“BUSINESSES AND WEBSITE OWNERS BEWARE” ( POSTED JANUARY 2005)

An elaborate and sophisticated scam has developed regarding the registration of domain names. This happened recently to a client of our firm and we were able to expose it and stop it. The fraudsters are very, very convincing and even have websites with codes of good practice and conduct. It all seems very genuine, but once you start digging deeper it becomes clear that it is an elaborate scam designed to extort money from unsuspecting victims.

The following article was obtained from the website of The Office of Fair Trading, which is an independent and professional organisation based in the United Kingdom:

Misleading domain name claims stopped
OFT takes High Court action

1/05 5 January 2005

A Swansea-based businessman has stopped making misleading statements about internet domain name registrations following OFT court action.

The OFT contended that Adam Ripley was behind a number of domain name registration businesses - Solus Online Ltd, ISIS Online Ltd, Select Registrations and European Domain Bureau. The OFT received numerous complaints from businesses who had been contacted and informed that a third party was interested in registering a domain name similar to their own business name. The businesses were offered the opportunity to register the name but were told they only had a short period of time - usually a matter of minutes – in which to accept the offer or the domain name would be registered by the third party. The OFT did not believe that such third parties existed and Mr Ripley was unable to provide evidence to support the claims. In addition businesses were offered a 10-year registration for co.uk domain names when, in reality, only two-year periods are available.

The OFT took court action after Mr Ripley failed to provide undertakings that he would refrain from using the above sales tactics. Following an application for an interim injunction, Mr Ripley has now provided interim undertakings to the High Court that he will cease those practices which the OFT consider to be misleading. If Mr Ripley continues to contest the case, a full trial will take place to seek a court order against Mr Ripley.

The OFT has worked closely with both Swansea and Flintshire Trading Standards in taking action.

John Vickers, OFT Chairman, said:

'Businesses should be wary about cold-callers putting pressure on them to purchase domain names in haste. Claims that third parties are interested in names must be substantiated and we will take action where such claims are misleading.'

NOTES

1. Adam Ripley gave undertakings to the High Court on 14 December 2004. Such undertakings are solemn promises to the Court which can be enforced by contempt of Court proceedings. This is a temporary measure until the OFT's application for a final injunction is determined.

2. The Control of Misleading Advertisements Regulations (CMARs) 1988 came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The role of the OFT under the regualtions is mainly to support and reinforce the controls exercised by other bodies where they have been unable to take effective action. The OFT will step in only when these bodies have been unable to deal adequately with a complaint and where it is in the public interest that an advertisement is stopped by means of a court injunction.

The OFT can only act when a complaint has been received. To come within its scope an advertisement must be misleading (i.e. it must deceive or be likely to deceive the recipient and affect their economic behaviour, or for those reasons harm the interests of a competitor), and be published, in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

'Advertisement' means any from of representations that is made in connetion with a trade, business, craft or profession in order to promote the supply or transfer of goods or services, immovable property, right or obligations.

3. Businesses that have doubts about the reliability of a domain name offer should contact their usual service provider or domain name registration agent, who can advise on the most sensible course of action.

4. The OFT issued an alert in April 2004 about the sales tactics of some internet domain name registration agents. See OFT consumer alert - Domain names: don't be hustled

5. The OFT previously took action against another domain name registration agent, Internet Registrations Bureau Limited and its officers. Undertakings were given under the CMARs. See press release 155/03