model if you can make it work, but the biggest “unknown” is corroborating the seller’s claims.  If that problem could be overcome, the Buy-Sell website game would get a lot easier.

Will Swayne

Website Doer-Upper

21 Comments »