Re: [ga] registrar payment practices

[Jeff Williams <jwkckid1@xxxxxxxxxxxxx>]

Danny and all,

  Good point's.  What all this really boils down to though is
the "Accreditation" agreements with registrars and registries.


Danny Younger wrote:

> Pleased to see discussion emerging on registrar
> payment practices that impact registrants... the
> following is from today's exchange on the registrars
> list.  Let's hope that registrar discussions leading
> to revisions of the RAA commence sometime soon...
>
> [Connelly]:  Those of us who were on the ill fated
> "Code of Conduct Task Force" felt that there should be
> a requirement that registrars taking multi year
> registrations should pay the registry immediately for
> the full registration paid for by the registrant.
>
> Over the years, we have had some vigorous debates over
> this issue in the RC meetings.  To me, it was
> analogous  to taking out a "twenty pay year" life
> insurance policy and paying the broker for the first
> ten years -- with the broker paying the insurance
> company a year at a time.
>
> When we had a run of five and ten year fraudulent
> registrations a couple of years ago, I was able to see
> the point of putting through the first year
> registration and waiting long enough for the chances
> of a Chargeback to elapse before paying for the full
> contract.
>
> I can see two incentives for delaying payments beyond
> the chargeback issue,  1. building cash flow and 2.
> the expectation that registry fees would go down with
> time.  I certainly had expected them to do so.  Those
> of us in Core thought the six dollar fee to Verisign
> was very excessive.
>
> However, not only have the registry fees *not* gone
> down (except .net), they have gone up.  In addition, a
> very hefty ICANN fee has been added.  Registrars
> holding back on full payments for multi year
> registrations will be hit with a shortfall at some
> point.  Since the RegisterFly.com problem, we can all
> see the risks of building cash flow by such methods.
> Some day there will be a day of reckoning.
>
> [Jeftovic]:  I'm not up to speed on how much of RFly's
> problems were caused by this specifically (a cashflow
> shortage from pay-as-you-go), as I understood it (from
> having both sides of the company calling me within
> minutes of their domain landing on our nameservers and
> badmouthing the other), the mismanagement went far
> deeper than that issue alone.
>
> As an aside, I am curious what will be revealed to be
> RFly's undoing in the end because I think right now
> there is a a kind of cavalier under-appreciation for
> the gravity of this situation and how badly this will
> play out for the rest of us registrars in the future
> (there *will* be calls for things like government
> intervention, more regulation, the elimination of
> registrars, etc)
>
> We've never been thrilled about this practice
> (pay-as-you-go) because we've been shafted pretty
> badly by it. In one case a registrant paid 3 years at
> another registrar, who remitted to the registry for 1.
> Customer then transferred over to us and started
> calling *us* demanding to know "where my other two
> years are".
>
> He ended up being a freelancer for the largest English
> language computing magazine in India and wrote one
> hell of a hatchet job about our practice of "stealing
> years from our registrants". Luckily, the magazine's
> editor was also a customer and didn't run it (since it
> was completely untrue).
>
> That, and episodes like it left a bad taste in our
> mouth and we ended up automating a mailout to users
> when they transferred over to us from registrars who
> were known to do this instructing them to check their
> years and if any are missing, to go after the OLD
> registrar for their refunds.
>
> The practical result of pay-as-you-go is that you come
> out ahead by frontloading your marketing process (in
> itself, not a big deal) but gets twisted because a
> registrar who provides bad service to the point where
> a customer leaves actually comes out ahead if they do
> so without pushing for a refund. They save the
> registry fee on the subsequent unused years.
>
>
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Regards,

--
Jeffrey A. Williams
Spokesman for INEGroup LLA. - (Over 134k members/stakeholders strong!)
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