Snapnames - the net's largest domain name reseller - has told its customers that for the last four years, one of its own employees used a fake online identity to boost bidding on its online auctions.
"Recently, SnapNames discovered that an employee had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions. This is a clear violation of our internal policy and was not approved by the company. We deeply regret that this conduct has impacted our customers," reads an email sent to customers this week.
"Though on some occasions the employee won the auction, in many instances the bidding caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction."
A company spokesman has told The Reg that the email is genuine. He would not speculate on the employee's motivation, but it acknowledged that the employee was a top executive.
According to the email, the employee's fake bids affected about five per cent of the company's domain name auction since 2005 and this gave the company a one per cent revenue boost. Most of the bidding, the company says, occurred between 2005 and 2007.
The employee in question has now been dismissed. "No matter the level of impact, SnapNames takes this matter extremely seriously. When the matter was discovered, the company immediately closed the account in question and began a thorough investigation," the email continues.
It also says that when the employee actually won auctions via the fake name, he or she arranged a partial refund from the company.
SnapNames says it will offer a rebate to anyone who ended up paying a higher price for a domain due to a bid from the employee's fake identity. This rebate will amount to the difference between the price they paid and what they would have paid had the employee not intervened - plus 5.22 per cent interest. ®