Court stamps out Australian Net registration scam - News - Business

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This story was printed from ZDNet Australia.
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Court stamps out Australian Net registration scam

By Rachel Lebihan, ZDNet Australia
March 08, 2002
URL: http://www.zdnet.com.au/news/business/soa/Court-stamps-out-Australian-Net-registration-scam/0,139023166,120263926,00.htm

A company that misled small businesses into believing it dealt with Internet domain name registrations will be forced to cough up customer refunds, retract false information and contribute to legal fees, following action in Federal Court, Brisbane.

The Australian Competition and Consumer Commission (ACCC) lodged allegations in court that a company calling itself ComAURegister misled businesses by fax, between January and March last year, by saying it offered domain name registration services when it didn't. During the same period, the Commission alleged the company had deceived businesses by saying they had to obtain its services to maintain their Internet domain names, and falsely claimed to have an affiliation with the bodies responsible for the registration of domain names.

ComAuRegister also claimed to have had prior dealings with organisations when they had not occurred, the ACCC's Lyn Enright told ZDNet Australia.

Informed of the scam by a number of disgruntled customers, the ACCC took the matter to Federal Court where the company was being found to have breached the Trade Practices Act.

"The outcome is a significant result for small businesses who are entitled to have confidence in domain licence registration and renewal services in the development of their e-commerce", ACCC chairman, Professor Allan Fels, said in a statement.

"Suppliers of domain name renewal services and businesses who imply that they are able to supply this service are warned not to mislead customers as to their need to renew their domain name licence with a particular supplier or the services the supplier provides, as such conduct puts the supplier at risk of breaching the fair trading provisions of the Act," he added.

Fels also said the outcome of the court proceedings against Com.Au Register sent a strong message to the shonky business practice of sending false invoices to potential customers when no previous dealings with the customer have been made.

The ACCC also alleged that some representations on the company's Web site were likely to mislead businesses.

Court orders require the proprietor of the company to send out corrective faxes, display a corrective notice on the company Web site, implement a trade practices compliance program and contribute to the ACCC's legal costs - a figure that has yet to be determined. He must also refrain from making the same misrepresentations again and the ACCC is following up refunds that have not already been made

A notice on the company Web site says the site is temporarily closed and attempts to contact the company by phone were unsuccessful.