Running a business is tough enough these days without having to worry about some faceless fraudster conning you into spending money unnecessarily.
But that’s precisely what appears to be happening with an Internet domain registration scam that has gotten the attention of the Better Business Bureau in recent weeks.
“Businesses beware,” the BBB warning begins. “Scammers in Asia are trying to trick you into paying a premium for your website domain names. Don’t fall for these scare tactics.”
None of this is news to John Williams, a local business owner who contacted me a little over a month ago to complain his company had been the target for the past year of what he referred to as a Chinese government-inspired “Internet protection racket.”
“Please investigate this, and do a column on it,” the Albuquerque resident wrote. “This Chinese aggression is extremely shocking and serious, clearly the beginning of an attempt to take over all Internet commerce on a global basis.”
Williams told the Journal last week that all four of his companies have been targeted by these emails, which he suspected weren’t on the up and up from the get-go.
“My initial thought was it was some type of protection racket using extortion – ‘You pay us X amount of money to register your domain if you want to do business in Asia and China,” he said.
“I was essentially told we wouldn’t be able to do business in Asia, which is nonsense. All our companies have been in business for years. No one’s going to tell me we can’t use our names in those countries.”
As it turns out, the original email Williams received is identical or similar to others that can be found through a simple online search of “Internet domain scams.”
In short, they claim to be from an Asian-based domain registration service that has received an application from someone who wants to register a website domain name in Asia that just so happens to be an exact match to one in the U.S.
The American business owner is then given seven days to respond. If he or she fails to do so, then the application will be approved as submitted, the email says.
In other words, the U.S. business is told it has a short time to block this transaction by purchasing these domains – at a highly inflated price – or else the Asian registration service will approve the application to what turns out to be a fictitious third party.
“There is no competing business, and the price to purchase the domain is much higher than you would pay elsewhere,” the BBB warns. “Often, the email sender isn’t even an actual domain registration business. He/she simply purchases the domain elsewhere for a few dollars and immediately sells it back to the victim for an inflated price.”
Williams said he never got to the point of discussing money with the company. Instead, he said, he tried to “shame them” for stealing the names of American companies.
“Why are you ripping off American names?” Williams said he told them. “Are you not proud of Chinese names?”
Whether that’s the reason or not, Williams said he hasn’t heard back from his Chinese contact in the past month or so.
“It’s extremely rare when you can use shame to stop a scammer, but in this case it seems to have worked,” he said.
To help U.S. businesses from falling for this scam, the BBB offers these tips:
- Don’t overpay: There shouldn’t be a large price difference among legitimate registrars.
- Use one business to register all your domain names: That’s because there is another popular scam that involves phony invoices for domains you never purchased. Choose a single provider to register all your domains.
- Watch for poor grammar and spelling: As is the case with many other online scams, these emails typically are full of typos and poor sentence structure.
- Don’t act immediately: Creating a sense of urgency is all part of the scam.
Nick Pappas is assistant business editor at the Albuquerque Journal and writes a blog called “Scammed, Etc.” Contact him at email@example.com or 505-823-3847 if you are aware of what sounds like a scam. To report a scam to law enforcement, contact the New Mexico Consumer Protection Division toll-free at 1-800-678-1508.