Domain Name Registrar Network Solutions Settles FTC Charges

Web.com Group, Inc., which owns domain name registrar and hosting provider, Network Solutions, disclosed on August 1, 2014, in a SEC 10-Q filing, a pending FTC investigation:

"The Federal Trade Commission ("FTC") is investigating the methods by which Network Solutions has marketed its domain name and web hosting services to customers. The Company is cooperating with the FTC investigation. The Company has responded to an FTC Civil Investigative Demand and is responding to additional FTC information requests. The FTC investigation could conclude with a variety of outcomes, including the closing of the inquiry with no action, an order regarding our marketing practices, or a payment to the government or to customers." (emphasis added)

The FTC has now announced this week a settlement with Network Solutions--

From the Federal Trade Commission (FTC) Washington, D.C. (press release)--FTC Obtains Settlement From Network Solutions LLC for Misleading Consumers About Refunds--

"Network Solutions LLC has agreed to settle Federal Trade Commission charges that it misled consumers who bought its web hosting services by promising a full refund if they canceled within 30 days. In reality, the company withheld substantial cancellation fees from most refunds.

"In an administrative complaint, the FTC alleged that Network Solutions, a domain name registrar and web hosting provider, offered web hosting packages with a “30 Day Money Back Guarantee,” but did not adequately disclose that it withheld part of the refund – up to 30 percent – from customers who cancelled within 30 days of buying an annual or multi-year package and registering an included domain name.

"The proposed settlement order prohibits Network Solutions from failing to clearly disclose, before obtaining a customer’s billing information, the material terms of any money-back guarantee, or failing to refund the full purchase price in response to a request that complies with the terms of a guarantee. The settlement also bars the company from misrepresenting material terms of any refund or cancellation policy or money-back guarantee, or any other material fact about web hosting.

"The FTC acknowledges the assistance of the Better Business Bureau serving Metro Washington DC & Eastern Pennsylvania in this case.

"The Commission vote to issue an administrative complaint and accept the proposed consent agreement for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through May 7, 2015, after which the Commission will decide whether to issue the order on a final basis. Interested parties can submit written comments electronically."

Federal Trade Commission
Title: Proposed Consent Agreement and Request for Public Comments
Subject Category: In the Matter of Network Solutions, LLC; File No 132 3084
Published: Date To Be Added
Comments Due: Thursday, May 7, 2015

Invitation To Comment:
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The Federal Register Notice includes an Analysis to Aid Public Comment that describes both the allegations in the proposed draft complaint and the terms of the consent order - embodied in the consent agreement - that would settle these allegations. Interested parties are invited to submit written comments on the issues.... (emphasis added; read more and submit comment at the Federal Trade Commission website.)

Case Timeline - April 7, 2015: