Domain Registry Firm Settles FTC Charges

A Canadian company will pay redress and alter its marketing practices to settle a Federal Trade Commission complaint that it misled consumers.

Domain Registry of America (DROA), which resells services for eNom Inc., could end up reimbursing 50,000 people, according to the FTC. It also has to submit to monitoring.

The order, which must be approved by the U.S. District of New York, does not include an admission of wrongdoing.

According to the FTC, the Ontario-based firm sent direct mail pieces that appeared to be renewal notices or solicitations. These conned consumers into thinking that they were renewing their registrations when instead they were transferring their registration to DROA's registrar, eNom, the FTC alleged.

In addition, the pieces were captioned “Important Notice,” and indicated that when a consumer loses a domain name, it may be impossible to get it back. DROA also failed to disclose a $4.50 processing fee for incomplete transfer requests even when they were no fault of the consumer's, the FTC continued. And the company failed to issue refunds in a timely manner, in violation of the Truth in Lending Act, the FTC charged.

The company mails millions of pieces a year, according to the FTC.

The order also requires that DROA disclose any cancellation or processing fees, and limitations on canceling domain name services. It also must provide a full refund, including any administrative or cancellation fees, for any consumer who requests it. And DROA has to give customers who were acquired from other domain name registries the chance to transfer away from DROA, and pay each of these customers $6 to cover the cost of the transfer.

In a separate development, the FTC has been granted a temporary restraining order against three individuals and two businesses based in Florida, claiming that they overstated the likely results of the work-at-home opportunities they were selling via direct mail.

The defendants, including Ray A. Thompson, Judith Livingston and Jason Lunan, sold “business opportunities” in which participants were to sell booklets on making money from home, or recruit additional consumers to sell the booklets, the complaint continued. The FTC received a temporary restraining order against the defendants in December.

According to the FTC, consumers were promised $10 for each catalog they mailed, and told they would be paid before they were required to mail any of the pieces. However, many customers did not make a substantial amount of money and did not receive payment from the defendants.