Fake domain name sales curtailed

A federal court in Chicago has shut down a Web site that sold fake domain names, including .brit and .usa, cashing in on recent patriotic fervor.

The U.S. District Court has issued a temporary restraining order in response to a suit brought by the U.S. Federal Trade Commission, in co-operation with its British counterpart, the U.K. Office of Fair Trading. The FTC charges that two British citizens, representing three companies, sent out mass e-mail messages asking people to visit their Web site, dotusa.com, and buy domain names that use the unauthorized extensions.

The domain names are not authorized by the Internet Corporation for Assigned Names and Numbers (ICANN), which registers all domain names. The companies under fire, TLD Networks Ltd., Quantum Management, and TBS Industries Ltd., all of Britain, marketed .brit and .bet domains for some time, according to the FTC. They began promoting the .usa domain after the September 11 attacks. The subject line of the e-mail messages hawking the bogus domains was “Be Patriotic! Register .USA Domains.”

The e-mail messages linked to the dotusa.com Web site, where customers could select from a range of invalid domain names for which they were charged US$59 each.

Several Transgressions

“These spam scammers conned consumers in two ways,” said J. Howard Beales III, director of the FTC’s Bureau of Consumer Protection. “They sent deceptive spam, and they sold worthless Web addresses from their Web sites. By closing down this operation, we’re sending a strong signal: We will not tolerate deceptive spam.”

Although the case is still pending, the court has frozen the American assets of the operation and will preserve the money for consumer redress. The domain names of the defendant’s Web sites have been suspended, so they will not able to run them from abroad.

The FTC says many consumers purchased numerous bogus domain names, and the defendants could have made as much as US$1 million in less than a year.

This is far from the only bogus Internet marketing related to September 11. Shortly after the attacks, officials warned of scam Web sites and fraudulent e-mail campaigns that purported to collect charity funds for victims. A number of virtual tall tales and false stories about the aftermath also travelled online.

ICANN is charged with managing domain name assignments without governmental regulatory authority, through a board that now includes users. Still, confusion over domain name assignment practices remains, and some organizations find ways to side-step ICANN.

For example, last year a company called New.net began marketing several dozen top-level domain names outside ICANN’s procedure. The renegade domains include such enticing domain extensions as .love, .free, .xxx, .game, .school, .scifi, and others.

Because they aren’t official top-level domains, users have to install a software utility that enables a PC to find New.net’s domains on the Internet. New.net is cutting deals with Internet service providers to automatically recognize the company’s renegade top-level domains.