[ga] Domain Renewal Accounting Loophole Exposed in Verisign Registry

[Danny Younger <dannyyounger@xxxxxxxxx>]

Posted in DomainTools blog:

Domain owners that pay the renewal fee on their domain
after expiration date and then transfer away from
their current registrar are getting fleeced out of a
year of registration. Under the right conditions and
if everything aligns correctly we find that hundreds
of transaction each day are being deprived of a paid
domain year. I confirmed my finds when I found Pat
Kane the Director of Business Operations of Verisign
during the ICANN meeting in Lisbon. No registrar that
I am aware of proactively provides a refund if the
domain owner transfers away within 45 days of the
anniversary of the domain creation and renewed after
the expiration. I asked a few registrars and Elliot
Noss the CEO of Tucows went on the record and said he
would provide a refund when this edge case happened at
Tucows. Mr. Noss doesn?t believe that many domain
owners experience this at his registrar because their
transfer policy allows domain owners to transfer out
after expiration. At a registrar like Godaddy the edge
case may happen a lot, if a registrar blocks the
transfer during the grace period until the domain is
paid for the case will happen more often.

However a lot of registrars do not allow owners to
transfer out after expiration, instead they insist
that the owner renew the domain name because it is
past expiration, after the renewal they will not block
the transfer. But their is a huge problem with this,
Verisign refunds the money to the original registrar
for the renewal if another registrar transfers the
domain away in this window. Verisign implicitly
automatically renews every domain that expires, this
is why the domain stays alive past expiration, it is
up to the current registrar if they want to delete the
domain. The only way Verisign knows if a domain owners
pays is if the registrar doesn?t delete the domain
during the grace period. So if a transfer goes out,
Verisign refunds one year to the old registrar, even
it you paid for it, it is refunded to the old
registrar.

The Verisign accounting system that handles over 75
Million transactions a year has a flaw in it that some
registrars may not understand how it works and
generally don?t issue a refund when they are issued a
refund by Verisign. The special circumstances are as
follows: The domain is past expiration, the owner
renews the domain at the current registrar, the owner
then transfers away with in 45 days of the anniversary
of the creation date.

Do not renew your domain at your old registrar during
the grace period and then transfer out. Instead,
directly transfer out or pay your renewal fee, wait
until day 46 after the old expiration and then
transfer out. You will loose one year of registration
if you pay first then leave.

Verisign could fix the hole by requiring a registrar
to send an explicit renewal command, but the command
doesn?t exist right now.

According to the Official ICANN FAQ at
http://www.icann.org/compliance/faq.html, it says:

My domain name has just expired. Can my registrar
require me to pay for a renewal before I can transfer
to a new registrar?

No. Your new registrar of choice can initiate a
transfer request on an expired domain name once they
receive the required authorization from you.
Expiration or nonrenewal of a domain name is not a
valid reason for denial of a transfer request.

Note that if the registrar has already begun the
deletion process on the domain name and its status
shows it to be within a 30-day Redemption Grace
Period, the name must be .restored. by your current
registrar before it can be transferred.

This loophole most likely exists at other registries
as well because most registries are modeled around
Verisign?s registry. However Verisign has the biggest
marketshare of the other registries and so it could be
costing consumers millions a year.



      
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