Verisign and the Federal Trade Commission have reached a settlement stemming from charges that Verisign’s Network Solutions unit, the largest domain name registrar, tricked customers of competing domain name registrars into renewing and transferring their domain name with Network Solutions.The FTC action grew out of series of private class actions first filed in California state court on May 28, 2002. Luxenberg v. Verisign, Inc. et al, No. BC274342 (Cal. Jan. 8, 2003). Both the class actions and the FTC charges relate to notices Verisign sent to customers who had registered a domain name with other domain name registrars. In the notice, Verisign misled registrants by stating their registration was nearing expiration and provided paperwork for renewal at a fee. In some instances, registrants were years away from their expiration date. Registrants were also unaware that their domain name would be transferred from their current domain name registrar to Verisign’s Network Solutions.
In the settlement, Verisign agreed to provide the expiration date of the registrant’s domain name registration in all its future notices and to disclose whether renewal would transfer a registrant’s domain name from its previous registrar to Verisign. The order also required Verisign to pay consumer redress in accordance with a class action lawsuit it recently settled. Affected registrants can opt for a free year of domain name registration under Verisign or a 29 dollar refund and transfer back to their former registrant name. Verisign did not make any admissions of liability or wrongdoing.
FTC v. Network Solutions, Inc., No. 03-1907 (D.D.C., Sept. 12, 2003).