Domain hosters contribute to the rising fraud online


Budde Schou

The number of counterfeit online shops has never been higher, and to combat the problem, domain hosters must take responsibility on a much larger scale.

Last year the Danish non-profit organization e-mærket, working to secure both consumers and businesses through an online certification program, registered more than 260,000 online shops that committed fraud. That is an increase of 17 pct compared to the year before, and back in 2018 the number was at a mere 10,000.

Online fraud is increasing in Denmark and at Budde Schou we have a distinct recommendation on how to better contain the problem.

-We see many online fraud shops with a domain name not necessarily profiting from a specific brand but has been established as a professional site where consumers are tricked to pay for goods that are never dispatched. The more professional fraudsters go a step further and establish shops that profit wholly or partially on a specific brand through their domain name.

– Especially the fraud of a professional kind may sometimes be difficult to do anything about as it is easy for fraudsters to establish a new domain if one domain is shut down. It makes it difficult to legislate the area, and because of this I long for more push from the domain hosters, who do not express interest in solving the problem. Their lacking sense of responsibility and the increase in amount of fraud makes it cost-intensive for the rightsholder, which may hurt their reputation. Thereby the value of their brands is devaluated, which they may have invested a lot of money in to protect and maintain, says our Head of Trademarks, Bjarke Pii Korremann.

The way we see it the heart of the problem lies with inadequate action and responsibility from the domain hosters.

-The problem with some domain hosters is that they remain spectators rather than taking care of the problem. Unfortunately, it is a recurring feature that we see at multiple levels. An example is the American domain giant Cloudflare, which has customers all over the world. They offer a list of services making it attractive to fraudsters to use them, and moreover they do not require verified identification of the customers, which leads to actual anonymity. Finally, they are less likely to remove offensive material compared to other similar providers.

– It is doubtful that they even have an interest in rectifying the problem, and unfortunately the picture is to a greater extend they they simply turn their backs, says Bjarke Pii Korremann.

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