A U.S. judge has ordered a Canadian company to stop billing small businesses and other customers for nonexistent domain name registration services, the U.S. Federal Trade Commission said Tuesday.

The Toronto-based Data Business Solutions, doing business as Internet Listing Service, deceptively posed as domain name registrars and sent bogus bills to thousands of U.S. small businesses and nonprofit groups, the FTC alleged. The invoices were for annual "Website address listing" as well as search engine listing.

Many of the businesses and nonprofits believed they would lose their Web site addresses unless they paid the invoice, the FTC said in a press release.

The invoices sent by the company listed the existing domain name of the billed party's Web site or a slight variation on the domain name, such as substituting .org for .com, the FTC said.

Most consumers who received the invoices were led to believe that the defendants were their domain name registrar and that they must pay them to maintain their registrations of domain names. Other customers were induced to pay based on the defendants’ claims that their “search optimization” service would “direct mass traffic” to the customers' sites and that their “proven search engine listing service” will result in “a substantial increase in traffic," the FTC said.

Internet Listing Service has been sending the invoices out since 2004, the FTC said. Customers who paid the invoices did not receive any domain name registration services, and the search optimization service was ineffective and did not increase traffic to the customers’ Web sites, the FTC said in a complaint, filed in U.S. District Court for the Northern District of Illinois, Eastern Division, in May.

The invoices suggested that the defendants had a preexisting business relationship with the customers, the FTC alleged.

Judge Robert Dow Jr. has ordered a halt to the company's claims and frozen the defendants' assets in the U.S., pending trial. The FTC will seek a permanent halt to the scheme and will ask the court to order the company to pay back victimized consumers, the agency said.

The defendants named in the FTC complaint are Data Business Solutions, also doing business as Internet Listing Service, ILS, Ilscorp.net, Domain Listing Service, DLS and Dlscorp.net. Also named were the company's owners, Ari Balabanian, Isaac Benlolo and Kirk Mulveney.