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July 3, 2002


Preserving a domain

CONCERN has grown in the UK about domain scams - and legitimate practices that could be taking advantage of technical ignorance, especially in smaller enterprises.

Trading standards officers working for the City of York Council in the UK were forced to issue a warning this week that "dubious tactics" were being used to try to sell domain names.

Businesses in the city in northern England were being targeted by companies trying to trick them into paying between £50 and £200 - approximately US$75 and $300 - to secure their names from 'competitors', the Council said.

Council trading standards manager Elizabeth Levett said: 'Local businesses should be wary of unsolicited telephone calls stating that an attempt has been made to register their business name and offering 'first refusal on the name'.

'Any attempts by the recipient of the call to find out the name of the company trying to register the name is refused on the grounds that the Data Protection Act forbids this and potential purchasers are told time is of the essence and urged to make an immediate decision and payment.

'Therefore it is impossible to find out whether or not someone is intending to register a domain name similar to or the same as your own and whether paying the sums asked for will actually secure the name.'

The Council said it had advised businesses in the area to be aware of such high pressure sales tactics and not to part with any money.

The warning came as another "scam" amongst website hosts had become public in the UK.

Growing competition amongst host companies, especially in the US, has significantly undercut the prices being charged by many UK hosts for server space - so increasing numbers of enterprises have been seeking to move their business.

And, in seeking to extend their web presence with more domains, they have discovered how much cheaper some registration services are in the US than in the UK.

Go-Daddy, for example, based in Scottsdale, Arizona, can register a domain name for 10 years for less than US$70 - under £50 at early July exchange rates.

Some UK companies have been charging £50 per single year - plus tax - for exactly the same service.

'Either they have been marking up their prices extortionately, or they are being over-charged for the services they buy in,' one sole trader told As Perceived.

Similarly, small sites can be hosted by US providers for about £10 per month - half, or less, of what could be charged in the UK.

But, making matters worse still, some enterprises have found themselves 'held hostage' by host companies wanting to charge them £100 - or $150 US - plus tax for moving their domains.

One company, Symbiant, based in Leeds, told one customer that they had registered the domain name in advance and would want paying for that.

When challenged, Symbiant pointed to their terms and conditions - which stated that such a fee would be levied for moving a domain; and, the terms added, the transfer would not be made until the money was paid.

While such business terms and conditions have clearly been written by lawyers to try to protect the interests of such companies, many are stacked against their customers.

Indeed, if potential customers read such documents clearly before buying a product or service - especially online - the exclusions would probably stop such companies from getting any business whatsoever.

To some extent, they have their customers "over a barrel"; if the customer wants the service, then the one-sided terms and conditions must be accepted.

In the absence of collective strength from such customers, it is probably only when industry regulators discover what has been happening and decide to take corrective action that any semblance of a balance is achieved between the providers' and customers' interests.

Such providers have, of course, clearly forgotten that their short-term profitability frequently is achieved at the detriment of their customers' longer-term interests; UK hosts have recently been learning that lesson.

Until such providers decide that their interests are better served over longer periods of time or the regulators have intervened, customers and potential customers have no choice but to be careful - of both rogue domain sellers and legitimate registration services and hosts.

Learning the technicalities quickly and reading the terms and conditions carefully seem the most positive protection.

LINKS
Go Daddy: Domain registrations and web hosting in the US
Symbiant: Domain registration and web hosting in the UK