Domain Squatting: How it Can Affect Your Business

Domain squatting is a term used to describe a company or business that illegally takes over a domain name by exchanging it or registering it when it comes up for renewal. This often happens when someone forgets to renew the registration of their domain, so be aware of what can happen, and ensure you renew it before it expires.

When domain squatters take over yourn domain, they profit from the existing domain’s reputation, branding, or trademark. This scam is usually aimed at well-known businesses or ‘green’ startups.

Domain squatters acquire these domains for one reason: to sell them back to their original owners at a much higher price or to entice businesses to buy these domains at exorbitant costs. As you can imagine, this entire ‘squatting’ scenario affects the website’s integrity and authenticity. Affected websites are likely to lose customers and their reputation when squatters deceive their customers. This is why you need to be aware of domain squatting and the devastating effects it causes a business.

Here, we offer some helpful advice on how to prevent this from happening and suggest how to secure your site so that it won’t be affected this way.

What Domain Squatting Means

Domain squatting reared its ugly head shortly before the start of the 21^st century, when the digital boom was at its height. As the internet had expanded so fast, there was a huge demand for domain names, and people started registering names that resembled famous companies, hoping businesses would pay a premium for these names. This scam has continued, making website owners far more security-conscious. Two-factor authentication (2FA) and other security measures are regularly used to deter domain squatting.

A popular ploy domain squatters use is creating a false website with a similar domain name; this site is an exact copy of the original brand. Customers can get confused and divulge personal data, like payment details, to these wily squatters, and this can cause havoc. The company has no choice but to pay a premium fee to the ‘squatters’ for the domain name, so they can secure their site and retrieve their customers.

4 Common Things Domain Squatters Do

These are some of the tricks domain squatters use to hijack or imitate the websites of popular brands:

1. Hijacking a brand: Involves registering a domain using a popular brand name, eg com or epsonprintink.com.
2. Using typos to create a domain: Registering domain names comprising brand names that are slightly altered, for instance, com instead of .com or sansungphones.com.
3. Creating a phishing site: This involves building a website that resembles the original in the hope of stealing information from confused customers.
4. Taking domains hostage: This happens when someone registers a domain and holds the authentic domain owner hostage by demanding huge amounts of money to release the domain to them.

How Domain Squatting Affects a Business

Businesses can lose customers, damage their reputations and spend a fortune righting the wrongs caused by domain squatting. Customers landing on fake sites may think they are authentic, distrust the brand, and then take their business elsewhere. Also, reclaiming one’s website and reputation can cost a fortune.

UK Laws on Domains & Cyber Squatting

In the UK, there are no specific internet domain laws; domain squatting is based on the law of contract. When a business or individual buys a domain name and agrees to the registrar’s terms and conditions for that domain, they agree to the legal terms and conditions. These usually fall under the international dispute resolution policy called the ICANN Uniform Dispute Resolution Policy (UDRP). ICANN introduced this conciliation process to solve domain name disputes.

During the dispute process, the complainant has to show that the following has occurred:

1. The domain name is the same or can be confused with the complainant’s trademarks.
2. The domain name owner has no rights or legitimate interest in the chosen name.
3. The domain name that has been registered is being used in bad faith.

If the court decides there is a breach of intellectual property rights, the domain owner will have to transfer the domain name to the trademark owner and pay all costs and damages.

2 Ways You can Avoid Domain Squatting

1. Register Similar Domains Fast

Once you register a domain, it’s a good idea to register all similar ones immediately. Include those that have hyphens and are mis-spelled.

1. Protect Your Trademarks

After registering your domain, ensure you also register your trademarks. This way, you secure your brand and learn about new domain registrations the moment they happen through services like Trademark Clearinghouse.

What is Domain Protection?

Domain Protection is essential if you wish to prevent domain squatting. It refers to taking the necessary steps to keep your domain safe from people abusing it, using it in bad faith and accessing it without authorisation. To do this, you must:

• Frequently monitor your site to ensure it is safe.
• Use two-factor authentication for users to access your site.
• Manage passwords with care. Don’t give the wrong people any access.
• Protect your domain and trademark legally.

Use Domain Privacy to Further Protect Your Site

When you register a new domain, your registrant will include WHOIS privacy free of charge for all TLDs. This is crucial for domain privacy, as it keeps your personal data private (it replaces data about domain owners on the WHOIS database and uses the host company instead). This way, it hides this personal information from the public, protects you against squatters taking over your new domain, secures your domain and keeps your brand’s integrity intact.

WHOIS not only secures your private information; it also protects your brand against identity theft.

Why Register Your Domain Early?

• The earlier you register your domain, the more likely you are to avoid domain squatters.

Monitor domain registrations constantly to find similar ones as they appear.

• If you buy similar domains to your original one at the same time, this will save you money in the long run.

What to do if You Have a Domain Squatter

1. Try to negotiate:

If you try to settle the issue, the domain squatter may request a high price for the domain. You will need to bargain to lower this price.

1. Reaching an agreement:

You may have to pay more than you want to settle the dispute. But consider what it would cost you if you have to take legal action, and how much you can lose financially while the battle continues.

1. Consider the consequences:

Consider what it will cost you in revenue to protect your brand and your trademark and not change your domain name entirely. Be aware of how squatters operate and exploit companies so you can always be one step ahead.

How to Reclaim Your Domain

Step 1: File a complaint with ICANN

Through ICANN's Uniform Dispute Resolution Policy (UDRP), a company can lodge a complaint against a domain squatter. This is a streamlined process. The company must prove that the squatter has registered their domain ‘in bad faith’. If the UDRP decides in your favour, the domain will be returned to you.

Step 2: Taking legal action

If the UDRP cannot resolve this issue, your company may need to take legal action against a domain squatter. Proving that the squatter registered the domain in bad faith can be a lengthy and expensive process. However, this may be the only way to reclaim your domain. If this is the case, ensure you find an attorney who specialises in intellectual property.

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