Tuesday, June 14, 2011

The Domain Transfer Scam

If you own a website or pay the bills for someone who does, this one is for you. My office receives a few phone calls every month from clients who receive a deceptive offer from a company called Domain Registry of America (DRA). The official-looking letter warns them of pending expiration of their website domain (the “domain” is the name that follows the “www” in a website). We always inform our clients to tear up the letter with vigor and vehemence. Let’s take a close look at this scam to see how it works:

First, the basics: To create your own website, there are 3 basic steps. 1. Purchase a website domain such as www.YourCompany.com from a reputable domain registrar. 2. Design a website. 3. Publish the website to your domain and make it visible to everyone. 4. Renew your domain periodically.

There are tons of domain registrars out there. GoDaddy.com is probably the most popular but there are certainly many other reputable ones. When you purchase a domain, you must enter your name, address and phone number. Your domain is never yours forever. You can only “rent” it in yearly (or more) increments. As long as you renew on time, your domain will always belong to you. The cost of a domain is generally about $10.00 per year. The expiration dates of domains are also listed in the public record database and this is where the Domain Registry of America derives their scammy powers.

DRA scans that database of website owners and website expiration dates then sends out millions of letters enticing you to renew your domain through them. The official looking letter reads “Domain Expiration Notice! As a courtesy to domain name holders, we are sending you this notification of the domain name registration that is due to expire in the next few months.” It goes on to offer “substantial savings” and gives dire warnings that you may lose access to your website if you don’t renew your website through them immediately.

Back in the early 2000’s they used to send out notices that looked exactly like a bill. It was only by reading the fine print did you learn that by paying the “bill” you were actually authorizing them to transfer your domain to them. Their renewal fees are triple the cost of what you would normally pay. In 2003, The Federal Trade Commission back-handed them pretty hard over this “fake bill” scheme and forced them to give token refunds to victims but that only caused them to change their advertising tactics.

Now, to be 100% fair, this isn’t a 100% scam. It is more like 50% deceptive advertising and 50% scam. That’s still 100% wrong. I give free advice all the time and it is worth every penny so if you’ve been a victim of this or any other scam give me a call and I’ll guide back to a safe harbor.

No comments: