RegisterFly
Encyclopedia
RegisterFly was a New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...

 (U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

) based internet hosting and domain name registrar that had their ICANN
ICANN
The Internet Corporation for Assigned Names and Numbers is a non-profit corporation headquartered in Marina del Rey, California, United States, that was created on September 18, 1998, and incorporated on September 30, 1998 to oversee a number of Internet-related tasks previously performed directly...

-accredited status terminated in March 2007.

History

RegisterFly formerly acted as a reseller of the services of eNom
ENom
eNom, Inc. is a domain name registrar and Web hosting company that also sells other products closely tied to domain names, such as SSL certificates, e-mail services, and Website building software...

, but became an accredited registrar in its own right in 2006 through the acquisition of "Top Class Names" sold to the company by Directi with Bhavin Turakhia completing the asset transfer. By February 2007, the company was registrar for approximately 2,000,000 domain names held by about 900,000 customers. Notable clients of RegisterFly included the government of Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...

, the Easter Seals
Easter Seals
Easter Seals is an international charitable organization devoted to providing opportunities for children with physical disabilities. See*Easter Seals *Easter Seals *Easter Seals...

 charity, and pop star Michael Jackson
Michael Jackson
Michael Joseph Jackson was an American recording artist, entertainer, and businessman. Referred to as the King of Pop, or by his initials MJ, Jackson is recognized as the most successful entertainer of all time by Guinness World Records...

. In 2007, ICANN launched an investigation of RegisterFly amid allegations of fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

. No lawsuits were initially filed between the governing domain body and the company; however, there was during this time a lawsuit between the company's two owners, CEO John Naruszewicz and Kevin Medina. RegisterFly's website went offline for a time, causing serious concern amongst registrant customers of RegisterFly.
The incidents and lawsuit that then followed were the result of a feud between RegisterFly co-owners Kevin Medina and John Naruszewicz, who were at once both business and intimate partners. As problems at RegisterFly gained momentum, their ten year long business and romantic relationship abruptly came to an end. The lawsuit between the former partners alleged, among other matters, that Medina misappropriated corporate funds for personal use. However, the court ruled on March 8, 2007, in favor of Medina, stating that Naruszewicz had no ownership over RegisterFly. Medina resumed control over RegisterFly, but not before Naruszewicz published a public apology to customers on the company's web page.

On March 28, 2007, U.S. District Court Judge William Osteen unsealed a class action lawsuit filed by Attorney E. Clarke Dummit against RegisterFly, eNom, and ICANN. The lawsuit alleges that RegisterFly systematically defrauded customers attempting to register or renew Internet domain names.

Due to the reported negligence of RegisterFly in protecting its customers, angry calls have arisen for oversight of the domain registrar industry. On March 16, 2007, ICANN publicly announced that Registerfly will cease operating as an ICANN-Accredited Registrar on March 31, 2007. 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 agreement which allows him to continue to operate as a domain name registrar through an arbitration process laid out in the contract. On April 17, 2007 A Federal judge granted a temporary restraining order to ICANN compelling Registerfly to turn over all registration data within 48 hours and to update it every seven days. Medina failed to do so, and ICANN was granted a civil contempt order against Registerfly on May 9, 2007, compelling Registerfly to comply with the preliminary injunction. Because Kevin Medina failed to show up for the hearings, the judge issued a show cause why Medina should not be found personally in contempt of court on May 16 and ordered another hearing for May 25, 2007. Kevin Medina appeared in court on May 25, 2007, and was found personally in contempt for not complying with the previous orders. The temporary restraining order was made permanent. He was given 48 hours to post a notice on his website stating that Registerfly's accreditation had been terminated, and until June 1, 2007 to give ICANN all registrant data. Registerfly could be fined $5,000 USD a day for failure to do so. Registerfly initially posted the required ICANN notice in the help section of their website; however, the notice did not meet all of the order's requirements, especially as to placement on the top one-third of every page in a fourteen-point bold typeface. RegisterFly has since printed the required notice on its home page.

Apparent attempts to circumvent the court order

On February 2, 2008 the domain regfly.com was registered. The RegFly logo and web site is identical to those of RegisterFly except for the different name itself.

The company appears to be experimenting with varying configurations for the old registerfly.com domain. At times the registerfly.com domain redirects to regfly.com. At other times it does not (although the RegFly logo is still displayed). The court-ordered notification is not displayed at regfly.com. At times the notice is not displayed at registerfly.com, which is a violation of the court order. RegisterFly's website is now completely offline.

Ownership lawsuit

In February 2007 eNom
ENom
eNom, Inc. is a domain name registrar and Web hosting company that also sells other products closely tied to domain names, such as SSL certificates, e-mail services, and Website building software...

 formally severed ties with RegisterFly over continued consumer complaints. John Naruszewicz, a co-owner of RegisterFly, filed suit against his business partner, CEO Kevin Medina (they each were thought to have owned 50% of the company). Medina was fired by RegisterFly, reportedly over civil liabilities relating to allegations of funds mismanagement but Medina and Naruszewicz continued to dispute legal control over the company. Meanwhile RegisterFly filed suit against Kevin Medina, alleging he had stolen company funds for a $27,000 male escort service, a $6,000 liposuction
Liposuction
Liposuction, also known as lipoplasty , liposculpture suction lipectomy or simply lipo is a cosmetic surgery operation that removes fat from many different sites on the human body...

 procedure, a $10,000/month penthouse apartment in Miami, Florida
Miami, Florida
Miami is a city located on the Atlantic coast in southeastern Florida and the county seat of Miami-Dade County, the most populous county in Florida and the eighth-most populous county in the United States with a population of 2,500,625...

 and a $6,000 chihuahua
Chihuahua (dog)
The ' is the smallest breed of dog and is so named for the state of Chihuahua in Mexico. Chihuahuas come in a wide variety of sizes, head shapes, colors and coat lengths.-History:...

 dog. This alleged misappropriation of funds, along with Medina's lavish spending, was said to have caused the company's woes. 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. RegisterFly management also claimed that Medina deleted passwords and access to billing system information to prevent the issuing of customer refunds. However, Medina reportedly accused his ex-lover Naruzewicz of spending $60,000 in company funds on Morrocan
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...

 furniture for the Corporate office.

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 set up by and under Medina's management, each through separate service providers. On March 7, 2007, reports emerged that Registerfly.net was effectively a phishing
Phishing
Phishing is a way of attempting to acquire information such as usernames, passwords, and credit card details by masquerading as a trustworthy entity in an electronic communication. Communications purporting to be from popular social web sites, auction sites, online payment processors or IT...

 site gathering credit card sales but not providing a product or service.. 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. Later the same day, United States district court
United States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...

 Judge Peter Sheridan ordered that legal control of RegisterFly be returned to an official ownership state as of Dec. 17 2006, when, at this time it was discovered that Medina never correctly filed proper ownership agreements and they were being drawn up and discussed. This ruling essentially allowed Naruszewicz to forfeit any claim to Registerfly with Medina being the sole owner and fully responsible for all company affairs. 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.” Without Naruszewicz at the helm, all Registerfly employees tendered their resignation on the same day as Medina's court victory. This was one of the final nails in the coffin for this company.

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.”

ICANN and customer complaints

ICANN had received many customer complaints about RegisterFly. There were allegations of fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

 dating back to 2004, including reports RegisterFly had suspended customer accounts and domain names in retaliation for complaints about overcharging. Kevin Medina also reportedly used the fake alias of "Tim Shor". eNom and ICANN also accused RegisterFly of inappropriately altering clients' WHOIS
WHOIS
WHOIS is a query and response protocol that is widely used for querying databases that store the registered users or assignees of an Internet resource, such as a domain name, an IP address block, or an autonomous system, but is also used for a wider range of other information. The protocol stores...

 data. Complaints about RegisterFly were issued by other ICANN-accredited registrars, ICANN board members and the United States Department of Commerce
United States Department of Commerce
The United States Department of Commerce is the Cabinet department of the United States government concerned with promoting economic growth. It was originally created as the United States Department of Commerce and Labor on February 14, 1903...

.

On February 22, 2007 ICANN notified RegisterFly they would lose their accreditation as a domain registrar if certain issues were not corrected. News sources reported that as of February 19, 2007 RegisterFly had suspended all business contact including e-mail, telephone and fax communications. 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
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

”.

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). However, ICANN deferred the suit after RegisterFly provided ICANN with minimum registrant information. ICANN also convinced several top-level domain registries who administer the .com
.com
The domain name com is a generic top-level domain in the Domain Name System of the Internet. Its name is derived from commercial, indicating its original intended purpose for domains registered by commercial organizations...

, .net
.net
The domain name net is a generic top-level domain used in the Domain Name System of the Internet. The name is derived from network, indicating its originally intended purpose for organizations involved in networking technologies, such as Internet service providers and other infrastructure companies...

, .biz
.biz
biz is a generic top-level domain in the Domain Name System of the Internet. It is intended for registration of domains to be used by businesses...

 and .info
.info
The domain name info is a generic top-level domain in the Domain Name System of the Internet, The name is derived from information indicating that the domain is intended for informative Internet resources, although registration requirements do not prescribe any theme orientation.The info TLD was...

 namespaces, including VeriSign
VeriSign
Verisign, Inc. is an American company based in Dulles, Virginia that operates a diverse array of network infrastructure, including two of the Internet's thirteen root nameservers, the authoritative registry for the .com, .net, and .name generic top-level domains and the .cc and .tv country-code...

, NeuStar
NeuStar
Neustar, Inc. is a provider of clearinghouse and directory services to the global communications and Internet industries.-History:Neustar was incorporated in Delaware in 1998. It started as a business unit within Lockheed Martin Corporation...

 and Afilias
Afilias
Afilias Limited is the registry operator of the .info and .mobi Top-level domain, and the service provider of the .org generic top-level domain , .asia TLD catering to the Asia, Australia, and Pacific regions, .aero Airline and Aviation Industry TLD, and a provider of domain name registry services...

 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.”

.be domains

In 2005...2006, RegisterFly was the main registrar of .be domains (Belgium). This is due to various promotional zero-dollar offers for .be domains by RegisterFly during 2005 and probably until late 2006. A significant part of the RegisterFly domain data base included .be domains. While the exact number can not be specified at this time, the number is supposed to be between 100 000 and 300 000 .be domains. When customers tried to renew such domains, the money was drawn from their credit card but domain renewal did not take place. So in their RegisterFly customer account, their domain was marked as renewed, while the Belgium organisation for these domains - equivalent to ICANN - had already made them available for new domain registrants. The Belgian ICANN equivalent refused to apply to these domains the status “Server-Delete-Prohibited”. This refusal was the answer for the corresponding request for various .be domains, for example for the domain notenverga.be ("rating...", related to the Geŕman site http://vox7.com = rating of election candidates.) - Source: infos7.com - So while ICANN coordinated some kind of protection, the registrants of .be domain had the risk to definitely lose their domains in case of some marketing value (high visitor frequence) to domain hunters. - The Registerfly case also demonstrates the need to regulate a generalized better protection of ownership for all national domains.

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, and also ordered RegisterFly to immediately cease using the ICANN logo and trademarks on their website.

“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
Paul Twomey
Paul Twomey was the Chief Executive Officer and President of the Internet Corporation for Assigned Names and Numbers from March 2003 to June 2009...

, President and CEO of ICANN was quoted as saying. 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.

On April 27, a US Judge ruled that ICANN could terminate RegisterFly's accreditation immediately.

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. President and CEO of ICANN, Dr. Paul Twomey, stated:

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. 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. Also, they have called for domain name registrants to contact the Florida attorney general.

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.

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. Valentino Viccetzar, a writer for the web blog
Blog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...

 Poker Rouge Blog, was reported to have found a 15-step work-around solution for customers. This technique became known as the 'poker push', but in many instances failed to work, and customers were forced to try and find remedies with Registerfly.

Customers continued to report that they were unable to get support through the Registerfly support system as their telephone support involved multiple hour wait times, support tickets were ignored or deleted, and that emails went unaswered. A few customers were able to resolve problems. However, sometime in the middle of May 2007 the Registerfly support telephone numbers were disconnected.

There is no way for disenfranchised customers to recover funds remaining in their accounts. As of April 2, 2008, customer support states "We do not refund quick checkout balances... This policy is without exception."

Portfolio buyout

On May 29, 2007 Go Daddy
Go Daddy
Go Daddy is an Internet domain registrar and Web hosting company that also sells e-business related software and services. In 2010, it reached more than 45 million domain names under management. Go Daddy is currently the largest ICANN-accredited registrar in the world, and is four times the size of...

, announced that through an agreement with RegisterFly, it was taking over the entire portfolio of more than 855,000 generic top-level domain (gTLD) names held by RegisterFly. The names would move to newly created accounts at GoDaddy, and they would notify Registerfly customers by email. GoDaddy and ICANN will not release terms of the agreement but have said that GoDaddy is not buying Registerfly. ICANN plans to continue legal action against Registerfly for its continued noncompliance of the court ordered injunction.

Bankruptcy Hearings

A hearing in Newark, New Jersey in December 2007 discussed that the company would be executing what is known as an “assignment for the benefit of creditors.” This is usually a state-court equivalent to a bankruptcy case in which a companies assets are gathered by a third-party, liquidated, then distributed to the company’s creditors in proportion with companies debt to each of the creditors.

External links


  • "Registerfly and the ICANN Office of the Ombudsman" by ICANN ombudsman
    Ombudsman
    An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests...

     on ICANN.org, the authority on the 2007 RegisterFly situation.
  • RegisterFly search results at ICANN
    ICANN
    The Internet Corporation for Assigned Names and Numbers is a non-profit corporation headquartered in Marina del Rey, California, United States, that was created on September 18, 1998, and incorporated on September 30, 1998 to oversee a number of Internet-related tasks previously performed directly...

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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