Domain Name Corp Pty Ltd and an associated business, Domain Name Agency Pty Ltd, have been slapped with fines worth $1.5 million and $450,000, respectively, over breaches of the Australian Consumer Law.
The Australian Competition and Consumer Commission last year launched Federal Court action against the businesses, which have the same director, Steve Bell.
The ACCC said that the DNC and DNA issued some 300,000 notices to businesses that were not existing customers that looked like domain renewal notices. In fact, the notices were for the registration of new domains similar to those already owned by businesses.
In totally, the two businesses picked up $2.3 million in fees based on the notices, according to the consumer watchdog.
“The Domain companies misled businesses into thinking they were renewing payment for the business' existing domain name, when in fact the business was paying for a new domain name,” ACCC acting chair Delia Rickard said in a statement.
Fake domain name renewals are categorised by the ACCC as a form of ‘false billing’ scam. In 2017, the ACCC’s Scamwatch received 1323 reports of false billing scams, with total losses reaching almost $1.5 million.
“These sham operations target small businesses, capitalising on a lack of understanding of the domain name system or a busy office environment,” Rickard said.
“We encourage businesses to be vigilant when paying invoices, especially if it is for a domain name registration service.”
Bell was ordered to pay the ACCC’s costs. He was also disqualified from managing corporations for five years. In addition, he was restrained for five years from sending notices to businesses relating to the registration of “substantially similar” domains without including a statement in 16-point type that says: “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”.
The two companies had similar conditions imposed on them for a term of three years.