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Australia takes action against rogue internet domain providers

Editorial Staff

E-mail inboxes have long been plagued with dubious offers to renew domain names or to buy similar names to prevent cybersquatters taking control of them or even for entries into some kind of directory. It's a nuisance but, so far, the perpetrators of the actions have avoided prosecution by a range of sneaky tactics. Australia's Competition and Consumer Commission (ACCC) has obtained orders (not convictions) against two companies and a disqualification order against their principle officer.

The Australian Federal Court made an order disqualifying Mr Steven Bell (also known as Steven Jon Oehlers) from managing a corporation for five years and ordered him to pay costs to the ACCC, fixed at AUD8,000. The Court also ordered that Domain Corp Pty Ltd and Domain Name Agency Pty Ltd (also trading as Domain Name Register) pay combined penalties of AUD1.95 million.

The process adopted by the ACCC was to apply to the Court for a declaration that the Companies and their officer acted in breach of Australian consumer law. That's the first surprise: the conduct is in the course of business dealings and yet businesses have, in this case, been considered to be "consumers."

The second surprise is that the victims, who already owned one or more domain names, fell for a scam that was so outrageous that one can only assume that they were blinded by the pseudo-official nature of the document and assumed it to be correct.

According to a statement from the ACCC

"From November 2015 to at least April 2017, the two Domain Companies sent out approximately 300,000 unsolicited notices to businesses, which looked like a renewal invoice for the business’s existing domain name. Instead, these notices were for the registration of a new domain name at a cost ranging from AUD249 to AUD275.

"The Court declared that the Domain Companies made false and misleading representations and engaged in misleading and deceptive conduct in sending these notices. Australian businesses and organisations paid approximately AUD2.3 million to the Domain Companies as a result of receiving the notices."

Domain registrations, depending on the part of the name that comes after the dot (e.g. dot com, dot au) cost a fraction of the price the company was charging. A typical dot com address costs around AUD25. However, Australian registration services charge significantly more : we found one charging AUD99 for two years - by way of comparison, we pay GBP12 plus vat per year.

Any business or consumer receiving a renewal notice for a ‘.com’ or '.net.au’ domain name should check that the notice is to renew their proper domain name.

“These sham operations target small businesses, capitalising on a lack of understanding of the domain name system or a busy office environment. We encourage businesses to be vigilant when paying invoices, especially if it is for a domain name registration service,” ACCC Acting Chairman Delia Rickard said.

Or, just don't get suckered in to a scam simply because it's so blatant it doesn't raise suspicion when it should.

The Court made other orders by consent, including injunctions for three years against each of the Domain Companies and for five years against Mr Bell. These injunctions include a requirement that if any of the parties decide to send out further notices, each notice has to prominently include the words, “This notice does not relate to the registration of your current domain name. This is not a bill. You are not required to pay any money”.

That's hardly enough: it's exactly the kind of wording that many of the directory, etc. scammers adopt.

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