One area of e-business that has always caught the attention of crooks and dodgy dealers is that of domain names. It started with cybersquatting in the heady days of the dotcom boom, when companies rushing to get online found their web address had already been registered by internet-savvy opportunists offering it back to them for extortionate sums.
Legal precedents in favour of trademark holders and improved dispute resolution procedures have all but killed off that level of extortion, but there is still easy money to be made by resellers and con artists capitalising on the confusion around domain names, according to Antony Gold, head of intellectual property at law firm Eversheds. ‘There is still a mass warehousing of domain names. A firm in Hong Kong had 15,000. They wait for domain names to lapse and bag them using sophisticated scanning tools,’ he explains.
PricewaterhouseCoopers found this out to its expense last year when Hong Kong-based Ultimate Search registered www.pwc.com after it expired. PwC failed in its initial legal efforts to prove that Ultimate Search had registered the domain in bad faith, but has since managed to buy back the address.
The ‘mystery shopper’ is another tactic used to pressure businesses into buying domain names where an organisation receives a cold call from a reseller claiming that someone is trying to buy that firm’s domain name.The thoughtful reseller then offers first refusal to the firm to secure the domain – for a fee, of course. Gullible businesses have ended up paying hundreds of pounds for a name that is easily available for a fraction of that price.
Fred Bamber, an internet marketing and search engine optimisation adviser for the government’s UK Online for Business service, says he gets many queries from people confused about who to buy domain names from and how to choose them.
‘If you are looking for a domain name, do not accept anyone ringing you. The system is so simple by going through sites registered with Nominet,’ he says.
Paul Booth, technical manager of the IT faculty at the ICAEW, deals with technology enquiries from members and advises the use of ‘straightforward commonsense’. ‘Be sure that when you are asked to hand over money for domain name registrations that you know precisely what you are getting, and that the entity offering it to you has the power to fulfil its side of the deal.’
There have also been a spate of scams where invoices have been sent to businesses for the renewal of their domain names. In March, the official- sounding UK Internet Registry sent invoices to businesses for registering the.com version of their existing.co.uk domains.
But Nominet, the not-for-profit official registry for.uk domains, said it had no connections with UK Internet Registry, and urged businesses not to respond to such unexpected invoices, but to contact the Office of Fair Trading. ‘You can go through the Nominet website and see people who register directly with us. Don’t suspend common sense and look around,’ says Nominet’s managing director, Lesley Cowley.
Although not necessarily a scam, another potential pitfall is buying alternative domain names to the commonly used.co.uk or.com ones. UK reseller Net Registrar ran into trouble earlier this year when 8,000 business and personal customers were denied access to their Colombian- based.uk.co domains.
The administrator was in fact the University de los Andes, which decided to withdraw the service in February after the Colombian government ordered it to hand over control of the top-level domains to its Ministry of Communications.
‘There are alternatives to.co.uk, but it is important to know what you are buying,’ says Cowley. ‘There are also other suffixes which are not so bona fide such as.shop and.church. You need to download a fix for your browser to view these.’
Eversheds advises businesses to assess the usefulness of any domain before they buy it and not to be pressured by a hard-nosed sales tactic. Organisations should think: ‘If 10 minutes ago I didn’t care who owned this name, why should I care now?’ says Gold. ‘When looking at domain names, businesses should ask themselves if anybody is likely to intuitively type it into a browser. If not, there is little point buying it.’
In 2001, the Internet Corporation for Assigned Names and Numbers (ICANN) created seven new top level domain suffixes including.biz and.info and the European Union is due to start the registration process for the.eu domain in July this year.
While businesses shouldn’t rush to buy dubious domains, the proliferation of suffixes in addition to the traditional.co.uk and.com means businesses still need to devise a strategy to register the right names and protect their online brand.
Just ask PwC Consulting which, before it was bought by IBM, quite literally made an ass out of itself during its multimillion dollar rebranding as ‘Monday’. It secured www.introducingmonday.com but not the co.uk variation, which was snapped up by pranksters who proceeded to populate the site with dancing donkeys.
Gold also advises businesses to register domain names with misspellings of their brand to protect against ‘typosquatting’ by people who try and get traffic from surfers who mistype the genuine address.
With regulation of the domain name market unlikely in the near future – Nominet looked at a possible code of practice last year and deemed it to costly and difficult to implement – businesses using the web need to tread carefully to protect their online and offline brands.