Thousands of Small Businesses and Nonprofits Billed for Domain Registrations They Didn't Get

A U.S. District Court Judge has ordered a halt to the illegal practices of Canadian operators who deceptively posed as domain name registrars and sent bogus bills to thousands of U.S. small businesses and nonprofit organizations for their annual “WEBSITE ADDRESS LISTING.” Many of the businesses and nonprofits believed they would lose their Web site addresses unless they paid the bill, so they paid. The Federal Trade Commission alleged that in most cases the defendants did not provide domain registration services, did not provide the “search optimization” services it claimed to provide, and bilked small businesses and nonprofits out of millions of dollars.

According to the FTC, since 2004, Toronto-based Internet Listing Service has been sending fake invoices to small businesses and others, listing the existing domain name of the consumer’s Web site or a slight variation on the domain name, such as substituting “.org” for “.com.” The invoice appears to come from the businesses’ existing domain name registrar and contains terms such as “WEBSITE ADDRESS LISTING” and “ANNUAL WEBSITE SEARCH ENGINE LISTING.” The invoice also claims to include a search engine optimization service. Most consumers who receive the “invoices” are led to believe that the defendants are their current domain name registrar and that they must pay them to maintain their registrations of domain names. Other consumers are induced to pay based on defendants’ claims that their “Search Optimization” service will “direct mass traffic” to their sites and that their “proven search engine listing service” will result in “a substantial increase in traffic.”