Local domain name registrars Domain Corp Pty Ltd and Domain Name Agency Pty Ltd, trading also as Domain Name Register, have been ordered by the Federal Court to cough up AU$1.95 million in penalties for breaching Australian Consumer Law.
A statement from the Australian Competition and Consumer Commission (ACCC) says the two companies issued approximately 300,000 unsolicited notices to businesses seeking re-registration of domain names from November 2015 through to at least April 2017.
The statement explains the notices appeared as a renewal invoice for the business's existing domain name, but instead, they were for the registration of a new domain name at a cost of AU$249-AU$275.
The Australian Federal Court found that the Domain Companies made false and misleading representations and engaged in misleading and deceptive conduct in sending the notices.
According to the ACCC, Australian businesses and organisations paid approximately AU$2.3 million to the Domain Companies as a result.
"The Domain Companies misled businesses into thinking they were renewing payment for the business' existing domain name, when in fact the business was paying for a new domain name," ACCC acting chair Delia Rickard said, recommending also anyone in receipt of a renewal notice for a .com or .net.au domain name check the notice is to renew the correct domain name.
"These sham operations target small businesses, capitalising on a lack of understanding of the domain name system or a busy office environment. We encourage businesses to be vigilant when paying invoices, especially if it is for a domain name registration service."
The court also declared that the sole director of both Domain Companies, Steven Bell, who is also known as Steven Jon Oehlers, was knowingly concerned in, and a party to, the conduct.
It made other orders by consent, including injunctions for three years against each of the Domain Companies, and for five years against Bell.
These injunctions include a requirement that if any of the parties decide to send out further notices, each notice has to prominently include the words, "This notice does not relate to the registration of your current domain name. This is not a bill. You are not required to pay any money", the ACCC explained.
The court also made an order disqualifying Bell from managing a corporation for five years and ordered him to pay AU$8,000 to the ACCC.
PREVIOUS AND RELATED COVERAGE
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.
'Yourname.au' proposed as discussion opens on Australia's domain future
The .au Domain Administration's Policy Review Panel has proposed a series of reforms to the country's domain name registration structure, including the option to register addresses like 'yourname.au'.
ACCC: Australians lost over AU$2.1m to cryptocurrency-related scams in 2017
A report from Australia's consumer watchdog found many locals got caught up in 'pyramid' cryptocurrency schemes last year, hoping to capitalise on the 'success' of bitcoin.
ACCC says multinationals generally easier to deal with than financial services
Facing a House of Representatives committee on Wednesday, the ACCC said it has sufficient access to the management chain in multinationals such as Google and Amazon to help with local regulatory responsibilities.
ACCC issues warning to foreign companies off the back of Valve decision
The Australian watchdog has used the Valve decision to warn online traders operating overseas that they must comply with the Australian Consumer Law when offering goods and services down under.