Are you being scammed?

03 June 2010
Almost everyone has been the target of a scam at some stage in their lives.  And many people and businesses are exposed to constant scam attempts.

Domain name scams are on the rise.  So are scams targeting brand owners.  And let's not forget the recent Nigerian bank account scam.

To avoid being scammed, business owners must be on the alert and have systems in place to check the authenticity of all the correspondence they receive.


Domain name scams

Domain names provide a system of easy to remember internet addresses.  These addresses are translated by the Domain Name System into numerical addresses, also called internet protocol (IP), addresses, which are used by the network.

Business owners can be easy prey for fraudsters looking to extract money from them for unsolicited services, such as domain name renewals or domain name registrations. The issue is not unique to New Zealand. Domain name scams work internationally. You could receive a letter, or even a telephone call, from a scammer working in any country around the world.

Domain name holders are currently being targeted by fraudsters seemingly trying to help them get a domain name ahead of another party in either Hong Kong or China.  The target email looks legitimate but it is easy to be fooled, so take care.

It is not uncommon for some businesses to receive several scam letters in a week. And these letters come in many guises. They range from bogus invoice-like letters trying to fool the account payer into paying for an alleged service, to letters that offer a new domain name similar to the businesses existing domain name. Other letters may offer website hosting, redirecting or email services.

Other scams have adopted a more personal touch.  Instead of writing, New Zealand businesses have received telephone calls from the United Kingdom or Spain asking for urgent instructions to register several domain names to prevent third parties from doing so.
Many businesses choose to register many different levels of their name to ensure that all versions lead to their main website so customers can easily find them.  It is this aspect of the domain name system that is exploited in some of the letters sent seeking domain name registrations. The letters sent can look real, so if you are not on the alert you could find yourself either the victim of a scam or the owner of an unnecessary new domain name.

Scammers may also try to dupe you by charging you for a domain name that is very close to your existing one. They hope you won't notice and pay their invoice.  You'd be surprised how often they get away with it!


Trade mark scams

Trade mark scams often target businesses that have applied to register their trade marks overseas. 

An official-looking letter is sent to the brand owner providing accurate information about their brands but asks for money. These letters originate from organisations with names like: TM Worldwide, European Trade Mark Consulting, TM-Collection, Intellectual Property Agency Ltd, and so on.

It is uncommon for a foreign trade mark office to contact a brand owner seeking payment directly from an owner for a brand, unless of course you have applied for registration yourself.  If your international brand protection is coordinated through a local attorney firm, they should be the only firm sending you invoices!


So how do you avoid being scammed?

You can avoid getting caught out by a scam by:

  • managing your domain names through a credible and reliable provider
  • becoming familiar with the domain name registration and renewal process
  • knowing the brands you have and where you have protected them
  • being cautious of correspondence from any business, other than your local attorney firm, that seeks money for your brands
  • setting up good business practices.


Setting up good business practices

A good business practice does not need to be onerous. Consider the following.

Domain names:

  • Read the letter received carefully. Sometimes these letters are poorly written and do not make much sense.  This is a huge clue they are a scam.
  • Keep a record of your domain names.  Know what domain names you have registered, who your registrar is, and when each domain name falls due for renewal.
  • Check all details on any invoice or letter received.
  • Check the rates, terms and conditions on a renewal notice to see if they compare with those offered by your current provider.
  • Check the website address carefully. Scammers often set up fake websites with similar addresses.
  • Assign one person in the business to be responsible for making any payments for domain names.
  • Check the service was ordered and delivered before paying an invoice.

Brands:

  • Familiarise yourself with your portfolio of brands.
  • Work with one local attorney firm to manage your portfolio.
  • Check all details of any invoice or letter received.
  • Assign one person in the business to be responsible for making any payments for brands.

Other steps to take:

Report scams to the above organisations so they can alert others.

If you are not sure whether the letter you have received is legitimate, check it out with your service provider.  But make sure that you check before you pay the invoice or reply to the sender!  Once paid, the fraudster will be off.  And once you reply, it is difficult to stop the flood of further letters you will receive.

Scams are designed to trick you into giving away your money or important information. Don't let them get you.  Be alert to fraudsters.

An edited version of this article was published in NZ Retail magazine, June 2010

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