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RegisterFly
Company typePrivate
IndustryDomain registrar
Founded2000
HeadquartersWest Orange, New Jersey
Key people
John Naruszewicz, Kevin Medina
ProductsDomain names
Websitewww.registerfly.com

RegisterFly was a New Jersey (US) based internet hosting and domain name registrar that had their ICANN-accredited status terminated in March 2007, but is still accredited pending an arbitration hearing.[1] The company formerly acted as a reseller of the services of eNom, but had become its own accredited registrar in 2006. In February 2007 the company was registrar for approximately 2,000,000 domain names held by about 900,000 customers.[2] Notable clients of RegisterFly included the government of Thailand, the Easter Seals charity and pop star Michael Jackson.[3] In 2007 ICANN launched an investigation of RegisterFly amid allegations of fraud. No lawsuits were initially filed between the governing domain body and the company, but there was a lawsuit between the company's two owners, CEO John Naruszewicz and Kevin Medina. On March 6, 2007 RegisterFly's website went offline for a time, causing serious concern amongst registrant customers of RegisterFly.[4][5]

The incidents and lawsuit that then followed were the result of a feud between RegisterFly co-owners Kevin Medina and John Naruszewicz, who were boyfriends at one point.[6] Their ten year long business and romantic relationship came to an end, and Medina claimed that Naruszewicz became "unstable and hostile" after their personal relationship broke up, culminating in a purported business takeover attempt.[7][8] The lawsuit included allegations that Medina misappropriated corporate funds for personal use.[8][9][10] U.S. District Court Judge William Osteen, unsealed a class action lawsuit filed by Attorney E. Clarke Dummit against RegisterFly and ICANN on Friday March 16, 2007. The lawsuit alleges that RegisterFly systematically defrauded customers attempting to register or renew Internet domain names. [11] The Class Action has a website www.RegisterFly-Lawsuit.com.

Due to the reported negligence of RegisterFly in protecting its customers, angry calls have arisen for oversight of the Web registry industry.[12] On March 16, 2007, one day after ICANN learned of the Class Action Lawsuit filed by the Dummit Law Firm, ICANN publically announced that Registerfly will cease operating as an ICANN-Accredited Registrar on March 31, 2007.[6] The ICANN officially removed Registerfly's accreditation on March 31, 2007 and ordered Registerfly to cease operation and remove the ICANN logo from Registerfly's website. However, Kevin Medina invoked the arbitration clause in the registrar's accreditation agreeement which allows him to continue to operate as a domain name registrar through an arbitration process laid out in the contract.[13]

Ownership lawsuit

In February 2007 eNom formally severed ties with RegisterFly over continued consumer complaints.[14] John Naruszewicz, a co-owner of RegisterFly, filed suit against his partner, CEO Kevin Medina (they each own 50% of the company).[10] Medina was fired by RegisterFly, reportedly over civil liabilities relating to allegations of funds mismanagement[15] but Medina and Naruszewicz continued to dispute legal control over the company.[16][17] Meanwhile RegisterFly filed suit against Kevin Medina, alleging he had stolen company funds for a $27,000 escort service, a $6,000 liposuction procedure, a $10,000/month penthouse apartment in Miami, Florida and a $6,000 chihuahua dog. This alleged misappropriation of funds was said to have caused the company's woes.[18][9][10] Court documents claim over 75,000 customer domain names were forfeited by RegisterFly.com in one month alone because of the company's failure to pay registration fees.[3][16] RegisterFly management also claimed that Medina deleted passwords and access to billing information to prevent the issuing of customer refunds.[19] However, Medinda reportedly accused his ex-lover Naruzewicz of spending $60,000 in company funds on Morrocan furniture and down payments on a Florida home himself.[18]

Website split and court ruling

In early March two competing and visually similar versions of the RegisterFly website were online. Naruszewicz had taken over control of RegisterFly.com and RegisterFly.net was under Medina's management, each through separate service providers. On March 7, 2007, reports emerged that Registerfly.net was effectively a phishing site.[20]. Customers were urged to avoid all business with RegisterFly.net, and immediately, to change their passwords via RegisterFly.com, since even though the websites were separate, Medina still had a duplicate of all account information.

On March 8, 2007, then-CEO John Naruszewicz made an official announcement that having regained control of the website, he would begin rectifying payment problems and recovering lost domains.[21] Later the same day, United States district court Judge Peter Sheridan ordered that legal control of RegisterFly be returned to Medina. After the ruling Medina said, “This decision puts me back in the driver's seat. I believe I have built a lot of customers that will weather the storm.”[22]

Naruszewicz said he would not appeal the judge's ruling and stated, “We lost and it's all over. The company will implode in days and 1 million domain names are going to be lost. It's a damned shame.”[23]

ICANN and customer complaints

ICANN had received many customer complaints about RegisterFly. There were allegations of fraud dating back to 2005, including reports RegisterFly had suspended customer accounts and domain names in retaliation for complaints about overcharging. eNom and ICANN also accused RegisterFly of inappropriately altering clients' WHOIS data. Complaints about RegisterFly were issued by other ICANN-accredited registrars, ICANN board members and the United States Department of Commerce.[16]

On February 22, 2007 ICANN notified RegisterFly they would lose their accreditation as a domain registrar on March 14, 2007 if certain issues were not corrected.[24][25] News sources reported that as of February 19, 2007 RegisterFly had suspended all business contact including e-mail, telephone and fax communications.[26] Meanwhile ICANN was also the subject of criticism over their handling of RegisterFly's problems, with allegations of a “laissez faire attitude toward customer allegations of fraud.”.[27]

ICANN lawsuit and domain restrictions

On March 4, 2007 (a Sunday) ICANN announced it would file suit against RegisterFly in United States federal court the following March 6 for failing to comply with an audit as required by their Registrar Accreditation Agreement (RAA).[28] However, ICANN failed to file any lawsuit after RegisterFly provided ICANN with minimum registrant information. ICANN also convinced several top-level domain registries who administer the .com, .net, .biz and .info namespaces, including VeriSign, NeuStar and Afilias to restrict pending-expiration Registerfly domains into a so-called “Server-Delete-Prohibited” status. ICANN stated, “This will prevent them from being deleted from the registry and becoming available for re-registration by others.”[29]

Termination of ICANN accreditation

On March 16, 2007, ICANN informed Registerfly that it will cease operating as an ICANN-Accredited Registrar on March 31, 2007,[6] and also ordered RegisterFly to immediately cease using the ICANN logo and trademarks on their website.[30]

“Terminating accreditation is the strongest measure ICANN is able to take against RegisterFly under its powers. ICANN has been frustrated and distressed by recent management confusion inside RegisterFly. Completely understand the greater frustration and enormous difficulty that this has created for registrants.” Dr. Paul Twomey, President and CEO of ICANN was quoted as saying.[31] Twomey also called on RegisterFly to immediately initiate a “bulk transfer” (migrating or moving multiple names at one time) of all their domain names to another registrar, to protect the interests of their remaining clients.[30]

Effects on industry due to RegisterFly collapse

In the wake of and in response to RegisterFly's collapse, ICANN is planning to reform the entire domain registration and registrar accreditation process. ICANN currently exerts little control or authority over registrars, but is planning to change this due to their recent failures.[32] President and CEO of ICANN, Dr. Paul Twomey, stated:

What has happened to registrants with RegisterFly.com has made it clear there must be comprehensive review of the registrar accreditation process and the content of the RAA. This is going to be a key debate at our Lisbon meeting scheduled for 26 - 30 March 2007. There must be clear decisions made on changes. As a community we cannot put this off. ICANN introduced competition to the domain name market in 1998. Back then there was one registrar. There are now over 865. That's a good thing because it has made domain names cheaper and offered more choice. But the RAA was designed and signed when the domain name market was much smaller. The market now supports about 70 million generic TLD names and is growing. Registrants suffer most from weaknesses in the RAA and I want to make sure that ICANN's accreditation process and our agreement gives us the ability to respond more strongly and flexibly in the future.[33]

Independent help for customers

For customers of RegisterFly the court ruling was exacerbated by reports that Medina's credit card provider Humboldt was terminating their services.[34] Many customers had learned of these problems only after having failed in routine online attempts to renew or transfer domain names or pay for services via credit card. The support website registerflies.com, which had been set up in 2005 for the purpose of providing independent support and information to disgruntled RegisterFly customers, was providing information on recovering domain names lost by RegisterFly.[35]

RegisterFly was ordered by ICANN to provide its database of registrant information to them, including the owners of domain names and their contact details. ICANN reportedly received the data on March 7 and found that the data was deficient and inaccurate. On April 17, 2007 A Federal judge granted a temporary restraining order to ICANN compelling Registerfly to turn over all registration data and to update it every seven days.[36]

Because of the current operational problems at the RegisterFly website, ProtectFly in many instances can not be turned off, or turning it off has no effect, which has caused customers more difficulties.[37] Valentino Viccetzar, a writer for the web blog Poker Rouge Blog, was reported to have found a 15-step work-around solution for customers.[38]

References

  1. ^ ICANN Blog FAQs for RegisterFly customers, April 3, 2007
  2. ^ The Register, Burke Hansen. Registerfly on the fly, ICANN on the run, February 19, 2007
  3. ^ a b Business Week, Steve Hamm, Allegations Fly at Registerfly, Claims of embezzlement and complaints from irate customers threaten to derail the small domain-name registrar, March 8, 2007
  4. ^ Netcraft news, RegisterFly Site Goes Offline, March 6, 2007
  5. ^ Hostsearch news, Netcraft Reports RegisterFly Site Offline, March 8, 2007
  6. ^ a b c Computer Business Review Online, Kevin Murphy; ponders registrar crackdown, March 22, 2007. Cite error: The named reference "ICANN1-announce" was defined multiple times with different content (see the help page).
  7. ^ Computer Business Review Online, Kevin Murphy; Registerfly gets terminated, March 19, 2007
  8. ^ a b The Register, Burke Hansen; ICANN: we can help Registerfly mess, March 14, 2007
  9. ^ a b The Register, Burke Hansen. Registerfly files suit against ousted CEO, February 22, 2007
  10. ^ a b c Computer Business Review Online, Anger and fear as domain firm slowly implodes, February 21, 2007 Cite error: The named reference "CompBusinessReviewOnline2" was defined multiple times with different content (see the help page).
  11. ^ Computer Business Review Online, Kevin Murphy; Class Action Lawsuit Filed Against RegisterFly and ICANN, March 28, 2007
  12. ^ Business Week Online; "How Secure Is Your Domain? Problems at RegisterFly.com shed light on loose oversight of Net addresses", March 26, 2007
  13. ^ ICANN.org ICANN public participation site
  14. ^ RegisterFly Reseller Temination F.A.Q.
  15. ^ RegisterFly, RegisterFly Official Reseller Termination FAQ
  16. ^ a b c Malaysia Sun, Brawling RegisterFly partners in fight to the death, February 24, 2007
  17. ^ The Register, Burke Hansen. ICANN rides to the rescue in Registerfly meltdown, February 23, 2007
  18. ^ a b IT News Australia, Tom Sanders; ICANN pulls Registerfly's licence, March 20, 2007
  19. ^ Ars Technica, Jacqui Cheng Registerfly faces losing ICANN accreditation, February 27, 2007
  20. ^ RegisterFlies News; ACT NOW - Important News Release
  21. ^ RegisterFlies News; Official Registerfly Announcement
  22. ^ Business Week, Steve Hamm and Megan Tucker; Judge Rules for Ousted Registerfly CEO, March 8, 2007
  23. ^ Netcraft News, Rich Miller; Two RegisterFly Sites Online as Ousted CEO Returns, March 12, 2007
  24. ^ Computer Business Review Online, Kevin Murphy. Registrar threatened with ICANN shutdown, February 22, 2007
  25. ^ ICANN, Kurt J. Pritz, Senior Vice President, Services, Notice of Breach of ICANN Registrar Accreditation Agreement, February 21, 2007
  26. ^ Malaysia Sun, Alarm bells ringing over domain registrar, RegisterFly.com, February 19, 2007
  27. ^ The Register, Burke Hansen Of ICANN and the Registerfly meltdown, March 3, 2007
  28. ^ The Register, Burke Hansen, Stiffening at last, ICANN threatens Registerfly with legal action, March 4, 2007
  29. ^ Computer Business Review Online, Kevin Murphy, ICANN locks down at-risk Registerfly domains, March 5, 2007
  30. ^ a b Malaysia Sun, ICANN terminates RegisterFly.com accreditation, March 17, 2007
  31. ^ The Register, Drew Cullen; ICANN terminates RegisterFly with extreme prejudice, March 17, 2007
  32. ^ The Register, Burke Hansen; ICANN speaks out for registrar reform, March 22, 2007.
  33. ^ ICANN.org, "Registrar Accreditation Policy and Process Must be Reviewed," March 21, 2007.
  34. ^ RegisterFlies News; Registerfly is DONE - Get Out!
  35. ^ RegisterFlies; RegisterFlies Latest News
  36. ^ ICANN.org, ICANN announcement April 17, 2007
  37. ^ RegisterFlies Forum; RegisterFly Update March 10 2007 (whole page)
  38. ^ Web Host Directory - Industry News; Poker Blog Finds Loophole in RegisterFly.com's System-May Save over 1 Million Domains
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