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US Court Disconnects Canadian Domain Name Scammers
coondoggie writes "A US District Court today ordered a halt to the illegal practice of Canadian companies who the Federal Trade Commission said deceptively posed as domain name registrars and sent bogus bills to thousands of US small businesses and nonprofit organizations for their annual 'Website Address Listing.' The FTC said many of the businesses believed they would lose their Web site addresses unless they paid the bill, so they paid but in most cases the defendants did not provide domain registration services, did not provide the 'search optimization' services it claimed to provide, and bilked small businesses and nonprofits out of millions of dollars."
A federal district court judge in Chicago, Robert M. Dow, Jr., ordered a halt to the deceptive claims and froze the defendants' assets held in the United States, pending trial. The FTC will seek a permanent halt to the scheme and ask the court to order redress to victimized consumers.
Lesson is? Don't store money in the US if you are (allegedly) committing crimes in the US.
I'm trying to get outraged but the US only affected US assets. Something within its Jurisdiction.
There are two issues here. The US still controls the DNS servers, and Canada is part of NAFTA which forces them to comply with certain trade restrictions. Canadian courts could theoretically block this ruling and override the DNS change, but there is about a 0% chance of that happening. What is likely is that the US courts operated faster than the Canadian courts with this issue. I expect to see the Canadian courts charging these people with fraud in the next couple of months.
Except that the US Government regulates interstate and international trade within the borders of the USA. So, an international mail fraud that takes place inside the USA (US businesses received fraudulent letters and withdrew money from their US banks to pay in US currency), the government will enforce as much of its law as possible. It will also probably attempt to have the perps in Canada extradited to be tried in the USA for fraud/etc.
Now if only the Canadian government would do the same thing up here.
Christopher S. 'coldacid' Charabaruk -- coldacid.net
This is where extradition comes in.
If the US asks for the Canadian gov to hand over the criminals and the Canadian gov agrees that they are in fact criminals, then they'll get shipped off and charged in the US for breaking US law.
The same can happen in reverse.
MABASPLOOM!
I haven't read the article, but I'm going to go out on a limb and guess "Canadian companies" is used loosely since it's illegal to charge for a service and not provide it, even in the frozen, barbaric north. I suspect "Canadian companies" is being used rather than "illegal scammers that happen to operate out of Canada." Then again, I didn't read the article so...
Actually, given that a profitable amount of people believe they are communicating with Nigerian royalty this scam was pure gold. I mean, they went through the trouble of masquerading as the specific registrar. Too bad (?) they didn't cover their tracks better.
That's if the Canadian legal system agrees that they are criminals...
If for whatever reason, they determine that preying on stupidity isn't a crime, then a disagreement may ensue.
I'm not stating that's what will happen, just putting it out there.
I know there have been disagreements before as to what constitutes a crime, depending on where you are at, where the action took place, and whether or not the action was physical or virtual.
If I place an advertisement in a magazine, and say "Send $5.00, and SASE to xyz address" with nothing else in it, then whatever money comes my way, is mine. Granted, there are moral, and potential mail fraud issues involved if someone thinks that something is due them for their $5.00. All I have to do is mail back there SASE with a "Thank you" note, and I'm covered.
What this company did is clearly illegal, intent to defraud, etc...
What I proposed was not - yet someone, somewhere will claim they are kindred if not the same.
Who is general failure, and why is he reading my hard drive?
Long ago, we used to get official-looking bills for listings in a worldwide Telex directory, for several hundred dollars a year. They were mailed from somewhere in Europe, I think, but the bills that reached us went straight into the bin. Looks like the scam has been updated.
Yeah, I have gotten one of these too in Canada. Actually a client got one about renewing their .ca domain but they only had a .com. I think it was from the Canadian Internet Registrar and looked legit. Checked the registration online and it was good for another 6 months and the cost was also way more. I must say I can see how a small business owner who doesn't know much about how registration works would just think it's legit and pay. Luckily the client contacted me first though because they were going to pay.
The problem is enough people fall for this to make it profitable for them... basically like spam.
When I was working in webhosting, I don't know how different customers would call us asking about these "invoices" and if they should pay them or not... or asking why they have to pay us since they already paid them.... probably hundreds.
It always annoyed me how they could get away with it...
Back in the 80's there was a scam where a company would send bills for the phone directory and used the "walking fingers" logo which was never trademarked. People thought this came from the one and only phone company and paid it. The directory (if it was ever printed)was not the "official" one. (Back then there was only one phone book. it was either just before or just after the breakup of AT&T.)
That is true. That being said, fraud is fraud anywhere. You have fraudsters based in Canada (I am Canadian btw), who are scamming American companies and then splitting the money into American and Canadian accounts. What the US Courts have done is found these people to be guilty of fraud (I'm finding it hard to argue against their logic. You have a group charging for a service that they are not providing. No matter how stupid people have to be to fall for that, its still fraud), and they have frozen their US accounts and assets. The Canadian courts can do whatever they want, but if the Canadian court has any conception of justice (or at least just doing their job properly), then they should freeze the Canadian assets and charge the fraudsters too.
There is quite a bit wrong with Americans trying to impose their rulings on everyone. But that doesn't mean they're always wrong. Nor that every case where our two court systems do something like this is a an outrageous act of Americans trampling over our sovereignty.
Yeah, I agree. I've received regular mailings from them in spite of repeated phone calls and emails instructing them to cease and desist... why can't we have a CAN SPAM act for physical mail? (Or at least be able to put together "blacklists" that the Post office should just shred. They still get their money, and I don't see the mail.)
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