Lately, a new twist on the old game has been targeted at businesses with Web sites: phony e-mails claiming that it's time to renew domain-name registration. The Better Business Bureaus report that they have recently received a large number of complaints from small-business owners about domain-name scammers.
VIGILANCE SAVES. The fraudulent e-mails are official-looking "renewal notices," supposedly from domain registrars, that turn out to be sly solicitations for business disguised as invoices. Like the old-style invoice scams, they announce that the business registration is about to expire and may be lost if payment isn't made without delay. Some of these scam invoices are e-mail, but others turn up via snail mail -- often designed to resemble an official government notice, according to the BBB. Many are carefully worded so as to skirt U.S. Postal Service regulations aimed at curbing fraud.
It's only after the phony invoice is paid that the business owner receives a renewal notice from the legitimate domain-registration company. Often, invoice scammers are clever enough to send out renewal notices just ahead of actual expiration deadlines. When consumers don't bother to check their records, they are likely to pay the bogus invoice unwittingly, but their money typically never reaches a legitimate domain registrar.
A second type of domain scam advises businesses that another company is trying to register "an alternative version of your domain name." This particular message offers the chance to register the name, but at a high price, in order to "prevent the other person from taking your domain name." The communication urges the business recipient to act quickly.
SENSE OF URGENCY. A third approach is a "renewal notice" sent by a domain-name competitor operating under a name that is similar to the bona fide registrar with whom the business owner has a relationship. By paying the invoice, the customer unknowingly switches to the new registrar -- and possibly subjects the business to increased fees. A class-action lawsuit aimed at stopping this practice is currently underway in California.
How does a small-business owner avoid being scammed or paying for a service that is neither wanted nor needed? Here's some advice from the BBB:
Educate bookkeepers, accounting staff and Web site managers to beware of "domain registration" solicitations designed as invoices.
Only accept domain renewal notices from the company with whom you have registered your domain name.
To check when you need to renew your domain name, contact your existing domain registrar.
If you doubt the legitimacy of any invoice, check your records to confirm claims of previous business dealings with the company or seller.
Establish effective internal controls for the payment of invoices.
If you think your business has already paid a phony domain renewal or domain-registration invoice, file a complaint with the BBB and report the problem to the Postal Service. You might also want to contact your bank or credit-card company to have payment stopped or reversed if the transaction was a recent one, the BBB advises. Smart Answers columnist Karen E. Klein is a Los Angeles-based writer who specializes in covering covered entrepreneurship and small-business issues.