"A number of companies are now offering domain name renewal services in the com.au domain space, which may lead to confusion among consumers," Australian Competition and Consumer Commission (ACCC) Chairman Allan Fels said.
The watchdog says customers must be wary when receiving offers to renew domain name licences from suppliers trying to win new business.
The au Domain administration (auDA) says there has been a steady flow of complaints about consumers being misled.
"The law says if the customer receives an invoice to renew a domain name [from a supplier other than their own], they're only being misled if they actually pay the bill," auDA CEO Chris Disspane said.
The auDA believes large businesses may unintentionally pay for renewal of a domain name licence from a supplier - other than their current one - due to the heavy flow of accounts.
With the increase of competition in this sector, Professor Fels said business and individuals need to understand how the registration system works.
The ACCC warns consumers not to assume that any renewal notice is from the original supplier, also to check credentials of any company claiming to be in association with a registrar, such as the au Domain Administration (auDA).
Finally, "do not pay the provider of the renewal notice unless you wish to deal with that supplier."