(Original Source:
http://www.smh.com.au/articles/2004/04/12/1081621895777.html
Duplicated here in case it ever expires on their website. However, if it does, do a search on google for variations of 'Domain Name Register Scam', and you'll likely find other articles).

Net closes on web domain name scam
By David Elias
April 13, 2004

Business partners Chesley Rafferty and Bradley Norrish see themselves as free-market crusaders, but they have made their names across the world for scooping up millions of dollars from unsuspecting businesses.

Warnings about their activities have been posted on the websites of government fair trading and consumer affairs offices in most Australian states as well as New Zealand and the United Kingdom. 

The NZ Commerce Commission has intercepted and returned more than $500,000 in cheque and credit card payments which Fair Trading Commissioner Deborah Battell said were destined for a Swiss bank account. 

And in simultaneous raids on three Perth addresses, lawyers acting for Nominet UK - the registrar of Britain's .uk internet websites - have seized scores of documents and computer records of British internet addresses. 

The 25-year-old former school friends operate a number of internet related companies either separately or as joint directors and shareholders. Some of these companies have sent letters to businesses and organisations that are, according to regulatory and consumer authorities, misleading and deceptive or intended to be so because they look like invoices for the renewal of internet domain name registrations. 

With one exception, the letters invited owners of .com.au, .co.uk and .co.nz websites to register names in the parallel .net.au, .net.uk or .net.nz domains.

The authorities say thousands of businesses sent in cheques and credit card payments believing their registrations would expire if they did not pay by a "due date". 

Australian businesses paid $198 and $237 each. Last year New Zealanders paid $NZ237 ($206) and in Britain firms paid 175 ($422) - up to four times the going rate for domain registrations.

The Australian Competition and Consumer Commission describes the practice as a scam that relies on a busy office and an unclear understanding of the domain name system. The West Australian Department of Consumer and Employment Protection website lists it as one of last year's top 10 scams.

The entrepreneurs have used "virtual offices" in London, Auckland, Brisbane, Sydney and Melbourne for their mail-outs and to redirect payments to their real offices in Perth. 

Steve Guardiani of the Melbourne Business Centre said he had never met Mr Rafferty but rued the day he agreed to provide Domain Names Australia with a $70 a week "virtual" address for two mail-outs last year. 

"Without any warning, we got a deluge of letters," he said. "I could see that some of them contained cheques but there were also a lot of opened letters being returned with rude comments written over them."

Mr Guardiani said that he initially withheld all of the mail but after checks showed Domain Names Australia was correctly registered with the Australian Securities and Investments Commission and had a genuine ABN number, he had no option but to forward it to Perth. 

The ACCC and the Australian domain name administrator, AuDA, took action against the pair in 2002 when Norrish and his company, Internet Registrations Australia, were permanently injuncted in the Federal Court for making false and misleading representations, and Rafferty and his business, Internet Registry, gave undertakings to AuDA not to send out false or misleading material.

Now the ACCC and AuDA have taken Rafferty and his new business, Domain Names Australia, to task. They have asked the Federal Court in Melbourne for declarations and restraining orders under sections of the Trade Practices Act that deal with misleading and deceptive conduct. 

Nominet UK is taking similar action under the Trade Practices Act in the Federal Court in Perth where it is also seeking damages against both Rafferty and Norrish and their respective companies, Internet Payments and Diverse Internet, for alleged breaches of copyright.

This follows a mail-out across Britain last year by a mysterious and seemingly unregistered business, UK Internet Registry Ltd. Nominet claims that an automated computer program plundered the database of Nominet's "who is" facility that holds the names and addresses of 3 million British website registrants. 

Nominet's lawyers have declined to reveal how they managed to join UK Internet Registry to the court action when there are no ASIC records to show the registration of a business name or company with that name. 

Because the Australian case is awaiting a decision and the British case is due to be heard by Justice Robert French in June, AuDA, the ACCC and Nominet would not comment. 

In New Zealand, where there are no cases pending, the authorities in Wellington were only too happy to talk about the activities of Rafferty's local business, Domain Names NZ. 

This is a business name registered to Internet Registrations World Wide, an Australian company where Norrish gave up his board seat to Rafferty in January last year, a month after the Federal Court's findings against him and Internet Registrations Australia. 

Debbie Monahan, the NZ domain names commissioner, said many businesses were confused by the similarity between Domain Names NZ and DomainZ, which until recently held a monopoly on NZ domain name registrations. "In the confusion, some businesses incorrectly mailed their cheques to DomainZ, which helped us discover quickly what was going on." 

Monahan said Domain Names NZ had first contacted businesses with .co.nz domains last July and then again in October. "The registrants were offered .net.nz registrations. Most thought it was an invoice for a renewal for two years but New Zealand registrars were only offering one-year registrations." 

At $237, these were more than four times the normal price.

The NZ Commerce Commission had been contacted by more than 100 people who had received the "invoices" before it used its statutory powers to intercept more than 2000 payments worth more than $NZ580,000. 

"The commission executed search warrants on the New Zealand Post Office where we scooped up hundreds of letters with cheques in them on their way to Australia. We then went to the New Zealand banks and intercepted credit card payments as well as more cheques in the process of being cleared. These were being directed to a bank account in Switzerland." 

Rafferty said via email he was outraged by the NZ Commerce Commission's action.

He said he had sent 800,000 letters to Australian companies and AuDA had put complaints no higher than 800, or 0.1 per cent.

He said that AuDA, which was not a government agency, was maintaining an archaic system that restricted registrars and resellers of domain names to protect market share rather than promote competition. 

Rafferty denied Domain Names Australia had offered to renew registrations in its letters. 

"I strongly believe that the mail-outs are not misleading or deceptive," he said. 

Norrish could not be reached for comment. 
 

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