Watchdog rescues Kiwis from domain name scam

By ADAM GIFFORD

The Commerce Commission seized mail and intercepted credit card payments to stop more than $500,000 going into the Swiss bank accounts of two Australian domain name scammers.

Fair trading director Deborah Battell said the commission started the action late last year after receiving a flood of complaints about a mass mail-out from Domain Names NZ, a trading name linked to two Perth-based 25-year-olds, Chesley Rafferty and Bradley Norrish.

Holders of co.nz internet addresses were invited to buy the .net, .net.nz or .com version of the same name for $237 - up to 10 times as much as other registrars charge.

Battell said a survey of those who responded found most interpreted the mail as an invoice from their existing supplier.

"The commission needed to take as strong an action as possible to prevent consumers being misled by Domain Names NZ," she said.

"In situations where there are jurisdictional issues, it is unfeasible to take injunctions or court actions in New Zealand against a company based overseas so it used its search warrant powers and worked with banks to prevent consumers being misled.

"We returned as much mail as possible, giving the senders the option to continue with Domain Names NZ or to effectively not go ahead with the purchase."

Almost 2500 transactions were intercepted, meaning a loss to Rafferty and Norrish of about $580,000.

Given that there are about 120,000 .co.nz names registered at year end, that indicates the pair were getting a relatively high hit rate with their mail-outs.

Rafferty told the Age in Melbourne by email that he had sent out 800,000 letters to Australian domain name holders. Given a similar strike rate to New Zealand, the scam has netted millions of dollars.

Rafferty of course objects to the scam tag. "We are a domain registration company offering services via the very popular medium of direct marketing. We have large numbers of very satisfied customers who use our service worldwide," he told the Age.

The Western Australian Department of Consumer and Employment Protection listed the activities of Rafferty and Norrish's Domain Names Australia as one of its top 10 scams of 2003.

The Australian Competition and Consumer Commission has a case before the Federal Court in Melbourne alleging misleading and deceptive conduct under the Trade Practices Act.

Now Nominet, the registry for .uk addresses, is suing Rafferty, Norrish and their respective companies Internet Payments and Diverse Internet in the Federal Court in Perth for a mass mail-out across Britain in the name of UK Internet Registry.

Nominet said its "whois" database of 3 million .uk domain name holders was plundered by an automatic program.

Internet Registry UK was seeking £175 ($485) for a registration that usually costs about £15.