FTC busts domain name scammers

The Federal Trade Commission said today that it had permanently killed the operations of a group that it said posed as domain name registrars and convinced thousands of US consumers, small businesses and non-profit organizations to pay bogus bills by leading them to believe they would lose their Web site addresses if they didn't.

A federal district court shut down Internet Listing Service, a Toronto-based group the FTC said sent fake invoices to small businesses and others, listing the existing domain name of the consumer's Web site or a slight variation on the domain name, such as substituting ".org" for ".com." The invoices appeared to come from the businesses' existing domain name registrar and instructed them to pay for an annual "WEBSITE ADDRESS LISTING," the FTC stated.

The invoices also claimed to include a search engine optimization service. Most consumers who received the "invoices" were led to believe that they had to pay them to maintain their registrations of domain names. Other consumers were induced to pay based on Internet Listing Service's claims that its "Search Optimization" service would "direct mass traffic" to their sites and that their "proven search engine listing service" would result in "a substantial increase in traffic," the FTC stated.

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The FTC's complaint charged that most consumers who paid the defendants' invoices did not receive any domain name registration services and that the "search optimization" service did not result in increased traffic to the consumers' Web sites.

As with so many of these cases however, the defendants get off paying back very little compared to what they took. With today's settlement order, entered against defendants Isaac Benlolo, Kirk Mulveney, Pearl Keslassy, and 1646153 Ontario Inc., includes a suspended judgment of $4,261,876, the total amount of consumer injury caused by the illegal activities. Based on what the FTC called the inability of the settling defendants to pay, they will turn over $10,000 to satisfy the judgment.

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xhenxhe said:

I LOVE it! I often get letters from Domain Registry of America telling me I need to hurry and renew my domain with them - even though I have never dealt with them. It pisses me off because I know there are some many people out there that would turn their money over to them in fear of losing their little business website.

The article doesn't seem clear on who the company is, but I hope they crack down on the bottom feeders at DROA too!

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