Domain name industry overseer ICANN is today expected to take ‘decisive action’ to help protect the approximately 900,000 domains that customers of scandal-ridden registrar Registerfly.com believe are in danger of being lost.
The ICANN move, whatever it may be, will be merely the latest stage in a strange tale that involves allegations of Registerfly executive corruption, high-class escorts, liposuction, borderline suicidal customers, and a $6,000 chihuahua.
Registerfly customers yesterday continued their attempt to abandon the company in droves over fears they could lose their domain names, and in some cases their livelihoods.
Months of shoddy customer support culminated in panic on Monday as Registerfly’s web site went dark for most of the day.
According to the web site Registerflies.com, operated by a disgruntled former customer, staff at Registerfly were this week forced to reboot their whole system and change root passwords after being locked out by deposed chief executive Kevin Medina.
This followed a dispute between Medina and Registerfly vice president John Naruszewicz, who each own 50% of the company. Naruszewicz claims Medina has been misusing the company’s money to support his lavish lifestyle, depriving customers of paid-for domain names.
After being unable to force Medina to sell his half of the company, Naruszewicz sued him on February 12, claiming he had used company funds to pay for his $10,000-a-month Miami Beach penthouse, a $9,000 escort, and $6,000 worth of liposuction.
He also, one source said, is believed to have spent $6,000 of company money on a chihuahua.
The lawsuit further alleged that Medina’s extravagances had cleaned out the company’s bank account, causing its base of domain names to fall from 200,000 at the end of December to 125,000 last week, because Registerfly didn’t have the cash to pay the registries for renewals.
New Jersey District Judge Peter Sheridan handed down a preliminary injunction on February 15, preventing Medina from accessing any Registerfly corporate funds.
Naruszewicz and Medina could not be reached for comment yesterday. Naruszewicz’s attorney did not respond to a request for comment.
One source familiar with the situation, who asked not to be named for fear of reprisals, claimed that the company’s problems stemmed from the fact that Medina operated much of the business manually, and other staff members did not have access to all the systems.
The problem with Registerfly was the way Kevin ran the operation — he was in control of all the technology, all data, all support tickets, he did not relinquish control to employees, the source said.
The effect on customers has been anger, frustration and fear.
For months, the forums at Registerflies.com have been filling up with horror stories about Registerfly double, triple or quadruple-billing for domain name renewals that nevertheless end up expiring and being resold to other people.
Nowadays, when an old domain name expires it is invariably snapped up by traffic speculators or domain monetization firms, which may ask a large fee for its return.
One complainant said he had been billed $13,000 for domain renewals, and expected to lose control over them anyway, having failed to get support from the company. He expressed suicidal thoughts.
I am about to lose 476 domains with registerfly, he wrote. In the batch of domains I am about to lose is my bread and butter domains that put food in my family’s mouthes and roofs over my employees heads… You know for a few minuts there I could relate with the people that take their own lives.
Bizarrely, while Registerfly evidently undergoes an internal coup d’etat, Registerflies, the web site set up to criticize the company, has evolved into an informal support channel, acting as an intermediary between disgruntled customers and the company’s remaining staff, with Registerfly’s implicit consent.
Customers are obviously livid, and many have been criticizing ICANN, the Internet Corp for Assigned Names and Numbers, for not doing anything to help them.
ICANN’s independent ombudsman Frank Fowlie said last week that 70% of the complaints he has received over the last few weeks have been related to Registerfly. Unfortunately, he has no powers over registrars, he said, deferring customers to ICANN registrar liaison Mike Zupke.
ICANN itself has been silent, but Paul Levins, its vice president of corporate affairs, told us yesterday that the organization has been talking with Registerfly behind the scenes for a time.
We’ve reached the point today where we’ve decided to make some very decisive action, he said, declining to elaborate. We’re proceeding swiftly to protect the interests of people who have the 900,000 names registered.
It’s not yet clear what ICANN can do or intends to do. Its powers over registrars are limited to enforcing the registrar accreditation agreement that every company has to sign if they want to sell domain names.
There’s a lot more to this story that has yet to come out.
For example, it’s not yet clear what influence eNom Inc, a registrar owned by Demand Media Inc, a domain monetization firm, had on the scandal, if any.
While Registerfly is now ICANN-accredited, it started life as an eNom reseller, and many of its registered domains are technically registered with eNom. eNom recently terminated the reseller deal due to the customer complaints, and it is due to expire in early March. A company executive did not respond to requests for comment yesterday.