News - 23 April 2007 (ZDNet Australia)



Aussies lose domains in Web host scandal

An unknown number of Australian companies and consumers have lost their Web sites -- and renewal fees -- hosted by a US-based company.

Web sites hosted by US-based Web host RegisterFly have been disappearing in dribs and drabs over the past year. The domains are "parked" -- generally when they have expired, but attempts to renew the domain by paying the fee mysteriously fail.

Justin Kulhawick is a former RegisterFly customer who has fielded an estimated 10,000 unique complaints about the company through www.RegisterFlies.com, since he set up the site a year ago.

"I get e-mails every day from people begging me to help them," he told ZDNet Australia. RegisterFly has a million customers -- hosting two million domain names and 300,000 Web sites -- in 120 countries.

Kulhawick alleges that other Web hosts are doing the same thing: parking domains and creaming off the renewal fees. He said some are apparently also reselling the domain names to others to test -- falsely creating customer "churn" to make more money.

"I can tell you it's a tightly-knit group that has seen the dollar signs," he said. "If a domain name gets 10 hits a day, they can manage the traffic and do a click every couple of days, at US$6/month, and it's on the high end of Google ... two, three, five clicks and you've got a million."

Add all the customers and domains up, Kulhawick said, and many millions of dollars could easily be made.

"That's a scandal. That's the size of [notorious white collar fraud case] Enron."

E Clarke Dummit is a US attorney spearheading a class action lawsuit in the US Federal Court against RegisterFly, its CEO Kevin Medina, another director John Naruszewicz and sister companies Unifiednames and Hosting Services Group as well as fellow registrar eNom and ICANN (Internet Corporation for Assigned Names and Numbers).

Dummit said at least five or six Australian companies or consumers have signed up to join the lawsuit -- and more from all over the globe are joining daily.

Dummit said 75,000 customers had already lost their domains, and funds ranging from US$10 to US$100,000. But some losses were unquantifiable, because . . .

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