Update: VeriSign sued over 'deceptive' renewals

Computerworld - Internet domain name company BulkRegister.com Inc. Inc. today won a court injunction to stop VeriSign Inc. from sending a "deceptive" advertising mailing to its customers.

In a lawsuit filed in U.S. District Court in Maryland yesterday, Baltimore-based BulkRegister.com alleges that VeriSign, which maintains the central registry of .com, .org and .net Web site names, sent out thousands of deceptive letters to BulkRegister.com customers, encouraging renewals for their Web site name registrations. In small type on the reverse side of the notices, the recipient is informed that by signing and sending in the VeriSign renewal, their domain name account will be transferred from BulkRegister.com to Mountain View, Calif.-based VeriSign.

In a ruling late this afternoon by U.S. District Judge Frederic N. Smalkin, VeriSign and its bulk mailing contractors were ordered to stop sending any further mailings to BulkRegister.com customers by noon EDT tomorrow. The court ruled that BulkRegister.com had been injured by the mailings and that the damage would continue if the mailings were not halted.

The "renewal" notices sent by VeriSign are misleading and likely to cause confusion, according to the order.

The lawsuit alleges that the VeriSign mailing was sent to a "substantial percentage" of BulkRegister.com's 2 million customers, many of whom have returned or plan to return the letters to "renew" their domain names. The mailing has caused lost revenue and disrupted customer relationships for BulkRegister.com, the company said.

The lawsuit, which seeks unspecified damages, includes two counts of false advertising and single counts of interference with contractual relations and interference with economic opportunity.
VeriSign spokesman Pat Burns said this morning that the company had no comment.
Tom D'Alleva, vice president of marketing at BulkRegister.com, said that the mailing is deceptive and misleading and that VeriSign is stealing customers from his company and the resellers it serves.
"It looks official. When they send a notice out, people believe it. They owned the planet at one point," he said referring to the period before other registrars were permitted to sell domain names.
D'Alleva said VeriSign's mailing, which apparently began in late March or early April, doesn't clearly ask recipients if they want to transfer their accounts. Instead, he said, the mailing uses "shady marketing practices" to scare customers into reacting quickly, because they are told that their domain name registrations are about to expire. In many cases, the registrations are far from approaching their expiration dates, he said.
In addition, the VeriSign renewal notices bill customers $29, which is more than twice the $12 fee charged by BulkRegister.com.
BulkRegister.com