Well, that really doesn't matter but lately we've been getting a lot of complaints about users whose accounts have been terminated due to non payment. These clients then complain that they'll sue us or whatever.

Also it's been our policy not to terminate any accounts at least 5 days after the due date, but oh man, these people complaint ever if we terminate their accounts after 4 weeks that they forgot to pay and they're gonna sue us and blow our offices and datacenters if we didn't give them their data back.

> They don't have any backup of their data.
> They always give us "threat" to sue us and I ask them to point their lawyers to the TOS.
> They waste at least 5 minutes of the paid time.

Recently one more client came threatening to take us to legal system because we terminated his account after it was 15 days overdue and we followed the TOS. Oh well, gimme a break!


So, a question for all you experienced hosts out there, how do you deal with such people? I'm looking for some suggestions and how can I avoid it, if possible at all.

*I've already wasted well over 2 hours dealing with these clients -- maybe more. So, it's already $150 considering we usually charge administration at $75/hr (when we really charge), should I bill them for this? ;)

Try sending them a notice everyday their invoice is late ;). Sometimes that's still not enough, though. All you can do is just keep enforcing your ToS.

Do you suspend then delete or just go straight for the delete?

Rus

Most suspensions were handled by the billing system until recently when there were a lot of incorrect suspensions. So, we don't suspend now but we give them enough notices(3 automated plus maybe a few manual) before the vps is terminated (and usually 7-10 days of time unless a client has contacted us already). This hass lowered the time required to handle the billing issues but every now and then there's a similar complaining user.

Well then they will complain about spam. I think the important thing to note is that you can't make everyone happy. If they are acknowledging the terms of service when the account is created, and your following the terms of service, there is not much that you can do that isn't labor intensive. We hold backups for 30 days after accounts are terminated before removing them. This has on many occassions helped us regain some revenue from an account someone missed.

There's also the problem of them not keeping their contact information updated. I have someone dedicated time to contacting as many of these people as we can each month via email and follow up phone, especially if it the account of a long term customer.

Unfortunately I think it all just comes with the territory but there aren't many businesses that also come with the benefits of web hosting also.

The safest thing you can do is keep their account active for at least one additional billing cycle and if they still don't pay send them to collections. If all providers did this people would be more responsible and properly cancel their accounts. As it stands, they think that just not paying is a valid method of cancellation.

As a host, there is no way to know their intent unless they communicate. If it is becoming a problem for you, you can offset the cost by charging a deposit. If they don't cancel properly, they lose the deposit. This should motivate them to communicate with you. I am seriously considering this option, personally.

The safest thing you can do is keep their account active for at least one additional billing cycle and if they still don't pay send them to collections. If all providers did this people would be more responsible and properly cancel their accounts. As it stands, they think that just not paying is a valid method of cancellation.



Yep it's pretty annoying. At any given moment we have dozens of accounts suspended for non payment. Almost all of them have moved hosts and don't bother to ever cancel with us. There are also people who don't move and just don't pay. Such an annoyance to deal with on a monthly basis. My favorite though is the people we suspend for non payment then the day it stops showing suspended in our client area they demand their data. Some people actually use the suspension as a form of temporary storage while not paying.


As for the OP get your suspension system working again. For us suspensions leads to several non payment accounts actually paying each month. Some users just don't pay until their account is disabled. I have no idea I've asked and they always say yep we received all the notices but did not pay. Leaving the accounts active for an extra month or anything like that is a really bad idea. If it's suspended for a month that's a different story at least they're not receiving free service anymore.

Sorry, yeah, I meant to say keep their account suspended for an extra billing cycle, not active. You have to do something to get their attention if they don't respond to notices.

...My favorite though is the people we suspend for non payment then the day it stops showing suspended in our client area they demand their data. Some people actually use the suspension as a form of temporary storage while not paying.

I could not agree more. So annoying, time-consuming, and expensive.

I guess we'll be enforcing a strict billing policy now. 3 days for suspension, 7 days for termination.

While we haven't did this automated, we'll automate it now (with a human eye of course).

I assume that's the enough time for users to pay for the service.

I guess we'll be enforcing a strict billing policy now. 3 days for suspension, 7 days for termination.

While we haven't did this automated, we'll automate it now (with a human eye of course).

I assume that's the enough time for users to pay for the service.

Or at least respond. I am extremely lenient with people, but only if they communicate. If they don't respond to notices about their service, then they shouldn't be surprised to see it suspended.

We disconnect on day 10 and always get the "You just unplugged me without calling?".

We send a "past due" notice every day the bill goes unpaid. After they're disconnected we give them 48 hours to pay before we recycle the server. Once the server is recycled the data is gone and no amount of screaming, crying or begging will get it back. It always amazes me how people's data is worth "thousands" yet they can't pay the hosting bill to make sure it stays up. :(

I agree with everity. Collections agencies are a thing to be utilised. If every hosts did jump on board with this approach you do get your money and will force people to cancel properly instead of just not paying.

pdthosts, isnt it hard to enforce any type of collections on paypal payments? Its pretty simple to do with credit cards, but I am sure for most of the people here non payment comes most of the time with paypal and not credit cards.

(Not sure how good my english was there)

pdthosts, isnt it hard to enforce any type of collections on paypal payments? Its pretty simple to do with credit cards, but I am sure for most of the people here non payment comes most of the time with paypal and not credit cards.

(Not sure how good my english was there)

Collections does not mean you forcibly take their payment. It means you send them a bill for services rendered. Collections agencies have a greater ability to collect on past due accounts, since it is their specialty.

We send out several automated past due notices, then a personal email from the owner. If that doesn't elicit a response, a final notice with a termination date is sent. We always make a phone call or two, just to ensure their intent is to close their site down.

If they contact us we will work to keep them up, even if they can't pay their bill. Economy is hard on us all, I won't flush a customer because times are tough. But they gotta call and let us know they are still around.

If we can't get them on the phone or by email, we put up an "under construction" page without deleting their entire site for a few days. This leaves their email up, and is simple to remove if they call looking for their site. A few days later the site is suspended (but not deleted). Again, it is easier to unsuspend than to upload an entire site.

We retain about 95% of our accounts, year after year, so it is easy to work with the few that are falling off the radar.

We did all this 2 years ago to an account, today he actually called asking what happened to his site. We put his site back today up and everyone is happy.

Wow!

Try sending them a notice everyday their invoice is late ;). Sometimes that's still not enough, though. All you can do is just keep enforcing your ToS.

We've found sending them a notice every day doesn't do anything! It's like hello didn't you receive 30 overdue notices?

If they don't care about a single overdue notice, they won't care about 30 or 100 either.

We don't get many complaints like this, and we're pretty lenient about it:

Due date: reminder invoice
15 days after due date: 2nd reminder invoice
30 days after due date: Suspension warning
37 days after due date: Suspension
67 days after due date: Cancellation

Our subscribers also pay in advance, and their due date is 15 days before the next service period, so they can only go 22 days max into unpaid service before we shut them off. At that point, if they don't pay, we just let them go and eat the 22 days, but that's better than having them owe us for the past three months of service.

What does amaze me everyday is how irresponsible some small businesses are. People will intend to cancel, and choose to do so by not contacting us at all and not paying. If we prorated the used unpaid service and sent that on to collections, we could seriously ding some credit scores in an era where one late payment is being used as grounds for credit cards to jack up their rates by 10 points.

How can you guys justify sending unpaid invoices to collections? Suspend them early in the month if you want to get paid at all. If you let them go more than 5 or 7 days, they're taking money from you. But, people should be prepaying for their services. No matter what your ToS says, if you send them to collections and they file a civil suit against you, you will loose (at least in the US) If they are suspended, you are not providing them a service. They don't pay, you still don't provide them the service.

We charge a $15 late fee after 5 days, 7 days gets suspended, 30 days gets terminated and completely deleted from our servers. There is no backups made. Not my problem anymore.

A suspended account is still an expense for the host.

How can you guys justify sending unpaid invoices to collections? Suspend them early in the month if you want to get paid at all. If you let them go more than 5 or 7 days, they're taking money from you. But, people should be prepaying for their services. No matter what your ToS says, if you send them to collections and they file a civil suit against you, you will loose (at least in the US) If they are suspended, you are not providing them a service. They don't pay, you still don't provide them the service.

We charge a $15 late fee after 5 days, 7 days gets suspended, 30 days gets terminated and completely deleted from our servers. There is no backups made. Not my problem anymore.

But if they do not follow a host's Term's of Service, stating that you must cancel by sending an email to this email address, is it not the hosts right to continue to bill the client since a request for cancellation has not been sent by the client nor received by the host? How can hosts, if the they chooses to of course, charge clients for administrative time (chasing non-paying clients), as I have seen hosts do, if the client chooses not to pay. A Collection Agency would be the only option.

If what your saying is true, how do you explain large companies (not that the companies size matters) like The Planet (for example only) get away with sending accounts to collections if you fail to pay for your next month of service without canceling? Correct me if I am wrong, but I think I have seen a few discussions about this either here or DP, but not specifically related to TP I should add.

Linux Standard -
I don’t know exactly what your cancellation policies are, but it seems to me that you could make life so much easier on yourself. You need to get that automated suspension system working! And change your TOS so that you don’t have to deal with all of these admin problems manually. Like - “Your account will automatically be cancelled [your terms here] for non-payment“…

Sending an account to collections is just going to cost you more in time and money. And what do you really expect to gain? Is it really worth the headache? Unless, you have hundreds of overdue accounts the odds are you won’t be able to collect a high enough percentage to make the fees equitable.

So what if they didn’t email you to cancel. It happens. People get busy, have problems, may be indisposed or they simply don’t care. Automatically suspend the account at around 10-15 days and like everyone else has said - send out automated daily reminders. If that doesn’t work, terminate the account after at least one full overdue billing cycle + seven days. That gives them plenty of time to get a payment to you or at the very least to respond TO YOU by phone or email. It should not be your responsibility to contact them unless you want to.

[Note: Some hosts don’t terminate at all, but run a company ad on the suspension page until the domain is transferred off or expires.]

Personally, I like to keep a backup of the account because it doesn’t present a problem to me, but I do not let them know about it. What a surprise when I tell them that all is not lost! Yet, It should be clearly stated not only in your TOS, but also in the billing reminders that it is not the hosts responsibility to maintain a backup.

Good luck to you

Unless, you have hundreds of overdue accounts the odds are you won’t be able to collect a high enough percentage to make the fees equitable.

Ok, so maybe hundreds is an exageration. What I mean is a large enough volume or even a couple for high dollar amounts. It is all a numbers game.

Imagine having hundreds of accounts that are, at any given time, suspended for non-payment. Having to send out hundreds of notices every day. Having to deal with hundreds of angry people because they are mad that their site is suspended, even though THEY are the ones that ignored 10 reminders.

Dealing with delinquent accounts can get pretty annoying, expensive, and resource-intensive. You can only keep accounts suspended for so long, and at some point you need to recoup the loss.

Personally, all I ask is that they respond. That way I can extend the due date accordingly, put a note on the account saying what the status is, and be done with it. It doesn't cost them anything to reply to a notice.

To sum this up.

We email every day the invoice is unpaid (late)
We suspended after 3 days late
We charge a 10% reactivation fee of what ever their total costs are if it goes unpaid for another 7 days.
We terminate 5 days later.
That is 15 days worth of time they have to get in contact with us before having their stuff terminated.

At this point, we do not provide a backup if they have not paid. Keep enforcing your ToS. It's the only thing you can do. They wont sue. They can't sue either :)

wonder if that nice guy from hostgator that refunded 1 guy 200 dollars for a 10 dollar plan could mention somthing. Hostgator is a rather big company and must have tons of people that dont pay. if you guys are reading this how have you delt with it?

But if they do not follow a host's Term's of Service, stating that you must cancel by sending an email to this email address, is it not the hosts right to continue to bill the client since a request for cancellation has not been sent by the client nor received by the host? How can hosts, if the they chooses to of course, charge clients for administrative time (chasing non-paying clients), as I have seen hosts do, if the client chooses not to pay. A Collection Agency would be the only option.

If what your saying is true, how do you explain large companies (not that the companies size matters) like The Planet (for example only) get away with sending accounts to collections if you fail to pay for your next month of service without canceling? Correct me if I am wrong, but I think I have seen a few discussions about this either here or DP, but not specifically related to TP I should add.

Because people are not knowledgable. I don't care how much time you spend on something, that is your own deal, not mine, not a customers. I have had something removed from my credit report. I was going to file a civil suit since it kept me from getting a truck loan about 2 years ago. I forgot to cancel, had moved my site away, stopped using that email (i use a different one for each different thing), and just slipped my mind to let the know (keep in mind, I have been in the hosting industry 6 years so I know it's annoying). Well, I contacted them and let them know my intentions to file a civil suit in 7 days if it was not deleted from my credit report. The civil suit was going to be on the grounds of not having to pay for services not rendered (they suspended 1 days late). My lawyer is in the opinion I would have won (with damages for not being able to get a vehicle). I stick with that lawyers opinion.

I'm sorry, but, I refuse to pay for services not rendered.

Because people are not knowledgable. I don't care how much time you spend on something, that is your own deal, not mine, not a customers. I have had something removed from my credit report. I was going to file a civil suit since it kept me from getting a truck loan about 2 years ago. I forgot to cancel, had moved my site away, stopped using that email (i use a different one for each different thing), and just slipped my mind to let the know (keep in mind, I have been in the hosting industry 6 years so I know it's annoying). Well, I contacted them and let them know my intentions to file a civil suit in 7 days if it was not deleted from my credit report. The civil suit was going to be on the grounds of not having to pay for services not rendered (they suspended 1 days late). My lawyer is in the opinion I would have won (with damages for not being able to get a vehicle). I stick with that lawyers opinion.

I'm sorry, but, I refuse to pay for services not rendered.

Before it ended up on your credit report, you should have received a lot of emails, letters, and phone calls. Did they not bother to contact you to give you a chance to resolve it?

I do like the idea as someone mentioned about placing an advertisement for your hosting on the suspended page but I would think that would be bad publicity for your business to advertise how many delinquent accounts you currently have open. Overall the moral of the story is that a simple email, support ticket, live chat with confirmation that their the account owner should be a very simple way for them to officially cancel their services. It really doesn't take long but after all the automated emails and having their account suspended for days you would think they would get the idea to contact you and either make payment or cancel their account.

We have a $25 suspension re-activation fee after any invoice is 10 days overdue, regardless if they get suspended or not. On the final notice we send, we clearly state that in big bold letters :D. This has been working rather well actually and have noticed a decrease in late payments.

Sure people forget to pay their phone bill, electricity bill, gas bill, membership to their local gym or dvd rental outlet and if they do, their service gets cancelled.

To me there's no difference, I am providing a service just like other companies the client is possibly using in his/her day to day life, so if they forget to pay, they get 2 reminders within a 7 day period then suspended and deleted after 2 weeks.

I'm not in business to babysit clients and chase them up or remind them to pay for using my service. It's their obligation to remember to pay me for using the service I provide.


owm

Before it ended up on your credit report, you should have received a lot of emails, letters, and phone calls. Did they not bother to contact you to give you a chance to resolve it?

stopped using that email (i use a different one for each different thing),

lol, I stopped using the email as I was no longer using the service.

Because people are not knowledgable. I don't care how much time you spend on something, that is your own deal, not mine, not a customers. I have had something removed from my credit report. I was going to file a civil suit since it kept me from getting a truck loan about 2 years ago. I forgot to cancel, had moved my site away, stopped using that email (i use a different one for each different thing), and just slipped my mind to let the know (keep in mind, I have been in the hosting industry 6 years so I know it's annoying). Well, I contacted them and let them know my intentions to file a civil suit in 7 days if it was not deleted from my credit report. The civil suit was going to be on the grounds of not having to pay for services not rendered (they suspended 1 days late). My lawyer is in the opinion I would have won (with damages for not being able to get a vehicle). I stick with that lawyers opinion.

I'm sorry, but, I refuse to pay for services not rendered.

I can defiantly understand that. Did you receive a lot of emails and letters before the debt was added to your credit report? My understanding is that the TOS is like a contract, if you fail to follow cancellation procedures outlined in a contract you agree to, then you are liable for the costs involved in that failure.

I will say, charge extra fee to restore a account after 15 days is passed, and terminate account after 30 days.

Company's should email customers when there payment is coming up and if they don't pay for 5 days after due date then disable logging into there account and change there index page to a non payment page. If nothing by 10 days make a backup of there site and give them a link so they can download it then give them another 5 days before they remove the account but leave the download link up for a while longer. If the person does want there account back then charge extra to restore from backup.

EDIT: They should also make customers pay at the beginning of the month not end so you don't have people using the service then not paying.

Most clients rarely read the ToS, so they always complain this way. Just point them out to the ToS and make sure you have sent them notices. Be firm on your ToS, don't try to be "nice." You'll let them step all over your business.

Most clients rarely read the ToS, so they always complain this way. Just point them out to the ToS and make sure you have sent them notices. Be firm on your ToS, don't try to be "nice." You'll let them step all over your business.
Exactly right. Some customers simply have an odd opinion of hosting (for some it's just a relaxed expense, for some reason) and so don't read the ToS or the "Overdue" e-mails if/when they stop paying. You've just got to ensure that you point them to the ToS and don't bend the rules for every person.

How to avoid problems with non-paying customers:

While I respect that each business is different, the question is, to invoice or not to invoice. In the real world, a persons ability to pay for a service is determined before said services are rendered. Invoicing acts as a form of credit as it says to a customer use the service, I will send you a bill and wait for you to pay it. There are a couple problems with this method of collecting especially in the case of doing business over the Internet.

(1) There is no way to determine credit worthiness while providing a easy way for people to sign up and use a service.

(2) If you are invoicing customers for services, then you are relying on the personal integrity of these customers to get your payments to you in a timely manner.

(3) You have limited options when it comes to collecting from those that decide not to pay and more often than not, you end up holding the bag.


Faced with this reality, the solution is simple and draconian. When the money stops the fun ends. It is the PPC advertising model for web hosting. Customers must pay for services prior to using them and when they stop paying or the payments fail, either case is treated as a cancellation. This has the effect of (1) If the service is important, people will figure out a way to make sure the money is available so that their payments don't fail and you get your money when it is due and not when the customer feels like paying. (2) Your resources are free for resale as you don't have to wait around for days or weeks to see if a person is going to pay or not. Nine out of ten leaving servers connected when the payments have stopped usually results in the following:

(1) Loss revenue / increased costs as the previous customer(s) decided to leave the service without formally canceling. This impacts your inventory because those system are marked as in-use and your new orders will have to go else-where, if you are tight on space, you might end up having to build-out or light more boxes only to discover later that you actually had the capacity in your existing system for the new orders.

(2) Abuse - Since the customer isn't paying anymore but still has access to the resources, I've seen people break the TOS/AUP because they are not paying anymore so they don't care.


(3) Finally, scammers sell the service to unsuspecting users who are surprised when the boxes go offline which leave you the provider in a situation where you have to sometimes explain to people (who are not your customers) that the guy they paid took their money and ran and the fact that they paid money doesn't obligate you to provide the service as you don't have any money on file for the resources they are using and furthermore, you are under no legal, ethical or moral obligation to assist them in resolving the matter.


Therefore, stopping the service when the money stops avoid all of the aforementioned problems. Having a protocol in place to deal with the extremely rare instances when your good customers will have technical problems making payments will avoid them getting caught in this net. Communications is the key.

Here's a few excerpts of the kinds of emails received from ligitimate customers with payment issues.

#1 "...I changed the credit card info on my account and noticed that it canceled all of my servers (20 of them) what can I do to make sure they are not disconnected?..."

#2 "...I'm having some cash flow problems right now and I am not going to be able to pay next month bill but should be able to pay the one after that. I know that you will disconnect my servers is their anyway you can shutdown the servers and preserve them until I have the money? I don't want to have to configure them all over again. Here's a list of my servers (12 boxes)...

#3 "...Oops! I just noticed that my renewal payment failed. I forgot to update my account with my new CC info. I will update it now. What can I do to make sure everything is okay?...(6 boxes)"


For each customer I was able to provide a specific set of instructions that would make sure that (a) I got my money. (b) work with them to resolve the issue and (c) minimize or eliminate the disruption for them. A degree of automation is necessary when you have more than a hand-full of servers to manage.

Hope this helps.

There is one other solution:

Ask for a deposit. If they cancel their account they get the deposit back. Otherwise, they lose it.

Yeah, i think the same as everity..

When we did hosting our policy was to suspend after five days and terminate after 30 days. We always kept a backup of the vps, reseller account, or shared account. If the client asked for a backup of their data, we would offer them it for a $50.00 fee.

If a client threatened legal action. The conversation was over and they would not be able to be a client again.

Our system is quite simple - we utilise the WHMCS 'three warnings' system, where the account gets suspended a few days after the due date. On this day, we write and send a message which isn't 'mail merged' warning the customer about the consequences of their potentially overdue payment. Usually, we give them a 72 hour notice prior to termination. Prior to 'pulling the plug', we backup all data and store it for a few extra days as a precaution, and then we terminate the account.

Personally, I would rather terminate an account retaining a backup in the event of the situation escalating as opposed to going through complaints from an angered customer.

I can defiantly understand that. Did you receive a lot of emails and letters before the debt was added to your credit report? My understanding is that the TOS is like a contract, if you fail to follow cancellation procedures outlined in a contract you agree to, then you are liable for the costs involved in that failure.

I didn't use the email anymore, I only used the email for that hosting company. I didn't receive any letters in the mail. And yes, a TOS is like a contract, however, most hosts have terms in their contract which violate laws. In many places one clause can void the ENTIRE contract. And in others, the illegal clause is the only one voided. Their was no fee for cancelling, their was no fee for leaving early, etc. The only thing was they wanted me to pay (about $40) in hosting expenses I didn't use. I refused to pay it.

You don't run a tight company with a tight termination policy, that is not my fault. You should expect to eat some money. HEre soon we are going to be implementing 15 day terminations instead of 30.

But, if their is no clause that states I am liable for $X amount o fdollars fee in the TOS if I don't properly cancel (I wouldn't host with anyone that demands this of anything other than a dedi) than I'm not going to pay for the hosting I didn't use....I hope this line of logic makes sense. In most places a person can not be held liable for payments of a service they didn't receive. If a host suspends me after 1 day late, then I don't get a service. If I'm not receiving a service, I'm not going to pay for it lol.

The point I'm trying to make here is any host that sends hosting bills (unless valued at least $200 or a LOT of them) to collections is wasting their money, and may want to look out for a lawsuite. Because some of us are smart enough to know I can win a civil suite especially with a ToS that has illegal clauses in it. Not only that, many people only provide a little checkbox saying you agree to it. Guess what? In my personal experiance, the little check box doesn't mean diddley if it's not displayed on the same page, at least in my jurisdiction. (I'm trying to work on a mod right now for WHMCS to display the entire ToS during checkout). This is one of the reasons I focus mainly on local clients that can sign a physical contract. The internet is too foggy of an area.

Well in my opinion it boils down into 2 category.

1. Customer who genuinely forget to pay their bill (not bill's) which rarely occurs
2. Customer who pay late or make it a habit so they think that their billing date is diffrent and justify by saying "oh i pay on this date every month"

So if a provider has a corporate environment where each individual has its own job and responsibility. It will not matter what type of customer it is, they will have to pay on time or their service is disrupted.

It boils down to:

1) Do you alienate legit clients that want to pay but made a mistake?
2) Do you alienate slimy clients that may be trying to shirk the rules?

In the overall scheme of things, i would say it is more profitable to prefer #1 over #2.


Lawrence

I didn't use the email anymore, I only used the email for that hosting company. I didn't receive any letters in the mail. And yes, a TOS is like a contract, however, most hosts have terms in their contract which violate laws. In many places one clause can void the ENTIRE contract. And in others, the illegal clause is the only one voided. Their was no fee for cancelling, their was no fee for leaving early, etc. The only thing was they wanted me to pay (about $40) in hosting expenses I didn't use. I refused to pay it.

You don't run a tight company with a tight termination policy, that is not my fault. You should expect to eat some money. HEre soon we are going to be implementing 15 day terminations instead of 30.

But, if their is no clause that states I am liable for $X amount o fdollars fee in the TOS if I don't properly cancel (I wouldn't host with anyone that demands this of anything other than a dedi) than I'm not going to pay for the hosting I didn't use....I hope this line of logic makes sense. In most places a person can not be held liable for payments of a service they didn't receive. If a host suspends me after 1 day late, then I don't get a service. If I'm not receiving a service, I'm not going to pay for it lol.

The point I'm trying to make here is any host that sends hosting bills (unless valued at least $200 or a LOT of them) to collections is wasting their money, and may want to look out for a lawsuite. Because some of us are smart enough to know I can win a civil suite especially with a ToS that has illegal clauses in it. Not only that, many people only provide a little checkbox saying you agree to it. Guess what? In my personal experiance, the little check box doesn't mean diddley if it's not displayed on the same page, at least in my jurisdiction. (I'm trying to work on a mod right now for WHMCS to display the entire ToS during checkout). This is one of the reasons I focus mainly on local clients that can sign a physical contract. The internet is too foggy of an area.

can you point out specific examples of terms that violate laws and allow you to skirt paying bills you agreed to?

There is no difference between being required to "pay x amount of dollars" upon cancellation, or to provide "x days of notice or be held responsible for the next month". In fact, this is quite legal. Here in Canada, Rogers (cable) requires 30 days notice for cancellation and holds the customer responsible for the bill during that time.

A checkbox that requires being clicked on, provides explicit consent and confirmation that the person has (or claims to) read the ToS. If they didn't read it, that's not an issue. If you do not read a contract and blindly sign it, you are still bound by the conditions laid out in it. This is the law.

Honestly, it sounds like you are the type of person who uses any loophole to avoid being held accountable for your actions (or inactions).

I think this the type of hosting services is important to this conversation. A simple $10/mo shared hosting account is different than a dual quad core Xeon dedicated server. The shared host has practically zero incremental cost to keeping the data or service preserved/suspended when it's an account.

If it's a dedicated server, the host has a depreciating asset that cost real money just sitting there. Some hosts can reconfigure the server for a new customer with a automated process, but some can not.

The revenue associated with a shared account is small compared to a dedicated server. You want to preserve a dedicated server customer if at all possible. A shared account that is a pain, you probably want to get rid of them, as they will cost you more than they are worth.

We tried being very lenient in the past, but that only got us huge past due balances that we either had to forgive some of to retain the customer, or we'd get nothing from the people who just "left" without canceling.

We have always sent invoices 10 days before due and try to take Credit Cards or PayPal. We only accept checks and wire transfers for larger amounts. Both have manual steps and are slow and error prone. We don't like them.

We only recently standardized the suspension/termination process. automated notices every day that you are late. 10 days late and a human writes you a reminder. 15 days you are given a more stern message that mentions disconnection. 20 day you are given 48hrs notice to suspension. 22 days, you are suspended (switch port disabled). 24 days you are canceled and the server is put in our decommissioning queue where it can be reused for a new customer. No back up is taken.

If I see bandwidth on the port before I pull the plug, I try to call them on the phone one last time. They are using the system.

We are looking in to collection agency options. Typically, since we only do dedicated servers, we are looking at a minimum of $100 past due on any account that is suspended. Sometimes as much as $1,000. Usually larger customers don't just disappear.

After hearing all of the experiences in this thread, I am thinking of revising this process to suspend sooner. It seems most hosts here do not have any results from multiple notices.

Interestingly, we had a short network hiccup during the daytime once (I can't recall the details).... and thousands of dollars of past due accounts were paid within a few minutes of the hiccup. We are ignoring the advice to have network hiccups every once a while on purpose. :o)

So, are the dedicated server hosts on the more or less lenient side of things?

Mike

can you point out specific examples of terms that violate laws and allow you to skirt paying bills you agreed to?

There is no difference between being required to "pay x amount of dollars" upon cancellation, or to provide "x days of notice or be held responsible for the next month". In fact, this is quite legal. Here in Canada, Rogers (cable) requires 30 days notice for cancellation and holds the customer responsible for the bill during that time.

A checkbox that requires being clicked on, provides explicit consent and confirmation that the person has (or claims to) read the ToS. If they didn't read it, that's not an issue. If you do not read a contract and blindly sign it, you are still bound by the conditions laid out in it. This is the law.

Honestly, it sounds like you are the type of person who uses any loophole to avoid being held accountable for your actions (or inactions).

I agree with that too.

After reading this thread and having a lot of problems with the same issue too maybe the following could be a solution but I am not so sure how NEW clients will react to that.

Most hosts and billing software like WHMCS have setup fees and while we don't charge any setup fee it might perhaps be a solution to change the "setup fee" into a prepaid / advance payment. (My english is not so good to get the correct term)

Basically this amount is equal to one month hosting and reserved for 1 month cancellation notices. When the client gives the proper one month cancellation notice this amount will be used for the last invoice. If no cancellation notice was received and/or no payment received on the last invoice we can simple cancel the account at end of the 30 days outstanding period and above amount will serve as termination month fee.

(Or in other words a client pay for the first AND last month during signup)

can you point out specific examples of terms that violate laws and allow you to skirt paying bills you agreed to?

There is no difference between being required to "pay x amount of dollars" upon cancellation, or to provide "x days of notice or be held responsible for the next month". In fact, this is quite legal. Here in Canada, Rogers (cable) requires 30 days notice for cancellation and holds the customer responsible for the bill during that time.

A checkbox that requires being clicked on, provides explicit consent and confirmation that the person has (or claims to) read the ToS. If they didn't read it, that's not an issue. If you do not read a contract and blindly sign it, you are still bound by the conditions laid out in it. This is the law.

Honestly, it sounds like you are the type of person who uses any loophole to avoid being held accountable for your actions (or inactions).

I also agree, with the exception of the last paragraph. (no comment on that.)

Regarding the client data. We're pretty generous...you stay suspended for a month before you're canceled. After that, we keep your data for 24 hours on a local HDD. If you pay within that time, we restore your site at no charge. After 24 hours, the data is wiped from the HDD and only exists in our tape archive. That's a $60 restoration fee.

We've had subscribers (not many) that have paid for data restoration from tape after being canceled for over 6 months. Amazing how many people don't back up their own data.

We send out 10 automated email responses for our shared hosting customers to notify them of the payment decline or payment problem. Then if they do not pay on the 11th day their account is automatically suspended which means their site will come up and their email will work but they are locked out of their control panel and ftp access is disabled. During this time period we will also manually email and call the clients to notify them of the payment problem. Then 1 month from their due date their account is terminated and all of their data is removed from our servers. I set myself to receive this final notice and will usually go in an manually copy their files or give them a little more time because our clients usually do end up paying. We have very low turn over and it is costly to acquire new clients. I would rather work with the few who have problems and keep them too.

I think this the type of hosting services is important to this conversation. A simple $10/mo shared hosting account is different than a dual quad core Xeon dedicated server. The shared host has practically zero incremental cost to keeping the data or service preserved/suspended when it's an account.

I find that interesting. I would think perhaps the opposite might be more beneficial. Financial risks aside, the larger client IS worth more so might be worth trying to keep / be more lenient.

Where the shared host really doesn't take up too much resources.

Or maybe i'm just playing devil's advocate. :)


Lawrence

I think its about the same.

A shared host has a much higher number of delinquent accounts at any given time, all other things being equal. All those delinquent accounts add up, and ultimately do require more servers to be in use than would be the case if customers would cancel their accounts rather than just disappearing.

We've had subscribers (not many) that have paid for data restoration from tape after being canceled for over 6 months. Amazing how many people don't back up their own data.

I've had the same thing happen. It is amazing. We deal with mostly small business sites and individuals on shared hosting, so it is not much effort to keep those backed up. I guess sometimes I am too nice, but it makes me feel really bad to have to delete an account without a backup. It is a fact that some do come back months later and are more then willing to pay for their data.

Most hosts and billing software like WHMCS have setup fees and while we don't charge any setup fee it might perhaps be a solution to change the "setup fee" into a prepaid / advance payment. (My english is not so good to get the correct term)

Basically this amount is equal to one month hosting and reserved for 1 month cancellation notices. When the client gives the proper one month cancellation notice this amount will be used for the last invoice. If no cancellation notice was received and/or no payment received on the last invoice we can simple cancel the account at end of the 30 days outstanding period and above amount will serve as termination month fee.

(Or in other words a client pay for the first AND last month during signup)

I think this is a great idea, especially for dedicated server accounts. We waive set up fees on yearly payments for shared hosting - but I clearly understand how it could be implemented as a deposit.

A suspended account is still an expense for the host.


correct, and you are still providing service to the client even though their access to that service is restricted by virtue of the account being suspended.

I saw a couple of comments stating that if the account's suspended, you're not providing the client service, but those statements couldn't be more wrong.

communication, storage, ect ect is all part of the client's service and that service is being provided until the moment that the account is deleted and the last email notification is sent.

just my opinion of course.
Bill

can you point out specific examples of terms that violate laws and allow you to skirt paying bills you agreed to?

There is no difference between being required to "pay x amount of dollars" upon cancellation, or to provide "x days of notice or be held responsible for the next month". In fact, this is quite legal. Here in Canada, Rogers (cable) requires 30 days notice for cancellation and holds the customer responsible for the bill during that time.

A checkbox that requires being clicked on, provides explicit consent and confirmation that the person has (or claims to) read the ToS. If they didn't read it, that's not an issue. If you do not read a contract and blindly sign it, you are still bound by the conditions laid out in it. This is the law.

Honestly, it sounds like you are the type of person who uses any loophole to avoid being held accountable for your actions (or inactions).

It sounds like you have no idea who I am or anything about me, but, good try :rolleyes:

I found out by being the plaintiff in a civil suit for ToS violation, not the other way around. You assume too much without knowing what you're talking about.

Different things are illegal in different areas. Here, you can not be required to payfor services you have not received. We don't even live in the same country, so don't assume you know the laws where I live.

I don't feel like going around looking at different hosts ToS to show you the illegal ones, but, in many areas just the simple 1 clause will void the ENTIRE thing, whereas in others it will only void that.

This usually stems from people who just write their own.

And where do you get off attacking me personally? You don't know me, you ahve never met me before. If you want to do that find a different medium :rolleyes:.

I have a 680 credit score(roughly). I pay all my bills on time, always have (minus the little thing I had). You don't know me. Don't pretend to know me. Some of us just won't let companys bully us around with stupid things like that :D Some of us actually have life experiance.

You have your opinion about it, I have mine. I can not justify charging someone for services they are not receiving. It's your fault if they can go 15 days without gettins suspended and 60 days without being terminated.

I just think that ordering a recurring service is the same as agreeing to pay for it until canceled. Not doing so is breaking that agreement.

People should have a little common courtesy and respect without it having to be spelled out in a ToS.

Maybe I'm old-fashioned, but I see a company as an entity that is on the same level as a human being. Companies are made up of people, after all, and they deserve to be treated as such.

If web hosting was a more in-person industry, I think people would see this issue differently. Back in the old days, you had a "milk man" who stopped by your house every morning with a bottle of milk. (I'm not old enough to remember, but have heard stories.) You would be on a first-name basis with your milk man, engage in small talk, etc. The payment arrangement was pretty similar to web hosting. It would recur automatically until canceled.

In that situation, you would never dream of just not paying, and letting the milk man figure it out on his own. The milk man is kind of like a friend. You wouldn't slam the door in his face when he asked whether or not you wanted to continue the service, you would at least have the courtesy to give him a "please cancel" or an "I'll pay you next week as soon as I have the money, please keep the service active."

It is the same principle with hosting. In the same way the milk man has to carry extra inventory and deal with extra expenses due to the uncertainty of your account, so does a host. If you don't want a service you have requested, have the common decency to cancel it.

Doing the right thing only takes a couple seconds.

I agree, but, things happen. People forget, people jsut don't feel like it. I personally don't feel justified in charging someone for a service I'm not providing them. To each their own though :D

I agree, but, things happen. People forget, people jsut don't feel like it. I personally don't feel justified in charging someone for a service I'm not providing them. To each their own though :D

Exactly.

I also strongly agree with Everity that it is not only good manners to cancel with notice; depending upon the company - one may have a legal obligation to do it. Unfortunately like Lonestar said, “things happen!”

So, as a business owner why should we set ourselves up for disappointment? We all have flexibility within the laws of our locale to create our business model as we see fit. But we must also live with the challenge of finding customers who agree to be bound by that model. And the will to enforce it.

I just try to protect myself as much as possible and avoid as many problems as I can. If someone cancels – great, if not he or she gets terminated eventually anyway. My business is not perfect; I am always learning something new. That is why I love this forum. You all make me think. J Have a great weekend…

Exactly.

I just try to protect myself as much as possible and avoid as many problems as I can. If someone cancels – great, if not he or she gets terminated eventually anyway. My business is not perfect; I am always learning something new. That is why I love this forum. You all make me think. J Have a great weekend…

What about having clients in different countries, then which rules do you follow? :)


Lawrence

I agree that things happen and you can forget. We have all done that at one time or another. But I think this is a rare exception. The vast majority of the time, people are well-aware that their accounts are delinquent, and make a conscious decision to leave the host hanging. Thats just wrong.

I agree that things happen and you can forget. We have all done that at one time or another. But I think this is a rare exception. The vast majority of the time, people are well-aware that their accounts are delinquent, and make a conscious decision to leave the host hanging. Thats just wrong.

Hear Hear.

This is why some kind of monitoring software (as per my other posts) was made so i know when people decide to bail and can act accordingly.


Lawrence

What about having clients in different countries, then which rules do you follow? :)


Lawrence

You follow the rules of your country - they follow your TOS. I am no lawyer, especially an International Biz Lawyer, but this is what I understand to be true. I would imagine trying to collect on overdue accounts from different or multiple countries would add a whole new set of problems.

:agree: Good Question! Maybe there is a lawyer out there that could better answer this.

I'm all for suspending the client etc but deleting his work is just mean.

When you fail to pay rent, they throw your stuff out of the apartment, hosts should do the same when a client is terminated. Backup his account, make it accessible from the web and let him move on.

Sh*t happens in life, death, diseases, unemployment and the last thing they need in my opinion is to lose their site/emails/databases because they failed to pay their last invoice.


Just my 2 cents.

It isn't because they failed to pay their last invoice, it is because they failed to respond. All it would take is a response, and I am sure pretty much any host would be more than happy to backup their data at no charge. In fact, this is automated for most hosts.

I completely agree with you that sometimes things happen and people can't pay. All they have to do is have the decency to let the host know their intentions.

I have allowed people to be pretty delinquent before (9 months in one case). If a customer is honest about their situation, I will extend them a good bit of credit until they have gotten through the hard times, but they have to communicate. Thats all it takes.

I have allowed people to be pretty delinquent before (9 months in one case). If a customer is honest about their situation, I will extend them a good bit of credit until they have gotten through the hard times, but they have to communicate. Thats all it takes.

I had a client that called me yesterday and asked to "suspend" the website for 4-6 months while the owner goes out of the country for medical reasons.

I said said, but i would delete the files and configuration after 8 months.

I think both arrangements are fair. They had the decency to let me know their situation so we can work with them.


Lawrence

I had a client that called me yesterday and asked to "suspend" the website for 4-6 months while the owner goes out of the country for medical reasons.

I said said, but i would delete the files and configuration after 8 months.

I think both arrangements are fair. They had the decency to let me know their situation so we can work with them.


Lawrence
Yes, that's completely fair :)

I think many hosts agree that they would be quite lenient if a client is serious and asks for some more time to pay or comes to you with their situation.

But when clients simply don't pay and you don't hear a word, you can't really allow that for weeks on end etc.

Yes, that's completely fair :)

I think many hosts agree that they would be quite lenient if a client is serious and asks for some more time to pay or comes to you with their situation.

But when clients simply don't pay and you don't hear a word, you can't really allow that for weeks on end etc.

Well, that's why i put the clause "and if i dont' hear anything by Dec 31, we plan on deleting all the files and configurations etc".

I think it's completely fair.


Lawrence

Well, that's why i put the clause "and if i dont' hear anything by Dec 31, we plan on deleting all the files and configurations etc".

I think it's completely fair.


Lawrence
Yes, that is absolutely fair :)