Domain Renewal

Everytime I get one of their direct mail letters about domain renewal my blood boils. I'm talking about Domain Registry of America and their deceptive practice for trying to get customers to renew and transfer their web domains.

If you own a domain and you live in the U.S., you have undoubtedly received what looks to be an official letter with a bold headline stating: Domain Name Expiration Notice. The letter also has a picture of the American Flag and it resembles a government form letter.

A domain owner will usually get these domain renewal request letters approximately 6 months out from the actual domain expiration!

The letter is presented and worded in such a way as to trick domain owners into signing and returning the forms to Domain Registry of America, thus inadvertently transferring their domain names to them and paying $25 per domain -- which is a large cost increase from the $8.95 - $14.95 price that that most domain owners pay to setup their domains.

Unfortunately, these domain renewal letters are most likely legal because they do include a paragraph that protects the registrar from being accused of deceiptful practices. Paragraph 3 states that the domain owner is under no obligation to transfer the domain and that the consumer can compare prices and decide for themsleves.

Of course this protective paragraph is surrounded by other paragraphs containing what I call "scare tactic" text which directs you to take action within 30 days (5 months before the domain actually expires!).

It's a very coercive direct mail letter. The average person who skim reads the letter may very well follow through and inadvertently renew/transfer their domains.

Let's face it, not many people actually read direct mail pieces they receive. They usually open skim read them. The direct marketing copy in the letter used by Domain Registry of America banks on the fact that most people are overwhelmed with direct mail and only glance or skim read this type of material before throwing it away or taking some kind of action.

This domain renewal scam may be technically legal, but the spirit of the direct mail letter is deceptive in my opinion. It's main objective is urgency: to coerce you into quick action of transferring your domain and adding on another year, two or three.

You may recall that in 2002 Verisign, Inc. (Nasdaq: VRSN), the largest Internet registrar, was sued by several organizations (as well as shareholders) for deceptive business practices similar to what I'm describing here.

Go Daddy Software, Inc. sued VeriSign alleging false and deceptive advertising, interference with customer relationships, misappropriation of trade secrets, and consumer fraud. Go Daddy received a temporary restraining order and preliminary injunction to prevent VeriSign from engaging in further deceptive advertising.

According to Godaddy Software, Inc.:

"The lawsuit was triggered by a recent VeriSign marketing campaign, designed to cause customers to unwittingly transfer their business to VeriSign. Go Daddy's customer ranks were flooded with "Domain Name Expiration Notices" boldly marked with "Reply By" dates that had no correlation with actual domain name expiration dates. The VeriSign marketing campaign, which gained some notoriety among Internet media writers, has been likened to the long distance "slamming" schemes used by telephone companies."

BulkRegister.com, the fourth largest domain registrar also sued Verisign for deceptive business practices.

Following these lawsuits, companies like Verisign and Domain Registry of America have modified their direct mail letters to include a protective notifications and legal language in their registration agreements which are always included on the back side of the form (in tiny print). So, they now include a statement that clearly indicates that the letter is requesting a domain transfer and that the domain owner is under no obligation to transfer.