A sinister new breed of cybersquatter is using Companies House data to hold UK firms to ransom over their domain names.

Cybersquatters are monitoring new company registrations at Companies House, then registering similar domain names. These domains are then being offered for sale to the companies.

Jon Collins, senior analyst at Bloor Research, said: "Somehow these people are working out which company names have been registered - or are awaiting registration - and are beating the owners to the punch by registering their domain names and trying to sell them to the firms at a profit."

uk.internet.com, part of the vnunet.com network, tracked down one of the victims of this type of cybersquatting: Peter Hodgson, managing director of Peter Hodgson Associates.

Hodgson said he registered his company with Companies House last year, and three days later received a letter offering him the domain name www.peter-hodgson.com.

"After a little checking I found that the domain had been registered only days after the company name," he said. "But the company is in the health and safety sector, and has little need for a domain name, although I was tempted."

A spokesman for Companies House said that it is "definitely possible to get wind of company names as they are registered", adding that one method would be to buy the CD released every month which lists recent company registrations and applications.

David Engel, internet lawyer with Theodore Goddard, said the cybersquatters are acting "totally unlawfully". He pointed out that buying a domain for a company name which you do not own, with the intention of selling it to that company, is unlawful and the victim could get an injunction against the name registrant and have the domain transferred.

However, Engel added that the ruling is based on the companies' trading goodwill, "but new companies haven't built this up yet, making it a potential grey area. Although I would think the cybersquatters would be in more difficulty - you could wait six months, build up goodwill and then go after them".

Has your company been threatened in a similar manner? Email the team at uk.internet.com

First published in uk.internet.com