RegisterFly

Infobox_Company
company_name = RegisterFly
company_
company_type = Private
company_slogan = The Single Source for all of your Internet Presence Needs
foundation = 2000|
location = West Orange, New Jersey
key_people = John Naruszewicz, Kevin Medina
industry = Domain registrar
products = Domain names
homepage = [http://www.registerfly.com/ www.registerfly.com]

RegisterFly is a New Jersey (U.S.) based internet hosting and domain name registrar that had their ICANN-accredited status terminated in March 2007.ICANN Blog [http://blog.icann.org/?p=85 FAQs for RegisterFly customers] , April 3, 2007]

History

RegisterFly formerly acted as a reseller of the services of eNom, but became an accredited registrar in its own right in 2006 through the acquisition of another company.The Register, Burke Hansen. [http://www.theregister.co.uk/2007/03/28/icann_lisbon_lawsuit_registerfly/ ICANN sued by irate RegisterFly customer, as class action rumble begins] , March 28, 2007] By February 2007, the company was registrar for approximately 2,000,000 domain names held by about 900,000 customers.The Register, Burke Hansen. [http://www.theregister.com/2007/02/19/registerfly_angry_customers/ Registerfly on the fly, ICANN on the run] , February 19, 2007] Notable clients of RegisterFly included the government of Thailand, the Easter Seals charity, and pop star Michael Jackson.Business Week, Steve Hamm, [http://www.businessweek.com/technology/content/mar2007/tc20070307_079128.htm?chan=smallbiz_smallbiz+index+page_technology+ Allegations Fly at Registerfly] , "Claims of embezzlement and complaints from irate customers threaten to derail the small domain-name registrar," March 8, 2007] In 2007, ICANN launched an investigation of RegisterFly amid allegations of fraud. 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.Netcraft news, [http://news.netcraft.com/archives/2007/03/06/registerfly_site_goes_offline.html RegisterFly Site Goes Offline] , March 6, 2007] Hostsearch news, [http://www.hostsearch.com/news/registerfly_news_5674.asp Netcraft Reports RegisterFly Site Offline] , March 8, 2007]

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.Computer Business Review Online, Kevin Murphy; [http://www.cbronline.com/article_news.asp?guid=0C3BCAD7-899C-4BDB-BB1A-09A53C95F40AICANN ponders registrar crackdown] , March 22, 2007.] As problems at RegisterFly gained momentum, their ten year long business and romantic relationship abruptly came to an end. Medina claimed that Naruszewicz became "unstable and hostile" upon the end of their relationship, culminating in a business takeover attempt in which Medina was fired from the company and Naruszewicz briefly acted as CEO.Computer Business Review Online, Kevin Murphy; [http://www.cbronline.com/article_news.asp?guid=BD3E79FC-6579-4FD3-B05D-63FB67F72D79 Registerfly gets terminated] , March 19, 2007] The Register, Burke Hansen; [http://www.theregister.co.uk/2007/03/15/registerfly_icann_court_accreditation/ ICANN: we can help Registerfly mess] , March 14, 2007] The lawsuit between the former partners alleged, among other matters, that Medina misappropriated corporate funds for personal use.The Register, Burke Hansen; [http://www.theregister.co.uk/2007/03/15/registerfly_icann_court_accreditation/ ICANN: we can help Registerfly mess] , March 14, 2007] The Register, Burke Hansen. [http://www.theregister.co.uk/2007/02/22/registerfly_ceo_lawsuit/ Registerfly files suit against ousted CEO] , February 22, 2007] Computer Business Review Online, [http://www.cbronline.com/article_news.asp?guid=F4D808F5-530F-4F5B-BECF-F87EA05CBF15 Anger and fear as domain firm slowly implodes] , February 21, 2007] 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.Business Week, Steve Hamm, et.al. [http://www.businessweek.com/technology/content/mar2007/tc20070309_245992.htm Judge Rules for Ousted Registerfly CEO] , March 9, 2007]

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. Computer Business Review Online, Kevin Murphy; [http://www.cbronline.com/article_news.asp?guid=E8EC704A-D6E0-4461-B39F-C75A3EAF40C9 Class Action Lawsuit Filed Against RegisterFly and ICANN] , March 28, 2007]

Due to the reported negligence of RegisterFly in protecting its customers, angry calls have arisen for oversight of the Web registry industry.Business Week Online; [http://www.businessweek.com/magazine/content/07_13/b4027077.htm "How Secure Is Your Domain?"] Problems at RegisterFly.com shed light on loose oversight of Net addresses", March 26, 2007] On March 16, 2007, ICANN publicly announced that Registerfly will cease operating as an ICANN-Accredited Registrar on March 31, 2007.ICANN, [http://icann.org/announcements/announcement-2-16mar07.htm Official ICANN announcement] , March 16, 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. ICANN.org [http://public.icann.org/issues/registerfly/review ICANN public participation site] ] 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. [ICANN.org, [http://www.icann.org/announcements/announcement-17apr07.htm ICANN announcement] April 17, 2007] 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 placemnent on the top one-third of every page in a fourteen-point bold typeface. [ICANN.org, [http://www.icann.org/legal/icann-v-registerfly/icann-v-registerfly-notice-hearing-pi-26apr07.pdf ICANN vs. Registerfly preliminary injunction item 11] ] RegisterFly has since printed the required notice on its home page. RegisterFly.com, [http://www.registerfly.com Home Page, retrieved 5 September 2007] ]

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 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.

Ownership lawsuit

In February 2007 eNom formally severed ties with RegisterFly over continued consumer complaints. [http://registerflies.com/registerfly-reseller-termination-faq-3.html RegisterFly Reseller Temination F.A.Q.] ] John Naruszewicz, a co-owner of RegisterFly, filed suit against his partner, CEO Kevin Medina (they each own 50% of the company).Computer Business Review Online, Kevin Murphy. [http://www.cbronline.com/article_news.asp?guid=F4D808F5-530F-4F5B-BECF-F87EA05CBF15 Anger and fear as domain firm slowly implodes] , February 21, 2007] Medina was fired by RegisterFly, reportedly over civil liabilities relating to allegations of funds mismanagementRegisterFly, [http://registerflies.com/docman/doc_view-5.html RegisterFly Official Reseller Termination FAQ] ] but Medina and Naruszewicz continued to dispute legal control over the company.Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/d805653303cbbba8/id/230159/cs/1/ Brawling RegisterFly partners in fight to the death] , February 24, 2007] The Register, Burke Hansen. [http://www.theregister.co.uk/2007/02/23/icann_registerfly_accreditation/ ICANN rides to the rescue in Registerfly meltdown] , February 23, 2007] Meanwhile RegisterFly filed suit against Kevin Medina, alleging he had stolen company funds for a $27,000 escort service, a $6,000 liposuction procedure, a $10,000/month penthouse apartment in Miami, Florida and a $6,000 chihuahua dog. This alleged misappropriation of funds was said to have caused the company's woes.IT News Australia, Tom Sanders; [http://www.itnews.com.au/newsstory.aspx?CIaNID=48050&src=site-marq ICANN pulls Registerfly's licence] , March 20, 2007] The Register, Burke Hansen. [http://www.theregister.co.uk/2007/02/22/registerfly_ceo_lawsuit/ Registerfly files suit against ousted CEO] , February 22, 2007] Computer Business Review Online, [http://www.cbronline.com/article_news.asp?guid=F4D808F5-530F-4F5B-BECF-F87EA05CBF15 Anger and fear as domain firm slowly implodes] , February 21, 2007] 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.Business Week, Steve Hamm, [http://www.businessweek.com/technology/content/mar2007/tc20070307_079128.htm?chan=smallbiz_smallbiz+index+page_technology+ Allegations Fly at Registerfly] , "Claims of embezzlement and complaints from irate customers threaten to derail the small domain-name registrar," March 8, 2007] Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/d805653303cbbba8/id/230159/cs/1/ Brawling RegisterFly partners in fight to the death] , February 24, 2007] RegisterFly management also claimed that Medina deleted passwords and access to billing information to prevent the issuing of customer refunds.Ars Technica, Jacqui Cheng [http://arstechnica.com/news.ars/post/20070227-8933.html Registerfly faces losing ICANN accreditation] , February 27, 2007] However, Medina reportedly accused his ex-lover Naruzewicz of spending $60,000 in company funds on Morrocan furniture and down payments on a Florida home himself.IT News Australia, Tom Sanders; [http://www.itnews.com.au/newsstory.aspx?CIaNID=48050&src=site-marq ICANN pulls Registerfly's licence] , March 20, 2007]

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 under Medina's management, each through separate service providers. On March 7, 2007, reports emerged that Registerfly.net was effectively a phishing site. [RegisterFlies News; [http://www.registerflies.com/act-now-important-news-release.html ACT NOW - Important News Release] ] . 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. [RegisterFlies News; [http://www.registerflies.com/official-registerfly-announcement.html Official Registerfly Announcement] ] Later the same day, United States district court Judge Peter Sheridan ordered that legal control of RegisterFly be returned to Medina. 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.”Business Week, Steve Hamm and Megan Tucker; [http://www.businessweek.com/technology/content/mar2007/tc20070309_245992.htm?chan=top+news_top+news+index_technology Judge Rules for Ousted Registerfly CEO] , March 8, 2007]

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.”Netcraft News, Rich Miller; [http://news.netcraft.com/archives/2007/03/12/two_registerfly_sites_online_as_ousted_ceo_returns.html Two RegisterFly Sites Online as Ousted CEO Returns] , March 12, 2007]

ICANN and customer complaints

ICANN had received many customer complaints about RegisterFly. There were allegations of fraud dating back to 2005, including reports RegisterFly had suspended customer accounts and domain names in retaliation for complaints about overcharging. eNom and ICANN also accused RegisterFly of inappropriately altering clients' WHOIS data. Complaints about RegisterFly were issued by other ICANN-accredited registrars, ICANN board members and the United States Department of Commerce.Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/d805653303cbbba8/id/230159/cs/1/ Brawling RegisterFly partners in fight to the death] , February 24, 2007]

On February 22, 2007 ICANN notified RegisterFly they would lose their accreditation as a domain registrar if certain issues were not corrected.Computer Business Review Online, Kevin Murphy. [http://www.cbronline.com/article_news.asp?guid=D816B26A-863C-463A-9D3F-977D2B3B7523 Registrar threatened with ICANN shutdown] , February 22, 2007] ICANN, Kurt J. Pritz, Senior Vice President, Services, [http://www.icann.org/correspondence/registerfly-notice-of-breach-21feb07.pdf Notice of Breach of ICANN Registrar Accreditation Agreement] , February 21, 2007] News sources reported that as of February 19, 2007 RegisterFly had suspended all business contact including e-mail, telephone and fax communications.Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/3a8a80d6f705f8cc/id/229050/cs/1/ Alarm bells ringing over domain registrar, RegisterFly.com] , February 19, 2007] 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”.The Register, Burke Hansen [http://www.theregister.co.uk/2007/03/03/icann_registerfly_domain/ Of ICANN and the Registerfly meltdown] , March 3, 2007]

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).The Register, Burke Hansen, [http://www.theregister.co.uk/2007/03/04/icann_sues_registerfly/ Stiffening at last, ICANN threatens Registerfly with legal action] , March 4, 2007] 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, .net, .biz and .info namespaces, including VeriSign, NeuStar and Afilias 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.”Computer Business Review Online, Kevin Murphy, [http://www.cbronline.com/article_news.asp?guid=80D83445-B5D5-47BC-B74D-D70EA124D72B ICANN locks down at-risk Registerfly domains] , March 5, 2007]

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,ICANN, [http://icann.org/announcements/announcement-2-16mar07.htm Official ICANN announcement] , March 16, 2007] and also ordered RegisterFly to immediately cease using the ICANN logo and trademarks on their website.Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/3a8a80d6f705f8cc/id/234887/cs/1/ ICANN terminates RegisterFly.com accreditation] , March 17, 2007]

“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, President and CEO of ICANN was quoted as saying.The Register, Drew Cullen; [http://www.theregister.co.uk/2007/03/17/icann_withdraws_registerfly_accreditation/ ICANN terminates RegisterFly with extreme prejudice] , March 17, 2007] 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.Malaysia Sun, [http://story.malaysiasun.com/index.php/ct/9/cid/3a8a80d6f705f8cc/id/234887/cs/1/ ICANN terminates RegisterFly.com accreditation] , March 17, 2007]

On April 27, a US Judge ruled that ICANN could terminate RegisterFly's accreditation immediately. [ICANN.org, [http://www.icann.org/announcements/announcement-27apr07.htm ICANN announcement] , April 27, 2007]

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:

cquote|What has happened to registrants with RegisterFly.com has made it clear there must be comprehensive review of the registrar accreditation process and the content of the RAA. This is going to be a key debate at our Lisbon meeting scheduled for 26 - 30 March 2007. There must be clear decisions made on changes. As a community we cannot put this off.

ICANN introduced competition to the domain name market in 1998. Back then there was one registrar. There are now over 865. That's a good thing because it has made domain names cheaper and offered more choice. But the RAA was designed and signed when the domain name market was much smaller. The market now supports about 70 million generic TLD names and is growing. Registrants suffer most from weaknesses in the RAA and I want to make sure that ICANN's accreditation process and our agreement gives us the ability to respond more strongly and flexibly in the future.ICANN.org, [http://www.icann.org/announcements/announcement-21mar07.htm "Registrar Accreditation Policy and Process Must be Reviewed,"] March 21, 2007.]

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. [RegisterFlies News; [http://www.registerflies.com/registerfly-is-done-get-out.html Registerfly is DONE - Get Out!] ] 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. [RegisterFlies; [http://www.registerflies.com/latest-news/index.php RegisterFlies Latest News] ]

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. [ICANN.org, [http://www.icann.org/announcements/announcement-17apr07.htm ICANN announcement] April 17, 2007]

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. [RegisterFlies Forum; [http://www.registerflies.com/registerfly-update-march-10-2007.html RegisterFly Update March 10 2007] (whole page)] Valentino Viccetzar, a writer for the web blog "Poker Rouge Blog", was reported to have found a 15-step work-around solution for customers.Web Host Directory - Industry News; [http://www.webhostdir.com/news/articles/shownews.asp?id=19901 Poker Blog Finds Loophole in RegisterFly.com's System-May Save over 1 Million Domains] ] 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. [Registerflies.com forum posts, [http://www.registerflies.com/smf/the-registerfly-debacle/registerfly.html Registerlies.com forums] ]

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, 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 [ [http://www.bobparsons.com/WhyyoucantgetthedomainnameyouwantGoDaddyrescuesRegisterflycustomers.html Hot Points with Go Daddy CEO Bob Parson] ] . 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. [ [https://www.godaddy.com/gdshop/news/release_view.asp?isc=gdm0535a&ci=8863&news%5Fitem%5Fid=94 Go Daddy Press release] May 29, 2007] [ICANN.org [http://blog.icann.org/?p=132 ICANN blog] May 29, 2007] ICANN plans to continue legal action against Registerfly for its continued noncompliance of the court ordered injunction. [Associated Press [http://hosted.ap.org/dynamic/stories/I/INTERNET_NAMES?SITE=AZTUC&SECTION=HOME&TEMPLATE=DEFAULT GoDaddy Agrees to Run Domains in Limbo] May 29, 2007]

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.

References

External links

* [http://www.registerfly.com Official RegisterFly.com website]
* [http://www.registerflies.com Registerflies]
* [http://omblog.icann.org/?p=6 "Registerfly and the ICANN Office of the Ombudsman"] by ICANN ombudsman on ICANN.org, the authority on the 2007 RegisterFly situation.
* [http://gsa.icann.org/search?q=RegisterFly&site=icann&client=icann&proxystylesheet=icann&output=xml_no_dtd RegisterFly search results] at ICANN