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Domain Registry of America (DroA) Scam
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Domain Registry of America (DRoA) Scam

DROA serves as a reseller of domain name registration services for eNom, Inc. (“eNom”), an ICANN-accredited registrar of second level domain names. DROA’s domain name registration services enable its customers to establish their identities on the web.

In the course of offering domain name services, DROA has engaged in a direct mail marketing campaign aimed at soliciting consumers in the United States to transfer their domain name registrations from their current registrar to eNom through DROA.

 In many instances, consumers do not realize that by returning the invoices along with payment to “renew” their domain name registrations they are, in fact, transferring their domain name registrations from their then-current registrars to eNom. DROA’s renewal notices/invoices do not clearly and conspicuously inform consumers of this material fact. 16. Defendant’s renewal notices/invoices also fail to inform consumers that DROA charges a processing fee of $4.50 for any transfers of domain name registrations that are not completed, even if through no fault of the consumers. 17. In many instances, DROA promises credits to consumers who request them, but fails to transmit the credits to the consumers’ credit card accounts in a timely manner.

Despite the FTC ruling again DRoA (located online at: http://www.ftc.gov/os/2003/12/031219stipdomainreg.pdf) IT IS HEREBY ORDERED that, in connection with the advertising, marketing, promotion, offering for sale, selling, distribution, or provision of any domain name services, Defendant, its successors, assigns, officers, agents, servants, and employees, and those persons in active concert or participation with it who receive actual notice of this Order by personal service or otherwise are hereby permanently restrained and enjoined from making or from assisting in the making of, expressly or by implication, orally or in writing, any false or misleading statement or representation of material fact, including but not limited to any representation that the transfer of a domain name registration is a renewal. II. IT IS FURTHER ORDERED that, in any written or oral communication where Defendant makes any representation that a domain name service is expiring or requires renewal, Defendant, its successors, assigns, officers, agents, servants, and employees, and those persons in active concert or participation with it who receive actual notice of this Order by personal service or otherwise are hereby permanently restrained and enjoined from failing to disclose, in a clear and conspicuous manner, in advance of receipt of any payment for services: A. Any cancellation or processing fees imposed prior to the effective date of any transfer or renewal; and B. Any limitations or restrictions on cancelling a request for domain name services.

Despite their order from the FTC to stop sending mailings that trick people into thinking they have received a bill, we received this junk mail in July of 2004. Want to see what the envelope looks like so that in case you get one in the mail you know what to throw away? Click here.

The prices for domain registration via DROA are 10 times as high as other legitimate domain registration sites like godaddy.com.

FTC takes on Domain Registry of America

December 22nd, 2003
By FTC Press Release

Court Bars Canadian Company from Misleading Consumers in Marketing of Internet Domain Name Services

Stipulated Order Requires Payment of Consumer Redress, Prohibits Future Deceptive Conduct

The Federal Trade Commission has requested that a federal district court enjoin Domain Registry of America, Inc., an Internet domain name re-seller, from making misrepresentations in the marketing of its domain name registration services and require it to pay redress to consumers. According to the FTC, the company told consumers that their domain registrations were expiring, leading many consumers unwittingly to switch their domain name registrar. The company also allegedly did not disclose that it would charge a processing fee to consumers if their transfer request was not competed – for any reason – and failed to provide consumers refunds in a timely manner. Under the terms of the stipulated final order announced today, Domain Registry of America (DROA), based in Ontario, Canada, may be required to provide redress to up to 50,000 consumers, is prohibited from engaging in similar conduct in the future, and is subject to stringent monitoring by the Commission to ensure its compliance with the court order.
 

DROA's Business Practices
 

DROA is a re-seller of domain name registration services for a company called eNom, Inc. (eNom), an accredited registrar of Internet domain names. It allegedly conducts business by sending mass-marketed direct mail to U.S. consumers, soliciting them to transfer their domain name registrations from their current Internet domain name registrar to eNom. According to the FTC, DROA's mail solicitations to consumers appear to be renewal notices or invoices from the consumers' current registrars, advising them that their domain names are about to expire, and requesting payment for "renewal" of the domain name registration. The Commission contends that DROA has mailed millions of such "renewal" notices captioned "IMPORTANT NOTICE," to urge consumers to act quickly to avoid "Register Lock" or "loss of your online identity." The company further warns, according to the FTC, that if consumers "lose their domain namem" it may be "impossible for you to get it back."

The Commission's Complaint

According to the Commission's complaint, in marketing its domain name registration services, DROA has violated the FTC Act in several ways. First, it allegedly uses notices/invoices that mislead consumers into thinking that they are renewing their registrations with their current registrar when, instead, they are transferring their registrations to DROA's registrar, eNom. DROA also allegedly fails to disclose to consumers that it charges a $4.50 processing fee for any transfer requests that are not completed, even when the failure occurs without any fault of the consumers. The FTC also contends that DROA fails to issue promised refunds in a timely manner, in violation of the Truth in Lending Act (TILA), sometimes delaying refunds for months.

Terms of the Stipulated Order
 

The stipulated final order announced today addresses DROA's allegedly illegal conduct, requires the payment of consumer redress, and ensures that the Commission can monitor its future conduct. First, the order bars DROA from making false or misleading representations in connection with the advertising, marketing, and promotion of domain name services. It also bars DROA from failing to disclose, clearly and conspicuously, any cancellation or processing fees, and any limitations or restrictions on cancelling domain name services. Finally, the order requires DROA to comply fully with the TILA when selling its services to consumers.

In addition, the stipulated order calls for monetary redress to reimburse consumers that DROA misled. It requires DROA to provide two forms of redress to consumers. DROA first must provide a full refund, including any administrative or cancellation fees, to any consumer who cancelled a transfer request during which a transfer was pending. Second, DROA must give current customers who were acquired from other domain name registrars and who have not yet renewed their registrations the opportunity to transfer their registration away from DROA, and must pay $6 to each customer to defray the costs of this transfer. It is anticipated that approximately 50,000 DROA customers will have the opportunity to transfer to another registrar under this provision.

Finally, the stipulated order contains terms requiring DROA to: 1) maintain its business records for four years; 2) provide notice of changes to business addresses and employment status; 3) permit the monitoring of its business practices to ensure its compliance with the order, including allowing access to is premises; and 4) distribute the order to its management and sales personnel. The Commission vote to approve the order was 5-0. It was filed in the U.S. District Court for the Southern District of New York on December 19, 2003, and requires the signature of the judge.

NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated judgments have the force of law when signed by the judge.

Copies of the Commission's complaint and stipulated final judgment are available from the FTC's Web site at www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
 

More hidden subtext about DRoA

If you like being unprotected and paying 10 times or more as much for domain registration as other services like godaddy.com (I'm not an affiliate, just a fan), this is the company for you.

Take a look at this scary fine print from their site:

"Fees. All fees charged by a Provider in connection with any dispute before an Administrative Panel pursuant to this Policy shall be paid by the complainant, except in cases where you elect to expand the Administrative Panel from one to three panelists as provided in Paragraph 5(b)(iv) of the Rules of Procedure, in which case all fees will be split evenly by you and the complainant." (https://www.droa.com/udrp.asp).

If that didn't scare you...read more from the same page:

"Transfers During a Dispute.

a. Transfers of a Domain Name to a New Holder. You may not transfer your domain name registration to another holder (i) during a pending administrative proceeding brought pursuant to Paragraph 4 or for a period of fifteen (15) business days (as observed in the location of our principal place of business) after such proceeding is concluded; or (ii) during a pending court proceeding or arbitration commenced regarding your domain name unless the party to whom the domain name registration is being transferred agrees, in writing, to be bound by the decision of the court or arbitrator. We reserve the right to cancel any transfer of a domain name registration to another holder that is made in violation of this subparagraph.

b. Changing Registrars. You may not transfer your domain name registration to another registrar during a pending administrative proceeding brought pursuant to Paragraph 4 or for a period of fifteen (15) business days (as observed in the location of our principal place of business) after such proceeding is concluded. You may transfer administration of your domain name registration to another registrar during a pending court action or arbitration, provided that the domain name you have registered with us shall continue to be subject to the proceedings commenced against you in accordance with the terms of this Policy. In the event that you transfer a domain name registration to us during the pendency of a court action or arbitration, such dispute shall remain subject to the domain name dispute policy of the registrar from which the domain name registration was transferred."

 


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