I feel that I have an unfair disadvantage towards other hosting companies. I am located in Germany where fraud is illegal. That means if you sell something to somebody you actually need to give it to him/her. In the US that appears to be different. I did some research and found that many US hosts have this in their TOS:

"Engaging in any activity that, in [HOST]'s sole and absolute discretion, disrupts, interferes with or is harmful to (or threatens to disrupt, interfere with, or be harmful to) the Services, [HOST]'s business, operations, reputation, goodwill, customers and/or customer relations, or the ability of [HOST]'s customers to effectively use the services is prohibited."

Let me translate this: "If we say you violated our TOS, then that's true" or in other words: "If we in our sole discretion decide to take away from you what we sold to you then that's ok".

In my country this is called fraud but in the US...no problem. Of course these laws allow the hosts to oversell like crazy. I can easily sell you 10 trillion terrabyte if I - in my sole and absolute discretion - can kick your butt at any time for no reason. In Germany I can not do this. How am I supposed to compete with fraudsters who are supported by their government ?? Why doesn't America have consumer protection laws ???

The US has very strong consumer protection laws. Otherwise, people wouldn't win court cases against McDonalds for the coffee being too hot, even when it was the coffee drinker who spilled the cup on themselves.

Companies are allowed to set up their own terms and conditions, as long as those conditions are not illegal (e.g. "If you don't do this, we'll kill your family.") Consumers have a choice about whether they accept those terms or would prefer to choose another supplier.

Any good consumer should read the terms and conditions and decide if those are acceptable to them before moving forward.

The US has very strong consumer protection laws. Otherwise, people wouldn't win court cases against McDonalds for the coffee being too hot, even when it was the coffee drinker who spilled the cup on themselves.

As far as I know the customer lost this lawsuit.

Companies are allowed to set up their own terms and conditions, as long as those conditions are not illegal (e.g. "If you don't do this, we'll kill your family.") Consumers have a choice about whether they accept those terms or would prefer to choose another supplier.

Well if you make offers but you know nobody is ever going to get it because you at your sole discretion say so then this is called fraud in most countries.

Any good consumer should read the terms and conditions and decide if those are acceptable to them before moving forward.

But the turth is nobody ever reads the TOS and be honest...you don't either !

(e.g. "If you don't do this, we'll kill your family.")

I best remove this from our Terms then..;)

As far as I know the customer lost this lawsuit.
No, the woman actually won this case.

http://lawandhelp.com/q298-2.htm
http://www.hurt911.org/mcdonalds.html

But the truth is nobody ever reads the TOS and be honest...you don't either !
Whether you read them or not makes no difference in the U.S. When you enter into a contract/agreement with a company (whether by signing you name or checking that "I agree" box), you are saying that you agree with their terms and rules.

That being said, if a business promises something and then says "Oh, we can't give you that", you're right - that is blatant fraud. The thing is (and this is why this cycle continues), for the amount of money the average joe loses because his site got suspended for "overuse" - let's say somewhere between $5-$20 USD - it makes no sense financially to retain a lawyer and sue that "company" for their $5-$20. Sure, they could sue for loss of business (but they have to prove it) or mental anguish or something, but it would end up dragging out for years, most likely.

And FYI, that phenomenon in the above paragarph is not limited to U.S. hosting "companies" either ;)

umm do u think it really matters ? we not here to discuss countries :P
sorry no offense to anyone of u ...

You have a very good point here glace, but don't even try to beat sense into an "american" that this is wrong, ethically and in most parts of the world even legally.
I have been visiting these forums from a long time and whenever i have seen a thread about a hosting company kicking out a customer and recently about domain registrars not "letting go" of expired domains, I always see the same reply........."if it is in the TOS then you are screwed".

You are right about overselling. It does not make sense. They offer you 300gb space with 3000gb bandwidth, but if you use even half of it they will throw your butt out of the server. That does not make any sense. In a normal circumstances that is a fraud but in USA it is not as long as he had it in the TOS.

You know what is the worst part. It is still illegal. But nobody sues. Now it is reaching a point where judges also have started believing this outrageous practice.

I would like to point out a case regarding a courier company. The courier company lost a customers package. When he asked for compensation and damages. They showed him the TOS. In that it was clearly mentioned that if the package was lost by the courier company they would liable to damage of only a few dollars(not sure about the exact amount but it was absurdly low). All over the world courier companies have this same line in their Terms and conditions. In my country the damage is approximately 2.5 dollars.

But when a case was filed the court ruled that the courier company was responsible for the package and they should pay not only for the contents but also damages arising out of it. Because for the simple reason that if they are taking money to deliver it then they should take the necessary steps for the security of the package. Or else their staff or anyone along the transit route can rob the package. They will not be responsible as they are not liable. It could lead to deliberate incompetence and courier companies could literally open valuable packages and sell the contents and give the customer 2 dollars as compensation.

The same way how some shop put up a sign saying goods once sold will not be exchanged. But there have been numerous cases where the customers have gone to court and proved that the product was defective and a person cannot sell a defective product and then refuse to take it back just because "he said so in the beginning".

In spite of losing numerous cases, the courier companies still have the Terms/conditions in their TOS. They never remove because 99% of people are fooled by it and they think"oh damn I accepted the TOS so now there is nothing I can do"
The hosting industry too runs on this principle.

Trying doing that with any other product it is is illegal.

The fact is that everyone is doing it so that is why no one wants to oppose it. Others simply argue because they feel it is never going to affect them.

glace,

Maybe you should rephrase the "fraud is illegal" bit. Fraud is illegal whatever country you are in, otherwise it wouldn't be called fraud, because no crime would have been committed in the eyes of the law.

I think that no matter in which country you live, the tos is there to protect the customer and the host. Those hosts who abuse the wording in their tos are not providing customer service.

And I agree that those hosts that advertise excessive amounts of space and bandwidth are in away false advertising because conceivably a website could use a lot of that without exceeding cpu, but it would be extremely difficult.

I think that if your tos is fair and you stick to the intent of the tos, both the host and the customer win.

glace, I share your sentiment with the oversellers, but you can't blame them if you can't cut the mustard in the hosting business. They're not to blame for your inability to build a successful and thriving hosting business. I've been reading your posts of late and you seem to be having problems in the business and you seem to have identified the overseller hosts as being the ones to blame for your problems? Is that correct? I don't meant overstep my mark here, but this is the feeling and frustration I'm reading into your posts of late.

glace, I share your sentiment with the oversellers, but you can't blame them if you can't cut the mustard in the hosting business. They're not to blame for your inability to build a successful and thriving hosting business. I've been reading your posts of late and you seem to be having problems in the business and you seem to have identified the overseller hosts as being the ones to blame for your problems? Is that correct? I don't meant overstep my mark here, but this is the feeling and frustration I'm reading into your posts of late.

The problem is I am making a living off the webhosting and there is nothing else I ever learned to do. I have no qualification etc. for a regular job. Internet stuff is the only thing I did in my life. When I was a teenager and everybody got a job I made programs and did computer stuff and made my money that way and it's been like that ever since.

So it is not really like these oversellers are causing me hughe problems or something...they rather scare me when I am looking at my long term situation. I.e. if it goes on like this what am I going to do in 5 years ? Sell porn ? Drive a taxi ? Rob banks ? No...most likely I will just jump in front of a train then.

The best thing is this crap doesn't even have much of an advantage for them. When they sell 1000 GB someone will sell 2000, so they will sell 3000 etc. You will see - 4 years from now they will sell like 1000 TB or something. And some idiots will buy it. You know people are like this:

I make an "all you can eat for 5 bucks" restaurant and then someone opens next to me and sells "twice as much as you can eat for 5 bucks" and then those idiots think they get a better deal... How can they be that stupid ?

It's a sad fact, but I don't see overselling going away anytime soon. I don't oversell and I hopefully will never have to! :) Those who start out with their own personal websites seek out the cheapest which usually equals overseller. They will soon learn that they are not what they are cracked up to be.

We, as non-oversellers, need to compete in other ways by adding value-added services, great support and customer service, uptimes, etc. Things that most oversellers cannot do.

The best thing is this crap doesn't even have much of an advantage for them. When they sell 1000 GB someone will sell 2000, so they will sell 3000 etc. You will see - 4 years from now they will sell like 1000 TB or something. And some idiots will buy it.
But not every consumer is looking for 1000000 TB of space for $1.99 a year.

Why do you feel like you need to compete with those types of hosts? Do you really want a customer that is only willing to pay you pennies, and then cost you a ton of money in support/abuse/etc time?

IMO, let the over sellers have those customers. I'd rather have 5 customers who are paying me enough to keep my business going than 25 who constantly cause me headaches and make me lose money every month.

If you feel like you are losing customers or potential customers to those types of hosts (not saying you are; just the impression I get from reading your posts), maybe it's time to re-evaluate your target market. Just a thought.

Glace,

While it's certainly not best to ignore your competition, don't attempt to price yourself (or offer insane resources) to compete. The companies that do this will sooner or later be bitten.

Is it possible to survive as an insanely underpriced overseller? Sure, there's companies out there proving it but I can assure you things aren't what they seem for a lot of them. It's easy to grow when you have large amounts of liquidity coming in from annual payments (or in some cases 3-5 years worth of payments to get the "low" price).

You should really find something else to compete based on. You will not be able to win a pricing or resource war with the big guys. In all actuality they'll sell much below cost (despite it being illegal) to net a client and undercut the competition.

In the end? Trust me, take the slow route. As someone once said in #wht (paraphrased and some choice language removed): "It's funny seeing all these providers fighting over a heaping pile of dung. They spend all day trying to get to the top of the pile but fail to realize they're just standing in a pile of crap at the end of the day."

Let them take the lower-class marketshare, you'll realize the benefit of it later on as you increase in size. You do not want to cater to the walmart market if you're trying to offer support as well.

They will hound you day in, day out for the most remedial of things. Persistently.

Random tangent: It's sort of cute seeing companies price themselves out of business (skybus and the likes). Having higher prices and larger profit margins allow for fluctuations in the cost of business, markets, etc. without having to sacrifice quality or give up entirely.

Seeing companies selling $2 hosting is adorable really. I'd take bets on how long they'd last but some of them seem to have more plastic (debt) than they know what to do with. I've been in the industry for a bit now and I've never spent a single cent that I didn't have in cash-on-hand. I've never sold for rock-bottom prices and I'm churning 6 digit revenues with very high profit margins with minimal effort expended.

It's a wonderful world :)

www.servage.net (http://www.servage.net)
www.uk2.net (http://www.uk2.net)
www.resellerspanel.com (http://www.resellerspanel.com)

They are European companies with overselling plans and nobody has been accused of fraud...

I also have a business in europe with such plans and no one has accused me of fraud, in fact my customers are more satisfied than in other businesses.

P-Nut i really like your answer up there on the potential and quality of customers you are actually getting. I have never though about it that way, all though i don't over sell on space.

But, its not thats its unfair is that, will the customer/client read it in the first not.. of course not! But that is in there just in case for most over sellers if all the resources are used up they fix it by buying another server right but! IF they cant afford it, then thats where that term comes in on the TOU. They drop the biggest users for "using to much resources" then move on with new open space.

Its a big circle really, but over selling is a bit stupid if you cant afford new servers to keep up with the demand because then your going in circles with the same old thing.

The whole idea is really just bleh, most of them go in debt and close out, so they will always be out there but most of the time your most valued customers will find you because you do not over sell.

Just hang in there, and cheers for hosting from Germany.

I personally think it should be illegal (or enforced) to not offer for example, 300GB disk and 3TB bandwidth then kick the user out when they only use half of that, but I also believe that one single user should not be allowed to use all server resources, ruining service for other users on that server. So if you can't offer 300GB/3TB without guaranteeing the user won't bring the server to a halt, you shouldn't offer those kind of plans.

Very interesting topic though, if this was enforced to prevent hosts from cutting users off in ridiculous situations, then I believe a lot of hosts will fall apart.

glace, I share your sentiment with the oversellers, but you can't blame them if you can't cut the mustard in the hosting business. They're not to blame for your inability to build a successful and thriving hosting business. I've been reading your posts of late and you seem to be having problems in the business and you seem to have identified the overseller hosts as being the ones to blame for your problems? Is that correct? I don't meant overstep my mark here, but this is the feeling and frustration I'm reading into your posts of late.

I see that what you say might be correct. But it does not change the fact that these TOS being accepted as the word of God is plain ignorance.
Your post might actually divert the point. Just because the OP has some other hidden agenda for bringing this point out. does not mean that it is wrong

I personally think it should be illegal (or enforced) to not offer for example, 300GB disk and 3TB bandwidth

I think it's a bit much to have the hosting industry regulated. :eek:

glace, I share your sentiment with the oversellers, but you can't blame them if you can't cut the mustard in the hosting business. They're not to blame for your inability to build a successful and thriving hosting business. I've been reading your posts of late and you seem to be having problems in the business and you seem to have identified the overseller hosts as being the ones to blame for your problems? Is that correct? I don't meant overstep my mark here, but this is the feeling and frustration I'm reading into your posts of late.

i disagree.

what is happening with overselling and prohibiting usage of sold resources is harming everything, and it is fraud.

what i see is, in america hosts are able to circumvent the customer protection by going around it via other means. ie- you use prohibited stuff, you did stuff we prohibited, so we terminate you.

the fact is they are making it very hard to notice in a contract that you are limited by something (cpu, inodes, ram usage whatever) that, youll never be able to use the resources you are sold, even if you use it with legitimate activity.

it is blatant, flat out bypassing of law in a certain area with some laws from another area. it constitutes an exploitation of legal system, and thats rampant in united states.

what needs to be made illegal is 'small print'. thats causing all the trouble in every way in all walks of life.

I agree that overselling to the extremes that some hosts do, is bad, but it won't stop another host from building a successful hosting business, without using the same marketing tactics.

I feel that I have an unfair disadvantage towards other hosting companies. I am located in Germany where fraud is illegal. That means if you sell something to somebody you actually need to give it to him/her. In the US that appears to be different. I did some research and found that many US hosts have this in their TOS:

"Engaging in any activity that, in [HOST]'s sole and absolute discretion, disrupts, interferes with or is harmful to (or threatens to disrupt, interfere with, or be harmful to) the Services, [HOST]'s business, operations, reputation, goodwill, customers and/or customer relations, or the ability of [HOST]'s customers to effectively use the services is prohibited."

Let me translate this: "If we say you violated our TOS, then that's true" or in other words: "If we in our sole discretion decide to take away from you what we sold to you then that's ok".

In my country this is called fraud but in the US...no problem. Of course these laws allow the hosts to oversell like crazy. I can easily sell you 10 trillion terrabyte if I - in my sole and absolute discretion - can kick your butt at any time for no reason. In Germany I can not do this. How am I supposed to compete with fraudsters who are supported by their government ?? Why doesn't America have consumer protection laws ???


All in all TOS can say anything the Hosts wants it to say, however if they do damage to your business wrongfully their TOS will NOT protect them from the LAW. Period!

A lot of them around here try to say it's part of a contract but in legal nodes it is not and when you are talking about BtoB relations they can only express their "business preferences" that do not violate the law.

If they put in the TOS that you owe them a million dollars upon completion of sign up above and beyond what you are paying for the service, it would be struck down as a TOS is only terms of service not a legal binding contract, which actually must be signed by both parties and once signed can not be changed like a TOS, which can change at any moment.

The only thing in a TOS that could be upheld are the sevice related text about no spaming from our servers, no virus stuff etc... Even then they would have to PROVE it in court and if they fail to do so then they will share in what ever loss your business incurred.

Personally I think hosting is probably headed down the path of regulation at least in the US anyway. Way to many small businesses are getting the shaft because the hosts greed to force upgrades.

I think eventually it's going to catch up and they won't like the price regulations, legal TOS, and probably binding service contracts. Sad but it seems to headed that way :-(, but I hope it will be good for the consumer in the long run!

I personally think it should be illegal (or enforced) to not offer for example, 300GB disk and 3TB bandwidth then kick the user out when they only use half of that, but I also believe that one single user should not be allowed to use all server resources, ruining service for other users on that server. So if you can't offer 300GB/3TB without guaranteeing the user won't bring the server to a halt, you shouldn't offer those kind of plans.

Very interesting topic though, if this was enforced to prevent hosts from cutting users off in ridiculous situations, then I believe a lot of hosts will fall apart.


Well if you're going to do it on the 300GB/3TB services you're going to need to do it on the 1GB/10GB services as well.


The problem with web hosting is web sites can be very resource intensive without using any space or bandwidth. I'll be honest and say we've had to boot customers who refused to fix their sites and our packages are modest. You're going to have users who come in with poorly coded scripts that are performing hundreds of queries or very badly constructed ones that can bring a server to a crawl. You can also have sites that have insanely high traffic and don't use much bandwidth as well.

Until hosting companies measure actual server resources like CPU and memory then we're going to continue to have complaints about how they could not use the space and bandwidth but hit some mysterious cpu and memory limit.

The problem with web hosting is web sites can be very resource intensive without using any space or bandwidth. I'll be honest and say we've had to boot customers who refused to fix their sites and our packages are modest. You're going to have users who come in with poorly coded scripts that are performing hundreds of queries or very badly constructed ones that can bring a server to a crawl. You can also have sites that have insanely high traffic and don't use much bandwidth as well.

Until hosting companies measure actual server resources like CPU and memory then we're going to continue to have complaints about how they could not use the space and bandwidth but hit some mysterious cpu and memory limit.


Or just know what your customers want to run and base your business on hosting their script. I host basicly 2 different script, both insanely resource intensive, both can run very well in under 100mb of space, and both can and do bury whole servers, but I've priced my services to allow them, and have archived the top spot in this space.

My point being, don't be one of the Jones, running after the same customer as 4,000 other web hosts. Sure, it's easy to host that plain vanilla site, but you are at a huge disadvantage and not because of the oversellers, but by shear saturation of the market place. Find a niche, serve it well, or at lest better than anyone else servicing that niche, and leave the others to pick the bones clean.

As far as I know the customer lost this lawsuit.



Well if you make offers but you know nobody is ever going to get it because you at your sole discretion say so then this is called fraud in most countries.



But the turth is nobody ever reads the TOS and be honest...you don't either !

Actually the customer won the suite, it wasn't what was issued by the jury, the judge just toned down the amounts then the paties came some other arrangement but in the books the customer won hands down. something like 200K for 1.25 cup of coffee.

I ran in to that very issue, my host on one of my sites "moved it to a junk server" and said your scripts suck and you need to fix them because they are using too much memory and CPU.
they quoted something like
limits
1% cpu
1% Php usage

they said my site was using
3%+ cpu
5%+php

So I said I'll look into it, so I cached all the high hit values pages and my search results pages for days not hours, so my whole site was delievering nothing but cached html.
they still said
not good enough
you are now at
2.5% cpu
bla bla
I told them that their server was hosed not my scripts cause it would be impossible for the meger 800 visitors a day hiting nothing but cached pages to use that much cpu/php resources.

they came back with well you can upgrade to our VPS Plan, so rather than stay on the junk server and continue to hurt my business I upgrade to their plan and guess what.
my cpu resources and php all were well below
0.2%
The problem here is making a claim to get more money and not giving the custom access to the actual information in the claim. the only way to get the information to see if it correct is to file a lawsuit and that is where this is going for many of the hosts, it's sad to see and worst of all the few good hosts out there are going to get hurt too!

glace,

Why don't you start an organization of non-overselling hosts and then distribute site seals for each of your members?

The seals whould say something like "NOH - No Overselling Here".

Luckly customers would slowly start looking for these seals when shopping and you'd have accomplished some self-regulation for the whole industry.

But I don't think overselling is a problem, if done properly. Making excuses to kick a customer off just because he's trying to use what was advertised in the first place, that's the real problem and what you should be targeting.

And I think you can address that problem with a fair TOS, which would not allow those abusive terms you mentioned earlier.

So you might wanna change the site seal to something like "FT - Fair TOS".