What does it take defeat a domain name squatter seeking $10,000 for a URL?
According to entrepreneur Jessica Ruhfus, founder of Collabosaurus and No.2 Co, the answer is simple: $7, the help of Australia’s domain name authority, and a little bit of know-how.
Taking to Instagram reels last week, Ruhfus said a customer recently emailed her regarding a ‘.com.au’ domain name.
The URL in question was very similar to the No.2 Co domain name that Ruhfus uses for her post-flush toilet drop brand.
Instead of simply alerting Ruhfus to its existence, the customer said they were the domain’s owner. And that they would sell it to Ruhfus for $10,000.
“I did a little looking into it, because I thought, ‘There’s no way I’m paying $10,000,’” Ruhfus said on Instagram.
Speaking to SmartCompany, Ruhfus explained what it’s like to be singled out by a domain name squatter, and the steps other entrepreneurs can take to avoid similar circumstances.
Domain name squatting is the practice of registering website URLs in anticipation of a brand, service, or organisation launching its own website.
When the other brand assesses what URLs are available, and discovers one using its own name is already registered to someone else, the squatter can offer to relinquish the domain name — for a price.
Sometimes, a third party may register a domain name in good faith, and the two parties can come to a fair agreement over who gets to use it.
Ruhfus doesn’t think that happened to her.
“It was quite clear to me that this person had gone and purchased the domain name off the back of seeing the brand, and seeing an opportunity to potentially get the money out of me.”
After hearing the original domain name owner wanted $10,000 for it, and turning down the offer, Ruhfus researched her next steps.
“I was just pissed off to be honest,” she said. “It was ridiculous.”
After investigating online, and diving through Reddit threads, Ruhfus came to the auDA, the low-key but incredibly powerful body that administrates domain names ending with ‘.au’.
Some disputes over a URL can be resolved by contacting that domain’s registrar, allowing business owners to explain why a specific domain name should not be held by a third party.
When those disputes fall over, the auDA has the power to handle complaints itself.
Ruhfus filed an initial complaint to auDA, describing it as a free and relatively easy process.
“You select the reason why you’re making the complaint, and for me, I knew that this person who was squatting on the domain name didn’t have a business that was in any way, shape, or form related to the domain name itself”, she said.
The auDA confirmed receipt of her complaint and contacted Ruhfus several days later.
“I got another email that just said, ‘We’ve reviewed it and agree that it doesn’t meet the standards for registering a ‘.com.au’ domain name.
“And in 14 days, after a 14-day appeal or review period, ‘It will become available automatically on the market again.’”
With its relatively clear-cut finding, auDA’s decision meant Ruhfus could avoid a dispute resolution channel that costs a minimum of $2,000 — itself a vastly cheaper process than hiring legal representation to directly challenge the domain owner.
However, the auDA decision did not mean the URL was guaranteed to change hands to her, Ruhfus said.
With clear relish, Ruhfus said she created a calendar reminder to register the domain in her own name once that 14-day period expired.
In a detail not included in her Instagram reel, she said the squatter contacted her a second time after the auDA reached its decision.
“Within that 14-day period, I then heard from the squatter — not knowing that it was made me who reported it — basically saying, ‘Hi, I’m happy to accept any offer.’
“I’m sure she knew that it was about to not become her property anymore.
“And I just said ‘Oh, thanks, but no thanks’… and then on that 14th day, I was able to just register it with GoDaddy for $7.”
In doing so, Ruhfus said she was able to save herself $9,993, compared to simply paying the initial sum sought by the squatter.
With the domain freshly registered, Ruhfus said she intends to use it simply to direct to her fully-featured No-2.co site.
She also hopes her experience, which has received a flood of comments and inquiries from e-commerce founders who complained of their own cyber-squatting problems, will build awareness among the Australian entrepreneurial community.
Ruhfus recommended using the Who.is lookup tool to establish who is behind a domain name, instead of seeking that information from registrars who may charge you for the privilege.
She also recommended holding trademarks, where possible, allowing business owners to prove another level of rightful ownership over terms used in a domain name.
“Also, just take your time, and don’t kneejerk react to emails that come through like that,” she continued.
“Often, squatters aren’t going to go to great lengths of creating dummy websites, populating the websites, and getting it SEO optimised to freak you out.
“Often, they’re just sitting on empty domains, empty sites that are attached to a domain name or just a domain is available for purchase. Don’t freak out or act rashly.”
Speaking to SmartCompany, Australian Small Business and Family Enterprise Ombudsman Bruce Billson said businesses should seek assistance from auDA in case of a domain name dispute.
But recruiting the services of a digital marketing provider can head off those problems even before they begin, he added.
“More broadly, a good digital marketing provider can help prevent issues like squatting by obtaining and renewing domain names,” Billson said.
Billson’s office has recently published a set of guidelines to help businesses work more effectively with their digital service providers.
Complaints about copycat businesses selling counterfeit or lookalike products may require stronger legal action.
Although bad actors are becoming increasingly sophisticated in their attacks against small businesses, Ruhfus sounds glad that her story is resonating with entrepreneurs, many of whom are facing their own cybersquatting problems.
“Pretty much everyone I hear from has had some sort of similar or related experience, where they’ve heard from someone out of the blue basically theatening them, saying they are sitting on a domain name… most business owners I speak to have had this happen in some way, shape or form.”
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
