The Internet Corporation for Assigned Names and Numbers (ICANN) said that abuses of the five day 'grace period' given to people registering domain names have dropped by 99.7% since it took action last year.
ICANN rules say that a person can cancel the registration of their domain name within five days and receive a full refund. This was used as a loophole by operators who registered millions of domain names, placed ads on them and kept the income from the ads.
They returned most of the domains within five days, keeping only those that had enough traffic generating enough advertising income to pay for the cost of the domain name. Cybersquatters reportedly built automated systems to exploit the grace period.
ICANN has said that since it started charging as little as 20 cents to companies that cancelled large numbers of domain names within the grace period, the practice has all but disappeared.
"In response to community concerns about the excessive use and abuse of the five-day AGP (Add Grace Period), ICANN implemented two measures to address these problems that have resulted in a 99.7% decrease in AGP deletes from June 2008 to April 2009," said an ICANN report.
The organisation said that domain registration companies who deleted 50 domain names a month or whose deletions made up more than 10% of their domain names in a month would pay 20 cents for each deleted domain name.
That sum is low, but the drop off in activity shows that it is high enough to deter the massive-scale deletions that had been occurring.
In April of this year ICANN raised that 20 cent penalty to the full cost of a domain name for a year, $6.75.
ICANN's report showed that deletions fell dramatically in the first weeks of its action, from nearly 18 million per month to around two million per month within two months. Activity dropped to almost no deletions per month from April when the charge was raised to $6.75.
