GoDaddy buying domains when they expire to extort their own users
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That said, you did let your domain expire. This is really tough to do unless you're not getting admin reminders (I think you get 3 before it expires?). If your domain is important or valauble why would you save a piddly few bucks and wait until it's near expiry? Buy multiple years or auto renew. This is not a "brilliant new scam"; registrars and 3rd parties have been doing it since we all used verisign.
Also, how do you know it was purchased by GoDaddy? How can you tell the differnce between someone else registering and parking it with them?
They also let you remove your domains long before they expire. I once tried it, it gets automatically "catched" and offered for an eye-watering amount. Godaddy have nothing to lose, ICANN charges them only 18 cents per domain, why not cybersquat.
If the new owner is GoDaddy itself and they haven't completed the necessary accounting gymnastics to make this legal, then their statement may likely constitute fraud. IANAL & TINLA.
In other words, be careful which tool you use to search for the availability of domains.
I’d no sooner recommend new business use GoDaddy than Wells Fargo.
I remember having a domain my parents' had registered for their business. My parents forgot to pay the bill on it one year, and the registrar (don't remember which) bought it up, and wanted some huge "fee" in the hundreds of dollar range before giving it back.
It's akin to the overdraft fees banks charge: charging ridiculous prices for a "service" the customer didn't even ask for.
Does this cost them money to do? Or do they get to buy domains at near zero cost by virtue of being a registrar?
I wonder if it's possible to penalize them for this behavior with bots to perform searches of useless word permutations and adding them to the cart at scale. It would probably be too easy to identify and filter the traffic, but just musing out loud.