ACCC sues domain name registrars for alleged false billing

The competition watchdog alleges that AU$2.3 million has been paid out to two local domain registrars as a result of misleading conduct.

The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings against local domain name registrars Domain Name Corp Pty Ltd and Domain Name Agency Pty Ltd for allegedly engaging in deceptive conduct that led to AU$2.3 million being paid out to them.

Between November 2015 and April 2017, the companies disseminated 300,000 unsolicited notices to businesses that looked similar to a renewal invoice for the business's existing domain name, the competition watchdog has alleged.

Instead, the notices were for the registration of a new domain name at a cost ranging from AU$249 to AU$275.

About AU$2.3 million has been paid out to the companies as a result of these notices, the ACCC has claimed.

"The ACCC alleges that because these notices looked like they were renewal invoices, many businesses paid them thinking they were simply renewing the domain name for their business. The ACCC is alleging that the businesses were instead unwittingly signing up for a new domain name ending in either a or .com suffix that the business might not have needed or wanted," ACCC deputy chair Dr Michael Schaper said in a statement.

"It is alleged that the notices sent out by the Domain Companies offered domain names that looked very similar to the business's current domain name. This detail and the fine print disclaimer were easily missed."

The competition watchdog believes the sole director of both companies was involved in the conduct.

The ACCC is seeking declarations, injunctions, pecuniary penalties, corrective advertising, disqualifying orders against the director, and costs.

The commission received 14,600-plus reports with a combined loss of more than AU$650,000 to false billing scams in 2016, according its Scamwatch website.

Earlier this year, the ACCC reported a four-fold increase in hacking scams, with businesses losing AU$1.7 million to such activity in 2016, more than half of the AU$2.9 million in losses reported nationwide.

Online scams -- those executed via the internet, email, social networks, and mobile apps -- outnumbered phone-based scams in 2016, with an increase of 130 percent over 2015.

Losses to online scams accounted for 58 percent -- AU$48.4 million -- of total losses, while social media was a particularly busy platform used by scammers to lure victims, netting losses of AU$9.5 million in 2016 compared with AU$3.8 million in 2015.