The Australian competition watchdog is taking action against local domain name registrars, Domain Name Corp Pty Ltd and Domain Name Agency Pty Ltd, alleging the companies engaged in misleading or deceptive conduct.
Specifically, the Australian Competition and Consumer Commission (ACCC), alleges that the companies, which have also traded as Domain Name Register or the Domain companies, made false or misleading representations to Australian businesses about the domain name services they offered.
The ACCC also alleges that the sole director of both the domain name companies was involved in the conduct.
According to the competition watchdog, from November 2015 to at least April this year, the domain companies sent out around 300,000 unsolicited notices to businesses, which the ACCC alleges 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 $249 to $275, the ACCC said.
It should be noted that the ACCC considers unsolicited domain name registration offers a type of false billing scam.
“The ACCC alleges that because these notices looked like they were renewal invoices, many businesses paid them thinking they were simply renewing the domain name for their business,” ACCC deputy chair, Dr Michael Schaper, said. “The ACCC is alleging that the businesses were instead unwittingly signing up for a new domain name ending in either a .net.au or .com suffix that the business might not have needed or wanted.
“It is alleged that the notices sent out by the Domain Companies offered domain names that looked very similar to the business’s current domain name. This detail and the fine print disclaimer were easily missed.
“The ACCC believes that Australian businesses and organisations paid approximately $2.3 million to the Domain Companies as a result of receiving the notices,” he said.
The ACCC is now taking action, seeking declarations, injunctions, pecuniary penalties, corrective advertising, costs and disqualifying orders against the director and costs against the companies.
In 2016, the ACCC received over 100 complaints from small businesses that received similar letters and paid not realising what they have paid for. Some mistakenly thought they were renewing their current domain name and risked missing the genuine renewal notice.