RegisterFly

Industry:	Registrar (Terminated)
Founded:	2003
Country:	USA
Key People
John Naruszewicz Kevin Medina

RegisterFly was a domain name registrar. Its accreditation was terminated by ICANN in 2007 due to massive customer complaints and violations of provisions in the Registrar Accreditation Agreement (RAA). It was formerly operated by co-owners Kevin Medina and John Naruszewicz.

History

RegisterFly was originally started as a reseller for eNom, an ICANN accredited registrar. The company became an ICANN accredited registrar through a "back-door accreditation" after acquiring Top Class Names, a registrar accredited by ICANN in 2004. The new management changed the name of Top Class Names to RegisterFly and assumed the ICANN accreditation and role of its predecessor in 2006. At the time of operation, the company was based in New Jersey. There were more than 2 million registered domain names owned by approximately 900,000 consumers under its management. Some of its registrants included the government of Thailand, the Easter Seals charity and late pop star icon Michael Jackson.

Massive Customer Complaint

ICANN started to receive a multitude of complaints from users regarding RegisterFly's poor service in 2005. Customers complaint's included the company's failure to respond to e-mails and support tickets, more than 30 minutes call hold time, domain name deletion, charging of credit cards two times or more per transaction, and denial of customer access to all their registered domain names once the credit card companies reversed the overcharges. The company also withheld the authorization codes to prevent customers from transferring their domain names to other registrars. Seventy five thousand customers reportedly lost their domain names.

Internal Conflict

According to reports, the company started to crumble after the personal and professional relationship of RegisterFly co-owners Kevin Medina and John Naruszewicz went sour. The two men fought for control of the company in court. Naruszewicz accused Medina of corruption and took over the control of the company. According to him Medina stole money from the company, beginning in mid-2006 ,to pay for two Cadillac Escalades, a penthouse apartment in Miami's South Beach, an escort service, and liposuction. On the other hand, Medina accused Nariszewicz of using fraud to take control of the company.

In March, 2007, Medina was able to prove to the court that he is the only rightful owner of the company bec ause Naruszewicz never paid for his stock. New Jersey District Judge Peter Sheridan ordered Medina's reinstatement as CEO of RegisterFly.

ICANN's Actions Regarding Complaints

ICANN Investigates eNom/RegisterFly Regarding Complaints

In January, 2006, ICANN's Chief Registrar Liaison Tim Cole contacted eNom twice regarding the huge volume of complaints against RegisterFly, which was still acting as a reseller. Cole forwarded the complaints to eNom and reminded the registrar that all domain names registered by RegisterFly under its accreditation are its responsibility. Cole also warned eNom of its possible breach of its registrar accreditation aggreement due to complaints that RegisterFly was intentionally changing the Whois data with inaccurate information. eNom explained that RegisterFly intended to transfer all the domain names under its management to its own supervision. In April, 2006, ICANN communicated with Kevin Medina regarding the continuous complaints that customers were being locked out of their accounts and the disappearance of domain names .Kevin Medina explained to Mike Zupke, ICANN's Registrar Liaison Manager that the problems were cause by "growing pains.

ICANN Requested Documentation and On-Site Audit

ICANN stepped up its investigation and requested documentation from RegisterFly about a complaint that the Whois information of 220 domain names owned by a registrant was changed to reflect Kevin Medina as the registered domain owner . Kevin Medina voluntarily provided incomplete records to ICANN, which required the internet governing body to pressure the registrar until all relevant information was obtained. ICANN also announced that it would conduct an on-site audit to obtain information regarding the issue on May 26, 2006. Medina and Glenn Stansbury, RegisterFly's vice president of operations, met with ICANN Staff regarding the complaints against the company to avoid the on-site audit. They admitted that the staff of the company in the Risk/Fraud department were paid "strictly on commission" but they also promised to work hard to resolve the problems and to improve its customer service.

ICANN Issued Notice of Breach

On February 21, 2007, Kurt Pritz, senior vice president of ICANN issued a notice of breach to RegisterFly. The company had failed to comply with the ICANN Registrar Accreditation Agreement (RAA) after the flood of customer complaints against it. Pritz enumerated the provisions in the RAA which the company violated and gave RegisterFly 15-days to resolve its violations or face termination its accreditation. On March 2, 2007, ICANN issued its second notice of breach to RegisterFly due to its failure to resolve its violations in the RAA and it threatened that company with lawsuit.

ICANN Filed Lawsuit

On March 29,2007, ICANN filed a lawsuit against RegisterFly and asked the court to compel the company to turnover all its registrants data, update it every 48 hours and allow the internet governing body to audit the books of the company. On April 26, 2009, US Federal Court Judge Manuel J. Real ordered the immediate termination of RegisterFly's accreditation and directed RegisterFly to post the termination on its website with the text, "NOTICE TO CONSUMERS: ICANN HAS TERMINATED THIS COMPANY'S ACCREDITATION TO SERVE AS AN INTERNET DOMAIN NAME REGISTRAR. THIS COMPANY MAY NOT REGISTER DOMAIN NAMES. PLEASE SEE www.icann.org FOR FURTHER INFORMATION." Immediately after the court order, ICANN announced its invitation for all interested accredited registrars to submit their proposals to serve as transfer providers and temporarily hold the domain names so that registrants will be able to access their domain names and make the necessary transfers to any ICANN accredited registrar.

GoDaddy Steps In

On March 29, 2007, ICANN announced that GoDaddy would take over the entire 850,000 domain name portfolio. According to ICANN CEO and President Paul Twomey, ICANN had been actively seeking proposals from registrars to provide bulk transfers of RegisterFly's records but it stopped the process because Godaddy's "agreement is a better solution for RegisterFly customers since it's a direct and automatic transfer to a competent and experienced customer service oriented organization."

Class Action Lawsuit

On 23, March 2007, A class action lawsuit was filed against RegisterFly by Anne Martinez, a domain name registrant whose business and finances were affected by the fiasco. ICANN and eNom were also included in the lawsuit. Ms. Martinez ,through the Dummit Law Firm, requested a Temporary Restraining order (TRO) against RegisterFly. The court rejected Martinez request because ICANN was already granted a TRO and had obtained all the necessary data to protect all RegisterFly customers including Martinez. After the court ruling, Martinez opened her case to the public to gain support from other customers affected by RegisterFly's mismanagement. On February 6, 2009, a default judgement was granted by U.S. District Court Judge James Beaty of the Middle District of North Carolina in favor of Martinez. The judge ordered Hosting Services Group, Inc., Kevin Medina, Registerfly, Inc., and Unified Names, Inc. to pay trebled damages and attorney's fees.

Community Reaction and ICANN Contractual Compliance Audits

In the wake of ICANN's proceedings against RegisterFly, ICANN CEO Paul Twomey announced that ICANN needed to increase ICANN's ability to monitor and enforce compliance with ICANN's Registrar Accreditation Agreement and Registry Agreements. ICANN org noted that the lack of intermediate enforcement mechanisms impacted its ability to respond to consumer complaints.

Shortly after Twomey's announcement, ICANN's Contractual Compliance department announced that it intended to initiate compliance audits for both registries and registrars.