Quoting Koustubha Kale koustubha_kale@yahoo.com:
Dangerous. Its as if the the guys controlling the domain can effectively cyber squat his own customer. Has anyone faced such a situaltion?
yes, and went through hell un-squatting him. Finally had to pay him off (could have gone to court but the delay would have killed me)
Did you have to pay off the Domain Registrar or some squatter who had registered the domain?
i had registered the domain through the guy who was doing the hosting. and he refused to hand over the domain when i wanted to change my host. He had made himself both owner and tech support (this was back in around 96 when we had to pay in USD for domains) He was charging me 12000 a year for hosting whereas the going rate had dropped to 2500 or so. Finally I had to pay him 10K and he released the domain.