Back in February, we described the problem as follows:

• A perfect domain name pops into your mind.
• A quick check at your favorite domain registrar reveals that the domain is still available.
• For some reason, you put off the actual registration for a few days.
• And when you come back to finally register the domain, it's taken by someone else!

Back then, it took domain tasters "a few days" to intercept, analyze and register the domains that you came up with.

Now, it takes them less than 2 minutes.

Last week an associate of mine was bulk-checking 200+ generic typo domains through a software that shall remain unnamed for now. All of the domains were available. But less than 2 minutes later, more than 50 of the domains had been registered by a number of different offshore companies from the Bahamas.

There is no way this could be a coincidence. And if you read the more recent comments in the above mentioned article, it's clearer than ever before that there are severe leaks somewhere that allow domain tasters to compromise your domain searches and steal your domain ideas.

Brad writes:

Yesterday, I did a search on both estibot and whois.sc.. About 4 different names with each of them. I used estibot to check the overture traffic, and those on whois.sc I wasn't concerned about the overture. Anyway, 6 out of the 8 ( 3 i had checked on estibot and 3 on whois.sc ) Were registered less than 1 minute and 30 seconds later by

BelgiumDomains
501 NE 1st. Ave. Suite #201
Miami, FL 33132
347-214-0249

The evidence is overwhelming that they were using illegal data sniffing to steal these domains. I have already contacted a very experienced attorney on the matter and I will update when I get further along.

However, in the meantime, I suggest not using whois.sc or estibot.com at all.

Josh, the author of Estibot, responds:

Thank you for reporting this problem also via e-mail. I appreciate that. I'm the programmer of EstiBot and this causes great concern. I can tell you for sure that the searches on EstiBot are not given to any third party. [...]

What is happening here is that Belgium Domains is sniffing the whois services, not EstiBot itself. EstiBot performs a whois search for the appraised domains, because it's an important part of the valuation.

The culprit in this case seems to be Network Solutions. Their whois seems to be compromised. I will try to find an alternative whois service. Any help is appreciated, if you have suggestions please let me know, you will find my contact details on the site. I am willing to pay for a reliable whois service.

Finally I'd like to remind everyone that every time you do a whois search with any service, you run a risk of losing your domain.

Have you had a similar experience? Share it below, providing as many details as possible, and maybe we can do something about it.

Kheweul.com is now the second ICANN-accredited registrar in Africa (the first being Internet Solutions of South Africa) and the first in West Africa. Kheweul.com has been accredited to register domain names from the .biz, .com, .info, .name, .net, .org, and .pro top-level domains.

Mouhamet Diop, Chairman and CEO of Kheweul.com believes his company can offer a more local service to connect Africans to the world:

We’re proud to be the first ICANN-accredited Registrar in West Africa and the second in Africa. Kheweul.Com is going to work closely with all African country-code top-level domain managers and all world-wide registries to provide domain name services to local African communities. We also plan to promote the digitalization of African cultural heritage and help the preserve of African multimedia content.

To much of the world this is not nearly as intuitive. While the Latin alphabet is the most widely used, 3 other alphabets are used in large portions of the world. The Cyrillic alphabet is spread through Russia, parts of Eastern Europe and former republics of the Soviet Union. The Arabic alphabet spans from Northern Africa through the Middle East and the Brahmic-derived alphabets of Southeast Asia. Throw in the accents, diacritics and ligatures seen in various languages using the Latin alphabet, and the possible combinations become staggering.

So how could this problem be addressed? The simplest solution would be to simply dictate that all domain names would consist of only 26 letters, ten numerals and the hyphen. However, that narrow view limits and complicates the accessibility of the internet to large swaths of the world’s population.

Enter Internationalized Domain Names. Introduced by Martin Duerst in 1996 and implemented in 1998, the system was eventually adopted (with additions and revisions) as the Internationalized Domain Names in Applications (IDNA) system. Within the IDNA system, an internationalized domain name is a name consisting of labels, which can successfully be translated by the ToASCII algorithm.

Internationalizing a domain name works like this. The ToASCII algorithm is applied individually to each label within a domain name. If the ToASCII algorithm fails because any label contains at least one non-ASCII character, then further steps are taken. The name is first "normalized" using the Nameprep algorithm. The normalized name is then converted to ASCII via the Punycode algorithm. Finally, the four character ASCII Compatible Encoding (ACE) prefix "xn- -" is added. If, for any reason, the ToASCII algorithm fails (i.e. the resulting string exceeds 63 characters) the name cannot be internationalized at this time.

To "de-internationalize" a domain name, the ToUNICODE algorithm is applied, resulting in the originally entered domain name, except that any "normalization" will not be undone. The ToUNICODE algorithm will always succeed on a properly internationalized domain name because it is simply "undoing" the work of the ToASCII algorithm.

In theory, the shift into and out of international domain names could occur seamlessly and invisible to the user. This is a useful feature for users but can also expose them to a dangerous spoof. In essence, the idea behind the IDN spoof is to register a domain name visually very similar to a trademarked name, for example Paypal. Due to the visual similarity of the Latin "a" and Cyrillic "a" a domain name consisting of mixed alphabets can be registered and when presented as a link, (like this, http://www.pаypal.com/ where the first "a" is actually a Cyrillic "a") can easily fool users into think they are at the genuine Paypal website. This, of course, would be a great opportunity for phishing scams – or bogus domain auctions.

This was foreseen and guidelines were issued to registries prior to implementing IDNs to address concerns of this spoof. Of course, not all registries fully embraced these guidelines and, as the link above shows, the spoff can be run today. This is now being addressed by browsers. Internet Explorer 7 allows users to only decode selected languages for display in the address bar. Mozilla and Opera have chosen to display the Punycode version of the IDN unless the registry is on a "whitelist" of registries effectively implementing IDN anti-fraud guidelines (such as prohibiting the use of mixed character sets within a name.) Safari displays the Punycode translation of the domain name unless the setting in Preferences is altered to allow display of the decoded name.

So what will the impact of Internationalized Domain Names be on the Internet as a whole? More important to domainers, how does this impact opportunities in domain name investing, and is it already too late to get in on this?

We'll answer these questions, and more, in a future article.

“Dear (Client Name)

The Internet Corporation for Assigned Names and Numbers (ICANN®) recently agreed to reduce their Registrar Transaction Fee from $.25 to $.22. What does this mean for you?

Good news. You have been credited $.03/yr for each domain name you registered or renewed dating back to July 1, 2006* — $.03 has been placed into your Go Daddy® account with this customer number: (Account Number)

Your in-store credit will be applied to your purchases at GoDaddy.com® until it's gone or for up to 12 months, whichever comes sooner. If you have any questions, please contact a customer service representative at 480-505-8877.

As always, thank you for being a Go Daddy customer.

Sincerely,

Bob Parsons
CEO and Founder
GoDaddy.com

If you’ve received an email similar to this, a few thoughts probably crossed your mind. First and foremost, you probably thought, “Sweet! A refund!” Next, you thought, “I don’t remember hearing about a refund.” Last, you may have asked yourself, “Wait, why is this refund retroactive for almost a full year?”

The answer is quite simple: bureaucracy.

ICANN adopted their fiscal year 2006 Annual Budget on June 30, 2006. In this budget, the registration fee is 25 cents. The ICANN Board of Directors approved this budget. However, the registration fee schedule had yet to be approved by the registrars. Before the fee schedule was sent to the registrars for approval, ICANN changed the fee to 22 cents.

Notice of this fee reduction was sent to registrars on March 14, 2007. ICANN had yet to invoice any registrars for registrations from July 1, 2006 forward. Of course, registrars such as GoDaddy had been collecting registration fees based upon the published ICANN 2006 Annual Budget. So, now that the fees have been finalized at 22 cents, GoDaddy is crediting the 3 cent per domain difference back into customers accounts.

And that, in a nutshell is why GoDaddy customers are getting money back, 3 cents at a time. Don’t spend it all in one place.

Whether other registrars will follow suit is unclear. ICANN advised all registrars that did charge their customers 25 cents based on the ICANN's 2006 Annual Budget to check back with their (the registrars') own legal departments to see if they are legally obligated to pass on the refund to end users.

The company, founded in 2000, was managed by John Naruszewicz and Kevin Medina. From the outside, things were going well for the business and personal partners. However, inside the private lives of the pair and the company they managed, things were headed south quickly.

In late 2005, ICANN began receiving complaints of fraud at the small registrar and eNom reseller. Customers told ICANN of unanswered support tickets, interminably long hold times for phone calls and overcharging three to four times for registrations and renewals. Customers audacious enough to have the charges reversed by their credit card companies often found that RegisterFly had denied access to their registered names.

In a strange circle of events, ICANN was forwarding complaints regarding RegisterFly to registrar eNom. In the eyes of ICANN, RegisterFly was a reseller of eNom services and thus all complaints against RegisterFly were complaints against eNom. On January 17, 2006 eNom was notified that ICANN was “receiving an unusually high number of complaints concerning RegisterFly.” RegisterFly then notified ICANN that it would be transferring its domains from eNom to RegisterFly’s own account. Complaints continued to pour into ICANN and ICANN issued a second statement to eNom warning that company of a potential breach of their accreditation agreement. The alleged breach was due to eNom’s failure to resolve allegations that RegisterFly was deliberately entering false data into customers’ WHOIS records. Still, the accreditation process for RegisterFly went on.

Months passed and ICANN continued to receive complaints of poor customer service and outright fraud at RegisterFly. In addition to the previous complaints, customers were now reporting the sudden disappearance of domain names which were not about to expire. Kevin Medina, then co-chair of RegisterFly told ICANN the complaints were merely “growing pains” at the registrar. Shortly thereafter, complaints grew graver as domain name theft allegations began to find their way to ICANN officials.

In December 2006 ICANN met with RegisterFly officials to deliver a letter outlining ICANN’s concerns over complaints of failure to renew domain names, billing inconsistencies and failure to pay ICANN invoices. RegisterFly was to respond to these concerns, in writing, within 30 days of this meeting.

January 2007 came and went. No letter from RegisterFly was received at ICANN, but the complaints certainly continued to come in. The bulk of the complaints were the same as they had been for the previous year. However, three groups also lodged complaints with ICANN. These were other ICANN registrars, ICANN board members and the US Department of Commerce.

It is no coincidence, then, that the implosion of the company began in earnest the very next month. Citing a long and well-documented history of unresolved customer complaints, eNom cut all ties to RegisterFly. Kevin Medina was fired from his post as CEO of RegisterFly amid allegations of misuse of company funds. In an attempt to force Medina to sell his half of RegisterFly, business partner and ex-boyfriend John Naruszewicz filed suit against Medina. Naruszewicz claims Medina used corporate funds for such personal luxuries as a $10,000-a-month South Beach penthouse, a $9,000 escort, $6,000 in liposuction services and even a $6,000 Chihuahua.

These alleged raids on the company’s wallet have resulted in bringing RegisterFly to the brink of bankruptcy. The lawsuit states that RegisterFly’s customer base has fallen from 200,000 to 125,000 customers because the company cannot afford to pay the registration fees when requested.

If it all were to end it here, this would be one of the strangest stories of excess and brazen disregard for customer service yet recorder. Of course, the adventure doesn’t end here.

After his firing, Medina set up a visually identical site at RegisterFly.net. This was effectively a phishing site. On March 8, 2007 Naruszewicz stated that the company had regained control of its website and account information and that the company would begin rectifying payment problems and unfairly expired domain names immediately. However, in a move that surprised even Medina's lawyers, Judge Sheridan of US District Court ordered that control of RegisterFly be returned to Medina.

Meanwhile, ICANN was proceeding towards removing RegisterFly’s accreditation. On Sunday, March 4, 2007 ICANN announced their intent to file suit against RegisterFly to cease and desist doing business as an ICANN accredited registrar. RegisterFly was able to delay this action by providing a minimum of customer account information to ICANN. On March 16, 2007 RegisterFly was notified they would lose ICANN accreditation on March 31, 2007. RegisterFly exercised their right to appeal and stalled ICANN’s temporary restraining order for 30 days.

The temporary restraining order against RegisterFly was granted to ICANN on April 16, 2007. This order required RegisterFly to hand over all data to ICANN and supply updates to this data every seven days. Failure to meet these terms resulted in an injunction on April 27, 2007. This injunction allows ICANN to begin transfer of registrations from RegisterFly to another accredited registrar as soon as practical. The ICANN release also requests statements of interest from qualified registrars to handle the transfer. These are due by today (April 30) so no transfer action will take place before that date.

The injunction against RegisterFly requires the following statement be posted immediately at RegisterFly’s website:

NOTICE TO CONSUMERS: THE INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS, THE NOT-FOR-PROFIT ENTITY THAT ADMINSTERS THE INTERNET’S DOMAIN NAME SYSTEM, HAS ISSUED A NOTICE OF TERMINATION OF THIS COMPANY’S ACCREDITATION TO SERVE AS AN INTERNET DOMAIN REGISTRAR. PLEASE SEE www.icann.org FOR FUTHER INFORMATION.

As of right now, RegisterFly has not posted this statement, is still claiming ICANN accreditation at its website and is still taking in funds for services one can reasonably assume will never be rendered.

So what comes next for RegisterFly’s customers? ICANN is working towards a mass transfer of registrations to another accredited registrar and a deal has been reached with several domain registries to prevent improperly expired domain names from being resold to new owners. A class action lawsuit has also been filed against RegisterFly to attempt to regain some of the payments lost. However, it is likely that many RegisterFly customers will never receive full reparations.

In the wake of this debacle, questions are flying in ICANN’s direction. How did a company with such an egregious complaint history become accredited in the first place? Why did it take so long for ICANN to take action against RegisterFly given the gross number of complaints lodged against them? As the implosion of RegisterFly nears its bizarre end, the answers to these questions will have far reaching effects on the world we do business in.

"We ask RegisterFly and its management to co-operate fully with the order," said Dr Paul Twomey, ICANN President and CEO.

The order encompasses all domains registered by RegisterFly customers, including those registered under a proxy registration service, such as the company's own "ProtectFly." The Court also scheduled a preliminary injunction hearing for April 26, 2007, which, if ICANN prevails, will extend the force and effect of the order for a longer period of time.

ICANN's repeated requests for accurate registrant data from RegisterFly were initially refused by RegisterFly and then later partially-granted, although ICANN has remained concerned over the accuracy of some of the data, finding a significant portion of it deficient.

With current and accurate registrant data, ICANN says that they will be in a position to initiate a bulk transfer to another registrar, either with RegisterFly's cooperation while the company remains an ICANN-accredited registrar, or unilaterally if RegisterFly's accreditation is terminated.

The Court's order is available here.

Aside from the lawsuit, ICANN announced that it has initiated a review of its Registrar Accreditation Agreement (RAA) in an effort to reduce the possibility of this situation being repeated in future.

Late last night, RegisterFly CEO Kevin Medina hurriedly called a press conference to lay out a plan that he claims will allow him to put the embattled domain registrar back on the map.

The key to the comeback? An unexpected inheritance from a long-lost cousin who had passed away last month. Medina explained:

My cousin was a hard worker in the oil industry and while I am very saddened to hear of his untimely demise, nothing had prepared me for the fact that he left me a multi-million dollar inheritance.

The unexpected windfall, which according to Medina amounts to approximately $41.27 million, could be used to recapitalize RegisterFly and to acquire a stake in several other domain registrars:

RegisterFly lost its ICANN accreditation purely due to ICANN's bad judgement. This inheritance will allow us to buy a majority position in one or several of the larger accredited registrars so we can resume our mission of serving our customers. As a matter of fact, we have already initiated negotiations with GoDaddy, Network Solutions and eNom.

GoDaddy founder Bob Parsons confirmed on his blog that he has in fact been approached by Medina:

Everything is for sale and we named our price. Medina should either pay up or shut up. Why I'm not afraid of retirement: I've been asked to manage the Caribbean's foremost holiday camp.

Near the end of the press conference, Medina explained to baffled reporters that in order to qualify for the inheritance, he had donated $20,000 to an African orphanage and changed his last name to Odelikekle. He closed the conference with the words, "I've got a plane to catch. See you soon." Shortly thereafter he was seen boarding a Nigerian Airways jet headed for Lagos, Nigeria.

Daily Domainer comments

On a day like this one, these developments come as no surprise. Everyone at the recent ICANN meeting in Lisbon, Portugal, knew that "something" was cooking and that Medina was planning an announcement for "early April". Most had expected a declaration of bankruptcy but just like when he regained control of RegisterFly a few weeks ago, Medina is always good for a surprise.

They are calling for persons who have been wronged by the registrar to join a class action lawsuit sparked by allegedly wronged domain owner Anne Martinez.

More specifically, the law firm is calling for persons who have experienced one or more of the following:

• Denial of access to domains
• Loss of domains while trying to transfer or renew domains
• Inappropriate billing for services not rendered by the registrar
• Changing of ownership and / or contact information associated with the domain to RegisterFly or someone else without your knowledge

According to the class action lawsuit, ICANN knew, even before certifying the company as an ICANN registrar, that RegisterFly had a number of customer service issues. The lawsuit also claims that ICANN has been aware of the infractions listed in the lawsuit since last summer but neglected to take the appropriate action.

What would the appropriate action have been? Well, according to section 5.3.4 of the Registrar Accreditation Agreement (RAA), it would have been to demand that all issues be rectified within 15 days of ICANN’s awareness of the complaint or risk loss of accreditation. Since that didn’t happen until February 21, 2007, ICANN has been named in the class action lawsuit. eNom has also been named in the lawsuit. RegisterFly had been a reseller for the company for a period of time.

On March 16, 2007, ICANN gave notice to RegisterFly that action has begun to revoke its ICANN accreditation. According to a post on the March 28, 2007 ICANN blog though, ICANN is having just as much difficulty getting answers and cooperation from RegisterFly as RegisterFly’s customers have. The post states that ICANN has requested documentation from RegisterFly so that a bulk transfer can be completed and that RegisterFly has been remiss in submitting complete, accurate, up-to-date data.

As of today, Martinez has had only partial success in transferring her domain names from RegisterFly, ICANN has yet to receive the requested up-to-date data, and the courts have yet to make further rulings in this lawsuit. RegisterFly CEO Kevin Medina has made no public comments on the allegations, but has privately rejected offers to purchase the embattled registrar.

Daily Domainer comments:

If that's what it takes to get RegisterFly to authorize the bulk transfer of domains to another registrar, so be it. But beyond that, a class action lawsuit is probably a waste of time and energy. RegisterFly appears to be insolvent and while ICANN did act too slowly, they have certainly learned their lesson for the future.

The only thing that can come out of this action is some money for the lawyers, some token compensation for RegisterFly customers (how about a fly swatter?), and the righteous satisfaction that "something that had to be done, has been done". Enraged RegisterFly customers who think that that's worth the trouble can join the suit here.

ICANN also terminated RegisterFly's right to use the ICANN Accredited Registrar logo on its website. The logo however is still visible in the left lower corner of RegisterFly's homepage.

According to ICANN, RegisterFly will be required to unlock and provide all necessary Authinfo codes to allow domain name transfers to occur. Any and all registrants wishing to transfer away from RegisterFly between now and March 31 should be allowed to do so efficiently and expeditiously.

"Terminating accreditation is the strongest measure ICANN is able to take against RegisterFly under its powers," Dr. Paul Twomey, President and CEO of ICANN said on Friday. "ICANN has been frustrated and distressed by recent management confusion inside RegisterFly. I completely understand the greater frustration and enormous difficulty that this has created for registrants."

On March 31 ICANN will approve a bulk transfer of all current RegisterFly domain names to another ICANN accredited Registrar. "Of course, RegisterFly does not have to wait till then. They can request ICANN to approve a bulk transfer immediately. I call on RegisterFly to act in the interests of registrants and seek such a transfer from us straight away," Dr. Twomey said.

These developments do not come as a surprise. As the Daily Domainer and others had reported, RegisterFly's clients had been facing numerous problems including fraudulent charges to their credit cards and wrongly expired domains. ICANN has been criticized for not having taken action sooner.

In a legal decision that stunned even the lawyers for the victor, a U.S. District Court judge on Mar. 8 handed over the embattled Web registrar Registerfly.com to the executive who was running it when it began to founder. Judge Peter Sheridan ruled in favor of defendant Kevin Medina, who had been chief executive of the parent company, Unifiednames, before he was fired by two other board members on Feb. 12.

Medina's partners, including John Naruszewicz, who temporarily took over as RegisterFly CEO, had accused him of embezzling company funds and of being the primary cause of all of the registrar's problems.

Naruszewicz said that he has no plans to appeal the judge's decision:

We lost and it's all over. The company will implode in days and 1 million domain names are going to be lost. It's a damned shame.

Meanwhile, ICANN stated on its blog that they had gained access to the majority of RegisterFly's registrant data, a potentially significant step toward the protection of registrants in the case of RegisterFly business failure. Paul Levins of ICANN also defended the organization against allegations that it was doing too little, too late while RegisterFly is burning down:

We are doing everything in our power to help. I’m sure everyone in your situation would like to see us say to RegisterFly: You are closed as of today. We are taking your data and giving it to someone else and a more responsible and well run Registrar is now taking over.

The simple fact is we can’t do that. As I have said a few times in this forum, we are NOT a regulator. We are not the Internet police. Whilst that may be an attractive idea at a time like this, it probably isn’t in anyone’s long term interests for us to be that. We have to rely on contract law here. So that’s why we are sending them notices of breaches. Because if they fail to cure them we are then in a position to take their accreditation away.

RegisterFly could lose its ICANN accreditation as early as March 14. Can Kevin Medina stage a comeback and breathe fresh life into the troubled registrar?