ACCC warns domain name resellers to stay legit

ACCC chairman Professor Allan Fels has delivered a vigorous warning to suppliers of domain name renewal services, cautioning them against misleading or deceiving customers.

Fels's warning follows a recent federal ruling against Melbourne-based Internet Name Group (ING) and its directors Sasha Sudakov and Mark Spektor, which found the group had sent unsolicited invoices to small business throughout Australia seeking payment for domain name services.

The orders, which were made by Justice Ryan, include injunctions restraining ING from engaging in conduct that is misleading or deceptive, or likely to mislead or deceive, in connection with Internet domain names.

Fels says the outcome sends a warning to all businesses which distribute false invoices to potential customers, despite having no previous dealings with the customer.

"These businesses place themselves at risk of being the subject of an ACCC investigation and possible litigation," he said.

The court decision seals a bumpy year for ING. The group lost its provisional registrar accreditation in April following the ACCC's decision to launch proceedings against the group's name renewal practices. In August, ING went into voluntary administration and is now subject to a deed of company arrangement.

The ACCC's proceeding against ING is one of several actions the consumer watchdog has initiated against Internet registration groups in Australia. In September, the ACCC announced it would take legal action against Internet Registrations Australia for allegedly sending out hundreds of domain name renewals to companies that were already registered with another provider.

As well as deceptive conduct, the Federal Court found ING made false representations concerning the price, quality and need for such services in contravention of the Trade Practices Act. The group was also found guilty of accepting payment for services which, when delivered, would be materially different from those promised upon payment.

To illustrate the results of the court action, ING will be required to display an advertisement on its web site, correcting its misrepresentations.

Fels said businesses are still confused about the domain name industry. Overcoming these concerns and gaining consumer confidence in licence registrations and renewal services is critical to the uptake of e-commerce, he said.

"As competition develops in this sector, businesses and individuals need to make sure they understand how the registrations system works," he said.

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Nadia Cameron

Nadia Cameron

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