The Coalition Against Domain Name Abuse (CADNA) today offered its first press release, in which it announced the launch of its national campaign against internet fraud. CADNA is a non-profit organisation, based in Washington DC. Its primary goal is to combat the practice of cybersquatting – the fraudulent registration of a domain name which some argue threatens the future of ecommerce.

Cybersquatting is a growing problem, and, CADNA thinks, a sorely underestimated one. According to one source, cybersquatting practices have risen by nearly 250% in the last year.

Cybersquatters are increasingly taking advantage of a loophole in the Domain Registration process, whereby registrants are given a five day grace period to cancel their registration if they decide they don't want the domain name. The grace period was originally introduced when Domain Names were far more expensive than they are now, to allow those who might have made a spelling error when they registered their domain to get a full refund.

Unfortunately, in a practice known as "domain tasting", many cybersquatters are registering domains for a few days, testing the traffic to these sites using pay-per-click advertising (and making a profit too), before giving back the domain name and receiving a full refund. Some even "kite" their domain names, continually cancelling and re-registering their domain names to enjoy a permanent cost-free registration grace period.

According to CADNA, cybersquatting and related practices are bringing in US$100-250million in annual revenue for criminals and profiteers, and costing brand owners over US$1billion a year, because of diverted sales and loss of consumer trust. Internet fraud is also costing consumers, who are susceptible to the fraudulent activities of phishing sites and other online fraud practices. Cybersquatting domains could help to persuade consumers to buy fake goods, including potentially harmful counterfeit drugs), or give away personal details such as addresses and credit card details. Unsolicited spyware and other malware might also be a result of a visit to a fraudulent website.

CADNA intends to combat cybersquatting by making these practices difficult to establish, and expensive to maintain. It wishes to increase the penalties for cybersquatting and online fraud, and to introduce an international anti-cybersquatting treaty in collaboration with the World Intellectual Property Organisation (WIPO). CADNA also intends to put pressure on ICANN to get rid of the troublesome grace period which allows domain tasting and kiting to take place, and to take an active role in punishing domain name abuses by registrars and registrants alike.

"The countermeasures available to brand owners are too slow and ineffective to respond to this trend and often too late to prevent damage to the brands and consumers," said Martin Sutton, Manager of Fraud Risk & Intelligence at HSBC Holdings plc. "CADNA brings together brand owners that are concerned with the lack of preventative measures in place to deter these cybersquatting activities and want to make effective changes in order to safeguard their IP and protect consumers."

Members of CADNA include Yahoo!, Verizon, Hilton, Dell and Marriott. "Our 10 charter members alone spend millions of dollars annually to combat cybersquatting," said Josh Bourne, President of CADNA. CADNA welcomes brand owners to join its fight against brand dilution, fraud and extortion, and the threats to consumers that cybersquatting poses.