It’s about time.

Here’s how their scam works:

ICANN allows a 5-day refund period for registered domains. Anyone can buy a domain, hold it for 5 days, and return it for a total cost of $0.

This policy has been used by legitimate people approximately 0 times, since buying a domain at a well-priced registrar costs about $8 per year (Network Solutions charges $35/year), and you generally don’t buy a domain accidentally.

Meanwhile, it has been used by spammers constantly. One common technique is to automatically register a bunch of random words and misspellings, or recently expired domains, and put ads on each one. During the 5-day refund period, see which domains get enough traffic (mostly from mistyped URLs or old links) to generate more ad profit than their registration cost. Keep those, and get refunds on the under-performers. It’s automated, profitable domain squatting. (This is why all of the good names are taken.)

The other scam is perpetrated by Network Solutions. Here’s how this works:

1. Someone considers buying a domain, so they do a bunch of searches on Network Solutions’ website to see what’s available.
2. Network Solutions immediately buys anything that anyone searches for.
3. When the searcher decides on a name to buy, they try to buy it at a cheaper registrar, but can’t, because Network Solutions owns it already. Network Solutions displays a big page that deceptively convinces users that the only way to get it is to pay their exhorbitant fees. (There’s no mention of the 5-day window, of course.)
4. After 5 days, Network Solutions returns unclaimed domains for a refund.

You can test it yourself:

1. Go to Network Solutions and search for a domain name that’s unlikely to be taken. Mine was networksolutionsdomainscam.com. Sure enough, it’s available!
2. Go to GoDaddy a few seconds later and search for the same domain. Now it’s taken.
3. If you’re a geek, run a whois on the domain. Network Solutions owns it, and there’s a big message in the whois info saying “This Domain is Available - Register it Now at www.NetworkSolutions.com”.

It’s a scam, plain and simple. It’s certainly fraudulent and deceptive, and absolutely nobody in the web business will take pity on Network Solutions for this.