A Canadian Internet domain name re-seller stands to be barred by a federal court from misrepresenting its domain-name registration service marketing and ordered to pay consumer redress, the Federal Trade Commission announced December 23. The stipulated order awaits only a judge's signature to take full effect.
Domain Registry of America, Inc., which resold domain names for a company called eNom, Inc., "told consumers that their domain registrations were expiring, leading many consumers unwittingly to switch their domain name registrar," the FTC said. DROA was also accused of failing to reveal they'd charge processing fees if consumer transfer requests weren't finished, and of failing to provide timely refunds.
Based in Ontario, DROA was also placed under strict FTC monitoring to guarantee compliance with the court order, the commission added, and the company could be required to provide redress for as many as 50,000 consumers as a result of the ruling.
The FTC claimed DROA's direct mail solicitations resembled notices or invoices from consumers' incumbent domain registrars, advising their domain names were about to expire and asking for payment to renew the domain registrations. The mailings were said to be captioned "Important Notice," urging the recipients to act to avoid "Register Lock" or "loss of your online identity," the FTC said, with the company warning also that consumers who lost their domain names might find it "impossible" to retrieve them.
But the FTC said that approach was a disguise to keep consumers from realizing they were actually transferring their domain registrations to eNom. It also didn't bother telling the consumers that they'd be charged a $4.50 processing fee for "any transfer requests that are not completed, even when the failure occurs without any fault of the consumers," the commission added.
The court order requires DROA to keep business records for four years, give notice of any changes in business addresses and employment status, allow FTC monitoring of its business practices, and distribute the court order to all management and sales personnel, the FTC.
