Web hosting company fined for misleading customers at checkout

The owners of crazydomains.com.au, Dreamscape Networks International Pte Ltd, have been fined $56,340 over not declaring free gifts that auto-renew at a cost without making it clear to the customer and not providing advertised security capabilities.

Between October 2019 and July 2023, customers received a website builder free of charge for three months at checkout.

Some customers also purchased a domain privacy product that claimed to hide personal information and prevent hijacking. It was not made clear to customers at the time of purchase that the website builder auto-renews with a fee and the privacy product did not hide contact names or email addresses.

“Accurate information”

Liza Carver from the Australian Competition and Consumer Commission, which issued the fine, said;

“Businesses must provide consumers with accurate information about the products or services they are purchasing. In this case, consumers may have believed they were receiving a free product in addition to the one they were purchasing because they were not given clear information about ongoing subscription costs for these so-called free products. Subscription traps are an area of concerning conduct and the ACCC will not hesitate to take action against businesses that utilise these tactics in breach of the Australian Consumer Law.”

(Image credit: CrazyDomains)

Many web hosting companies have often been accused of questionable sales practices. These include raising base level prices to make discounts look larger, countdown timers that reset when they hit zero, throttling hardware, bait and switch tactics, and offering unlimited resources that provide no real additional value. Although these practices rarely cross the line into being illegal it’s frustrating to customers and it’s nice to see immoral practices being punished.

Not all web hosting companies use these tactics and some, like Krystal, were founded to directly combat these issues. Simon Blackler, Founder and CEO of Krystal says,

“We’ve been calling out these dishonest practices for over 20 years. In fact, Krystal was created in 2002 as an ‘Honest, reliable and personal’ alternative to precisely these kinds of nefarious tactics. Whether it’s ‘renewal shock’, where introductory prices balloon by as much as 250% on renewal, ‘visual interference’, where information is hidden behind asterisks or in pages of terms or through the use of ‘dark patterns’, where the visitor is psychologically manipulated into making a purchase that isn’t in their best interests. Sadly, these practices continue today, and amongst some of the largest hosting companies too. We created our unique Switch Credits initiative to tackle this abusive behaviour and provide victims with the means to move away from those providers without losing any money already spent.”

Finding a web hosting provider that meets your needs isn’t easy, especially when some of them use dubious tactics in an attempt to drive sales. Our experts have tested the best web hosting providers on the market, helping you cut through the noise with concise, transparent advice.