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A U.S. District Court Judge has ordered a halt to the practices of Canadian operators who allegedly deceptively posed as domain name registrars and sent bogus bills to thousands of U.S. small businesses and nonprofit organizations for their annual “Website Address Listing,” according to the Federal Trade Commission.


Named as defendants were: Data Business Solutions Inc., also doing business as Internet Listing Service Corp.; ILS Corp., Ilscorp.net, Domain Listing Service Corp., DLS Corp., and Dlscorp.net, and its principals, Ari Balabanian, Isaac Benlolo and Kirk Mulveney, according to the FTC.
U.S. District Court judge Robert M. Dow, Jr., in Chicago, ordered a halt to the claims and froze the defendants’ assets held in the U, pending trial, according to the FTC.

The Commission will seek a permanent halt to the scheme and ask the court to order redress.

Many of the businesses and nonprofits believed they would lose their Web site addresses unless they paid the bill, so they paid, according to the Commission.

The FTC further alleged that in most cases the defendants did not provide domain registration services, did not provide the “search optimization” services it claimed to provide, and bilked small businesses and nonprofits out of millions of dollars.

They are based in suburban Toronto, Canada.
Since 2004, ILS has been sending fake invoices to small businesses and others, listing the existing domain name of the consumer’s Web site or a slight variation on the domain name, such as substituting “.org” for “.com,” according to the FTC.

Most consumers who paid the defendants’ invoices did not receive any domain name registration services and that the “search optimization” service was ineffective and did not result in increased traffic to the consumers’ Web sites, charged the Commission.

The FTC also charged that the “invoices” represented that the defendants had a preexisting business relationship with the consumer. The “invoices” also represented that consumers owed money for the continued registration of their Web site names and that the defendants would provide continued registration services for consumers.

This case is on file in U.S District Court in Chicago.