Don't fall foul of domain name scams
Businesses are being warned to be on the lookout for companies using high-pressure sales tactics to dupe them into buying extra domain names at premium-rate prices.
Complaints about the techniques adopted by some domain name sellers have rocketed, prompting the Office of Fair Trading (OFT) to consider launching investigations to crack down on such practices.
One of the latest targets was the Guy's and St Thomas' Hospital Charitable Trust. It was pressurised to buy multiple versions of its online name, but was suspicious and refused to pay up.
Carmarthen-based domain name reseller Domain Registrar Services (DRS), already the subject of numerous complaints, told the Trust that a "mystery buyer" was trying to register the names to use for improper material.
Susan Pollock, the Trust's web manager, told vnunet.com that three salespeople tried to push her into buying nine domain names relating to the hospital at a total cost of £1,400.
"They implied that these were porn sites and to stop this happening I would have to register the names," she said.
"Also, they said I could only register the domain names through them. This rang alarm bells as I knew it was a lie, so I checked with a colleague and Internetters, the domain registrar that hosts our website."
Pollock contacted Carmarthenshire Trading Standards, which confirmed that it had received other complaints about DRS.
"When a DRS salesman called back I told him I knew what they were up to and had contacted Trading Standards. He just laughed and said that Trading Standards were 'well aware' of them," said Pollock.
DRS spokesman David Hayes defended the company's methods, claiming that mystery buyers did attempt to buy domain names.
"We don't pressurise," he claimed. "All we try and do is advise people what can happen to these domain names. Maybe the people you have talked to have got their wires crossed."
However, when pressed, he was unable to provide any evidence of the 'mystery shoppers'.
Pollock remains unconvinced. "I don't mind people trying to sell me something, I just don't like the tactics used," she explained. "I was being pressurised. I must have received 10 phone calls from them in 24 hours. And I don't like being lied to."
Ken Sorrie, director and co-founder of Internetters, a registrar accredited by the Internet Corporation for Assigned Names and Numbers, warned: "Companies should be on their guard for unsolicited telephone calls from domain name resellers claiming that 'mystery persons' are about to register variants of their name.
"Invariably there is no mystery person. Instead this is often a ruse to register domain names at inflated prices."
DRS quoted Guy's and St Thomas' a price of £1,400 for nine names, about £155 each. The average price for a domain name is around £30, or £1,130 less than the total price quoted by DRS, a considerable difference for an NHS trust working on a limited budget.
"This makes me so angry. We're a charitable trust, with small budgets, and we can't go around throwing money away," said Pollock.
Two weeks ago, vnunet.com forwarded over 70 complaints to the OFT, almost all against DRS and a Maidstone-based reseller called Anet.
An OFT spokeswoman confirmed that Anet's practices are now being investigated. "We are further down the line with Anet," she said. "We are aware of DRS and are liasing with Carmarthenshire Trading Standards, but have not launched an official investigation."
Currently, no organisation is responsible for policing the sale of domain names, much to the frustration of those who believe that they have been conned into buying names. And with barriers to entry so low, it is easy for anyone to set up and register domain names.
The Department of Trade and Industry (DTI) suggested that this is an issue for domain name registry Nominet.
"In the first instance it will be Trading Standards and the OFT to deal with bogus resellers. Specifically, though, it is an issue for Nominet to take forward and we can't comment on its position," the DTI said.
But Nominet has little power to arrest the problem, despite such sales techniques being frowned upon by its legitimate members. It has no legislative power and does little to stop its members from using such tactics.
In February Nominet issued a press release warning companies to be on the lookout for high-pressure sales techniques. Yet, when asked, it admitted that no member had ever been banned for using them.
Sorrie warned: "People should not imagine that the 'Member of Nominet' logo means that the member has been thoroughly checked out. It merely means that they have paid the joining fee and the annual membership.
"Companies think there is a body protecting them from unscrupulous sales tactics by domain name resellers. Sadly this is untrue, and dubious selling methods abound seemingly unchecked."
Jennie-Marie Idler, of domain registrar NeuStar, suggested that mis-selling is a huge problem. "I don't envy Nominet's position," she said. "However, mis-selling can be proven and the government should examine these scams and make an example of these companies."
Until an organisation is prepared to take responsibility, the problem will not go away. Although legislation seems a complicated route to take, an ABTA-style arbitrator would be a step in the right direction.
Companies would learn not to buy from resellers without the stamp of approval, and it would give those unhappy with the service a route to complain.
"The marketplace is lacking an effective code of practice to regulate the selling tactics of domain registration companies," said Sorrie. "It needs to be a code with teeth that expels members which adopt dubious selling techniques."
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