Do you think buying something as simple as a domain name means that industry is free from scams? If you do think again, since everyday hundreds of people get milked out of their money thinking they are going to get a perfect domain name. Granted, fraudulent domain name companies haven't received as much press as 'work-at-home' companies or other businesses of that nature, but they are still just as deviant. The two main ways a domain name company goes about scamming its customers involves either selling the domain name at a ridiculously high price and/or not delivering the domain name as promised.
The typical price of a domain name ranges from being 0 dollars to around $35. However, if a domain name company is shady they could charge a price that is much higher. This fee could range from $300 to over $2,000. And, unlike legitimate web hosting companies that might charge such a fee, domain name companies of a shady vein do not offer other services such as web hosting or marketing assistance. Their sole sale is of the domain name.
The second way fraudulent domain name companies scam people is by not providing a domain name at all. This happens a lot with so-called 'free' domain names, but can also happen with paid ones of any price. The normal turnaround time for domain name forwarding ranges from 1 to 7 days. If this timeframe has passed and a customer has not received a domain name, they probably won't receive one.
What does a person do if they discovered they've been scammed? Well, if they fall for the first scam where they pay hundreds for a domain name, they may not be able to do much, if the company does indeed deliver the domain name. At most they could try to get a refund, but this is a long shot since companies that shady probably won't allow for such things.
On the other hand, if a domain name hasn't been delivered at all, a person can first file a complaint with the Internet Crime Center, (also known as IC3). This organization has a partnership with the FBI and the National White Collar Crime Center. So, if they think a domain name company has acted in a fraudulent manner, they could use these entities to help conduct criminal investigations against them.
Next, the jilted party needs to consider filing a complaint with the Better Business Bureau. Although this organization doesn't have as many legal/governmental ties as the Internet Crime Center, it still has a lot of power. This is because many people turn to the BBB before they decide to do business with a company. By filing a complaint with them, a person that has been scammed could protect others from undergoing these same difficulties.
Finally, there's the option of reporting the fraud to the credit card company or payment processor. If a credit card company determines fraud has occurred, webmasters will at least get their money back. If payment processors such as Paypal think fraud has occurred, they will proceed with freezing the account of the domain name company. When this happens they cannot do further business until they clear up the discrepancy.