Domainz will undergo its 48-hour penalty for breaching registrar terms and conditions starting this morning at 9am.
The Domain Name Commissioner (DNC) Debbie Monahan imposed the sanction, which will mean Domainz is unable to accept new domain name registrations or transfers of existing names for 48 hours, after discovering irregularities in Domainz's name registration process.
Domainz chief executive Derek Locke says he is unsure as to the impact of the sanction at this stage as it has never been done before.
"It's hard to know. There's no question it will have some impact. Financially it won't be huge, but clearly it will impact on us."
Domainz's policy was to register new names only for one month and then extend the registration to the full 12 months once the payment had cleared. The DNC has said problems arose when these new customers transferred to another registrar before Domainz had updated the records. The DNC sanction says:
"In a number of cases, ensuing problems and confusion over double billing were proving burdensome and counter-productive to client customer relations. The incorrect term being recorded on the register was also a breach of the .nz policies and procedures."
However, the DNC also recognised that Domainz had worked hard on the implementation of the shared registry system (SRS) and the competing registrar environment and that there was no "malicious intent" on the part of Domainz.
Monahan said when imposing the sanction that while such breaches must be treated seriously she had no loss of faith in Domainz and the company's new policies complied with the registrars' terms and conditions.