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Court bars Canadian domain slammer

50,000 misled consumers can get their money back

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Application security programs and practises

On December 23, The Federal Trade Commission (FTC) requested that a federal district court instruct an Internet domain name reseller from making misrepresentations in the marketing of its domain name registration services. Domain Registry of America (DROA) told consumers that their domain registrations were expiring, leading many consumers to switch their domain name registrar.

DROA mailed millions of such renewal notices captioned 'IMPORTANT NOTICE' to urge consumers to act quickly to avoid 'Register Lock' or 'Loss of your online identity.' The company also warned, according to the FTC, that if consumers 'lose their domain name' it may be 'impossible for you to get it back.'

The company also allegedly did not disclose that it would charge a processing fee to consumers if their transfer request was not completed and failed to provide consumers refunds in a timely manner.

Domain Registry of America, based in Ontario, Canada, is prohibited from engaging in similar conduct in the future, and is subject to stringent monitoring by the FTC. The company also has to provide a full refund, including any administrative or cancellation fees, to approximately 50,000 consumers who cancelled a transfer request.

DROA is a reseller of domain name registration services for a company called eNom, Inc. (eNom), an accredited registrar of internet domain names, but its doubtful practices were known for a while. In 2002 domain name registrar Register.com (no relation) won a preliminary injunction against its Canadian competitor for alleged 'domain name slamming'. Last year, Dutch hosting provider Deinternetman pondered legal action against Domain Registry of Europe for sending their customers letters urging them to renew their domain contracts.

Earlier, the UK Advertising Watchdog Authority (ASA) slammed Domain Registry of Europe over similar mail shots. DRoE, however, maintained that the notices were "not a bill, rather an easy means of payment should you decide to register or renew your domain(s) with us".

In related news, the FTC yesterday fined Fax.com almost $5.4 million for sending unsolicited advertisements via fax machines, the biggest penalty ever imposed for such a violation. The FTC says that on 489 separate occasions the California-based company, which faxes messages for clients for a fee, violated the law and regulations which forbid companies from sending junk faxes. ®

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