Small Businesses Are Having Their Domain Names Taken Hostage

May 2nd, 2019

Image for domain names and TLDs

 

In the world of international business and intrigue, state heads and CEOs manage the risk of key employees being taken hostage. In small business America, the risk of international hostage taking is still present. Rather than losing employees, small businesses are constantly losing their domain names. A domain name is your website address such as HomeCareMarketing.com. Let’s take a moment to consider why this matters and how to prevent it.

How Does Domain Squatting Work?

The bad players taking domain names hostage are called domain squatters. The practice of buying a domain solely for the purpose of reselling it is clearly prohibited by ICANN (the non-profit that manages .com, .net, .org and several other name spaces). However, violating this rule is so common that doing so is an industry. The name pirates know that even small businesses have significant investments around domain names. The domain may be on various forms of print marketing that is already distributed and/or that would be expensive to reprint. The domain name may be performing well with Google, so loss of it can represent an expensive business interruption. Domain squatters typically price their ransom based on two factors. They base their ransom on how much traffic the domain is getting, but they keep the price less than $1,500, which is the minimum cost of filing a complaint with ICANN. Compare this to the normal cost of a .com domain which is around $15 per year.

How Do Businesses Lose Their Domain Names?

Given that a domain name is worth two thousand dollars or more, how can a business just lose it? The scenario is usually that a small business owner thought it would be safer to register the domain name in do-it-yourself (DIY) fashion, with a well-advertised registrar such as GoDaddy. After a few years, the business owner loses contact with GoDaddy. Maybe the business owner changes her email address. Maybe he marks GoDaddy email as spam and stops receiving it. Or maybe, the business owner just gets so many fake renewal notices that when a real renewal notice comes in, it gets deleted or ignored. Finally, the business owner’s credit card on file expires, and the domain name misses an annual renewal. Domain squatters watch for this scenario and usually snatch up domains within 24 hours of their non-renewal.

Methods for Protecting Your Domain Name

  1. Make sure you always have up-to-date email and payment info with your registrar.
  2. Give yourself an annual reminder to manually renew your domain every year, rather than relying strictly on email notifications and automatic renewals.
  3. Consider using a professional service for your domain rather than a DIY website. A DIY website such as GoDaddy, Wix, or VistaPrint will typically email you when your credit card is declining. Loss of domain always involves some failure of the email notification. A professional service such as Brazzell Marketing Agency will typically call before letting your website go down. That personal relationship adds a layer of protection, often at no or lower cost. The DIY websites are bad about promoting introductory prices while hiding the renewal costs that they raise gradually. A well-established .com domain with GoDaddy currently costs $18 per year. Compare that to their introductory cost of $3 per year or Brazzell’s normal cost of $15 per year.  

What to Do If Your Domain Has Been Taken Hostage

If you lose your domain to a squatter, you have three options:

  1. Register a new domain at a normal price and start using that one.
  2. If necessary, pay the domain squatter and be polite. Only do this as a last resort. We don’t want to encourage this parasitic business practice.
  3. File a Uniform Domain Name Dispute. If an arbitrator decides in your favor, the registrar will transfer the domain name to you. The problem with this process is that it can take more than a month. Additionally, the business making a complaint pays the arbitration fees. Those fees range from $1,500 to $5,000.

Let’s Put a Stop to Domain Squatting

What can we as a business community do to encourage a more fair and less parasitic business environment? There are easy solutions.

  1. Let us reject any technical or self-serving definitions and shades of gray for domain squatting. Instead, we adopt the simple definition, “Domain squatting is the practice of holding a domain for the purpose of reselling it.” If someone is selling a domain while not using it for a legitimate business purpose, that’s domain squatting.
  2. Don’t pay domain squatters. File for $1,500 arbitration if you must. Absorb the cost of fighting this parasitic behavior rather than taking the easy road and financing these hostage takers. Use unusual TLDs if the .com you want is not available.
  3. Don’t buy domains from registrars that promote domain squatting. This means don’t buy domains from GoDaddy. You can identify registrars that facilitate domain squatting by searching for available domains. If you see domains listed for hundreds or thousands of dollars, visit some of those high-priced domains. If there is no real website there, the registrar is making itself a marketplace for domain squatting. Places that do not presently make themselves marketplaces for domain squatting: BrazzellMarketing.com, HostGator.com, and BlueHost.com. Each of these currently cost less than GoDaddy for .com renewals. BrazzellMarketing.com offers automatic privacy with domain registration, making it the lowest cost of all these. This is one of those rare instances when doing the socially conscious thing costs less.