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  1. #1
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    May 2001
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    Fraudulent non paying (international) customers - Anyone else?

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    We're located in the US and have noticed lately that we are getting a lot fraudulent/non paying (mostly international) customers. Anyone else?

    We make it very clear in our terms, how to cancel, and we even provide this information in every new invoice we send. Yet, these customers completely ignore this. When we try to collect on overdue accounts, they come up with the craziest excuses.

    Besides the ones that just ignore attempts on getting paid, the ones that do respond will come up with excuses such as:

    I already canceled and don't have to prove anything (because they never did cancel)

    I don't live in the US so good luck getting paid (and they will end it with a LOL or HA HA)

    I never wanted your service because it was lousy (but they never complained before)

    Try and collect and I will post negative reviews on you (threatening to post false information)

    Remove the invoice or I will tell everyone you suck (yet there are no prior complaints)

    I quit using your service so I don't have to cancel (huh?)

    I didn't read your terms so it doesn't apply to me (really?)


    We have always received ridiculous reasoning, but it has been overbearing lately. Makes me wonder if these are all the same group of people, or they are sharing.
    Anyone else seeing an influx of these problem clients lately?
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  2. #2
    Join Date
    Feb 2004
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    Toronto, ON, Canada
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    Nature of the business. No other way to around it.

  3. #3
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    Quote Originally Posted by lonea View Post
    Nature of the business. No other way to around it.
    Yes, I understand that, and I already acknowledged this. What I'm saying is that it seems to have increased tremendously lately, and was wondering if others have seen this trend.

  4. #4
    Join Date
    Feb 2004
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    Toronto, ON, Canada
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    Have you started promoting your company at a new venue ?

    Quote Originally Posted by proaxxs View Post
    Yes, I understand that, and I already acknowledged this. What I'm saying is that it seems to have increased tremendously lately, and was wondering if others have seen this trend.

  5. #5
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    Jan 2003
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    Canada
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    I know people say you can't really put Countries into categories of dishonest people...but...unfortunately you can. They talk and post about sites that you can steal from. No way around it really. You can ban countries, but there will be some users that will pay their bills that you'd be blocking out.

  6. #6
    I haven't really seen an influx of this recently but that does sound pretty bad, almost too bad. Have you considered they are acting this way to get their way with you? A good policy might be when a customer comes to you with a problem instead of fixing the problem for the customer show the customer how to fix the problem themselves. (if they can, I would imagine in the case of cancellation of licenses they can) Then next time they won't have to ask you again!

  7. #7
    Yes; we have seen an influx of individuals (usually international) who are not paying and are not responsive to any queries/emails on our part.

  8. #8
    Join Date
    Jan 2003
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    Canada
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    They are paying their first bill at least, right? Set over-due accounts to be suspended after a day or two of being due.

  9. #9
    Most of our clients they don't cancel the services just leave it. that's nature of the business. what can you do about it? just put suspension after overdue payments and if they haven't pay it in few days then just terminate it.

  10. #10
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    Quote Originally Posted by Hannan View Post
    Most of our clients they don't cancel the services just leave it. that's nature of the business. what can you do about it? just put suspension after overdue payments and if they haven't pay it in few days then just terminate it.
    Very bad idea there. I've forgot to pay invoices a couple weeks after they're do. It's a honest mistake some users make. Termination should be at the very least after a month. Suspension is fine, but termination deletes files.

  11. #11
    Quote Originally Posted by rits View Post
    Very bad idea there. I've forgot to pay invoices a couple weeks after they're do. It's a honest mistake some users make. Termination should be at the very least after a month. Suspension is fine, but termination deletes files.
    That was an example, we usually don't format before 2 weeks and several emails.

  12. #12
    Join Date
    Apr 2009
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    Dallas/FortWorth TX
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    After years of experience, we have seen a pattern. There are 3 types of clients

    1. Pays on time
    2. Always pays late, and whines about late fees
    3. Doesn't pay, does not cancel.

    So keeping that mind we always pretty much make a right decision on when and how to terminate or suspend. But all in all its a fact that this industry does not go by business standards, since its and "online" business nobody bothers to cancel. So its easy to take it easy and just send a suspension after 2 days and termination after 5 days.

  13. #13
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    Quote Originally Posted by rits View Post
    Very bad idea there. I've forgot to pay invoices a couple weeks after they're do. It's a honest mistake some users make. Termination should be at the very least after a month. Suspension is fine, but termination deletes files.
    Termination SHOULD be usually done within 21 days of non-payment.

  14. #14
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    Quote Originally Posted by NEQ3 - Sam View Post
    Termination SHOULD be usually done within 21 days of non-payment.
    Maybe. There is no right here as long as the client knows.

    At the moment I choose 30 days. That could change down the line to 21. I don't know.

  15. #15
    Quote Originally Posted by Hannan View Post
    Most of our clients they don't cancel the services just leave it. that's nature of the business. what can you do about it? just put suspension after overdue payments and if they haven't pay it in few days then just terminate it.
    This is exactly right. Why beat your head against a wall. People 'cancel by nonpayment' all the time.

  16. #16
    Quote Originally Posted by NEQ3 - Sam View Post
    Termination SHOULD be usually done within 21 days of non-payment.
    Depends on the type of service. 5 day termination would be reasonable for dedicated servers, less so for shared hosting where holding onto files for a while has little or no cost.

  17. #17
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    Jun 2011
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    We'll suspend it the first day over duedate. And terminate after 21 days.
    The reason we suspend so early is to make it clear to people that have skipped emails or just forgotten it that their invoice is due.

  18. #18
    Join Date
    Feb 2004
    Location
    Toronto, ON, Canada
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    haha type #4

    -found out their site was suspended after the 1 day grace period, calls in and complain the site was suspended after one day.


    Quote Originally Posted by Kusai View Post
    After years of experience, we have seen a pattern. There are 3 types of clients

    1. Pays on time
    2. Always pays late, and whines about late fees
    3. Doesn't pay, does not cancel.

    So keeping that mind we always pretty much make a right decision on when and how to terminate or suspend. But all in all its a fact that this industry does not go by business standards, since its and "online" business nobody bothers to cancel. So its easy to take it easy and just send a suspension after 2 days and termination after 5 days.

  19. #19

    Re: Fraudulent non paying (international) customers - Anyone else?

    Here we see 4 different types of clients when it comes to paying their dues.

    1. Pays on time or early every time
    2. Will contact us if they are having difficulty making a payment and we work around it to a solution.
    3. Doesn't want to pay and moans and tries to wriggle out of paying.
    4. Doesn't pay and after 30 days results in a termination.

    We're reasonable with all clients whem it comes to their payment dates and we're flexible if it comes to moving a billing date or even setting their services to pro-rata to their pay day. So we do understand thay some clients may have difficulty from time to time, but some don't seem to care.

  20. #20
    Join Date
    Apr 2007
    Location
    Atlanta, Ga. USA
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    We suspend after one day grace and automatically terminate after 30 days for our shared hosting. Additionally we require a 5 day notice prior to a client cancelling their account. If they close their account without the notice there is a $25 fee.

    If it's a long time client or if I suspect they may have a problem after seeing they have been a client who usually pays on time I'll phone them to see if there is a sickness or something we can help with. We also have a email which I'll send after a termination just letting them know I've noticed they haven't paid or given a notice and ask if we can be of service getting their site back online. The 5 day notice requirement is a tool which has helped me turn up some issue I wasn't aware of and I've been able to correct mostly minor issues and keep the client as well as turn them into a satisfied customer instead of a ex disgruntled client.

    The email I send after an account is just dropped to see if they need extra time to pay or showing our concern about any issue which we were not aware of works a lot of the time.

    Clients want to know that you appreciate their business and the money they spend with you. A lot of times this simple act of asking if there is anything I can do for them is all it takes for them to renew their account. I have some clients that have had continuous service with us since we opened in mid 2007.

    Regards,
    redham

  21. #21
    Join Date
    May 2009
    Location
    Markham, Canada
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    440
    I feel that the best way for the customer to cancel a service is to simply stop paying. It just makes a lot of sense.

    When your customer does not need hosting services any longer and stops paying, there are two most common scenarios (for a hosting company):

    1) Be cool with it, auto-terminate the service and spend resources finding new customers

    2) Be anal about it, try to collect, waste even more time for a few extra bucks, and make sure to alienate the customer so that he never comes back should they need to host something in the future.

    To be honest, I never quite understood the 2) approach. Not sure what exactly it achieves. Perhaps I am missing something obvious?

    This all applies to Shared/VPS/VPN hosting where provider does not have direct expense to deploy a service. Dedicated servers is a totally different thing though.

  22. #22
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    Quote Originally Posted by dcdan View Post
    I feel that the best way for the customer to cancel a service is to simply stop paying. It just makes a lot of sense.

    When your customer does not need hosting services any longer and stops paying, there are two most common scenarios (for a hosting company):

    1) Be cool with it, auto-terminate the service and spend resources finding new customers

    2) Be anal about it, try to collect, waste even more time for a few extra bucks, and make sure to alienate the customer so that he never comes back should they need to host something in the future.

    To be honest, I never quite understood the 2) approach. Not sure what exactly it achieves. Perhaps I am missing something obvious?

    This all applies to Shared/VPS/VPN hosting where provider does not have direct expense to deploy a service. Dedicated servers is a totally different thing though.
    I find it completely disrespectful to be quite honest. Especially if it was a client I go out of my way to help out and they don't have the decency to spend two seconds to put in a ticket or drop a email to say I quit.

    It's common sense that's what you do when you do not want something you are being billed for. There are emails sent with bills and overdue accounts. Disrespectful...

  23. #23
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    Apr 2007
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    Atlanta, Ga. USA
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    88
    Hi dcdan,

    The $25 fee is seldom collected or perused. We have a $0.99 domain included with most hosting plans and often the domain is paid before the hosting. We require that the hosting be active for the discounted domain to be in effect. The fee is usually used simply to collect the difference between the $0.99 the client payed for his domain and then stops paying for their hosting. Our regular price for domains is $11.95. As you know as a hosting provider most domain names are unique to the client and worthless to anyone else. We are simply trying not to be duped for the discount when the client had no intention of keeping his hosting. We usually just try to recoup the difference of $10.96 for their domain. Once explained the client usually understands and makes good for the full amount on the domain price.

    The 5 day prior notice of intent to stop their service is to see if there is something we can do to satisfy the client and keep them happy and their business. You would be surprised how many clients won't make their dissatisfaction known and how minor the problem is. Usually it's something easy to fix and keep a client.

    We simply want to know about all of our client's concerns and make any changes which our clients need. We are client orientated and most of our clients are business site owners so the proper and efficient operation of their websites are very important. It could be as simple as them needing a little more storage or a VPS that needs a bit more memory.

    redham

  24. #24
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    Oct 2008
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    313
    I suspend the account if the invoice is not paid on the due date, and 30 days later account gets terminated (unless in the meantime you pay the invoice).

  25. #25
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    Quote Originally Posted by rits View Post
    I find it completely disrespectful to be quite honest. Especially if it was a client I go out of my way to help out and they don't have the decency to spend two seconds to put in a ticket or drop a email to say I quit.
    When a company has a few hundred customers then I can understand this approach and I respect it. But generally things get highly counter-productive when feelings are involved.

    People have different reasons to quit, some reasons may not allow them to even drop a line, especially when the hosting service is not in the top-10 in their "life priorities" list.

    Quote Originally Posted by rits View Post
    It's common sense that's what you do when you do not want something you are being billed for. There are emails sent with bills and overdue accounts. Disrespectful...
    I feel that in an "ideal" world this should not be the case. When you do not want something, you should be able to simply stop paying for it, and not waste anyone's time (yours and provider's) trying to "cancel" things.

  26. #26
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    Quote Originally Posted by dcdan View Post
    When a company has a few hundred customers then I can understand this approach and I respect it. But generally things get highly counter-productive when feelings are involved.

    People have different reasons to quit, some reasons may not allow them to even drop a line, especially when the hosting service is not in the top-10 in their "life priorities" list.



    I feel that in an "ideal" world this should not be the case. When you do not want something, you should be able to simply stop paying for it, and not waste anyone's time (yours and provider's) trying to "cancel" things.
    I get what you're saying. I'm not one that loses sleep or anything. It just bothers me. That will be the case no matter how many clients I have 1 or 10,000. Just the way I am.

  27. #27
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    Quote Originally Posted by redham View Post
    Hi dcdan,

    The $25 fee is seldom collected or perused. We have a $0.99 domain included with most hosting plans and often the domain is paid before the hosting. We require that the hosting be active for the discounted domain to be in effect. The fee is usually used simply to collect the difference between the $0.99 the client payed for his domain and then stops paying for their hosting. Our regular price for domains is $11.95. As you know as a hosting provider most domain names are unique to the client and worthless to anyone else. We are simply trying not to be duped for the discount when the client had no intention of keeping his hosting. We usually just try to recoup the difference of $10.96 for their domain. Once explained the client usually understands and makes good for the full amount on the domain price.

    The 5 day prior notice of intent to stop their service is to see if there is something we can do to satisfy the client and keep them happy and their business. You would be surprised how many clients won't make their dissatisfaction known and how minor the problem is. Usually it's something easy to fix and keep a client.

    We simply want to know about all of our client's concerns and make any changes which our clients need. We are client orientated and most of our clients are business site owners so the proper and efficient operation of their websites are very important. It could be as simple as them needing a little more storage or a VPS that needs a bit more memory.

    redham

    I respect this approach, I personally would like to work with a company that would talk to me when I am about to cancel a service. However, I also feel that I should be able to cancel by simply stopping making payments.

  28. #28
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    Quote Originally Posted by dcdan View Post
    However, I also feel that I should be able to cancel by simply stopping making payments.
    Why? if you agreed to a providers terms of service when you originally signed up and in the terms it clearly states the correct process to cancel account, then you should not be cancelling simply by choosing not to pay an invoice.

  29. #29
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    Quote Originally Posted by Servstra-Sales View Post
    Why? if you agreed to a providers terms of service when you originally signed up and in the terms it clearly states the correct process to cancel account, then you should not be cancelling simply by choosing not to pay an invoice.
    This should not be in the TOS in the first place. Let's be realistic, shared hosting and VPS services do not require such complex cancellation workflow. No one benefits from this.

  30. #30
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    We've not had a big deal on our webhosting business, a few people have not paid invoices. We've not bothered to remove overdue payments / invoices / suspended services yet due to December coming shortly... We've got a planned maintenance where we will go though all accounts clearing them up ready for the new year.

    On my other brand we get people ordering owned licenses in bulk and then keep them overdue, they get classed as fraud on our system.

    We had a customer from here who used a promotion, then cancelled it due to us restricting resources.

  31. #31
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    Quote Originally Posted by dcdan View Post
    This should not be in the TOS in the first place.
    Why?

    Quote Originally Posted by dcdan View Post
    Let's be realistic, shared hosting and VPS services do not require such complex cancellation workflow. No one benefits from this.
    Who said cancelling had to be complex? Most shared, reseller and VPS hosts have automatic cancelling which allows the customer to simply complete an online form and select either to cancel immediately or at the end of the current billing cycle.

    Not paying a bill and not notifying the provider is simply being lazy and you will find it is against most provider's ToS.

    You wouldn't just ignore to pay a power bill if you changed houses, would you?

  32. #32
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    Quote Originally Posted by Servstra-Sales View Post
    Why?
    Because there is no point. Can you make up a single reason why it should be there?

    Quote Originally Posted by Servstra-Sales View Post
    Who said cancelling had to be complex? Most shared, reseller and VPS hosts have automatic cancelling which allows the customer to simply complete an online form and select either to cancel immediately or at the end of the current billing cycle.
    This is correct, but why complete the form? What practical purpose does it serve?


    Quote Originally Posted by Servstra-Sales View Post
    Not paying a bill and not notifying the provider is simply being lazy and you will find it is against most provider's ToS.

    You wouldn't just ignore to pay a power bill if you changed houses, would you?
    This is different - you have actually used the power and you owe the money for the service you consumed. In prepaid webhosting, if you do not pay then you do not get the service. It is like with a prepaid phone, if you stop paying, the phone gets disconnected, voila, no need to "cancel".

  33. #33
    You can also check whether their domains resolve to your DNS.Often times they have already moved to a new host

  34. #34
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    Welcome to the real world :/

  35. #35
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    If you guys are moaning about non payment etc then simply change your system, move to a OVH style one. where the customer would pay for a service and set it to expire on the next billing date and extend it from there (when they pay again).

    Only a fool would go to debt collectors etc its useless and they have no power whatsoever.


    I find it pathetic that you guys would actually moan about something like this. You entered the industry knowing full well something like this would happen. your own fault really.

  36. #36
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    Quote Originally Posted by dcdan View Post
    This is different - you have actually used the power and you owe the money for the service you consumed. In prepaid webhosting, if you do not pay then you do not get the service. It is like with a prepaid phone, if you stop paying, the phone gets disconnected, voila, no need to "cancel".
    You still get charged even though you are disconnected...

  37. #37
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    Quote Originally Posted by CW Mike View Post
    You still get charged even though you are disconnected...
    I think part of the problem is also shady hosting companies with thousands of lines of TOS which are pathetic.

    The industry needs to change...

  38. #38
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    Quote Originally Posted by CW Mike View Post
    You still get charged even though you are disconnected...
    I have never seen this with any operator to be honest. Post-paid/contract is a different story though.

  39. #39
    Quote Originally Posted by Servstra-Sales View Post
    Why? if you agreed to a providers terms of service when you originally signed up and in the terms it clearly states the correct process to cancel account, then you should not be cancelling simply by choosing not to pay an invoice.
    The terms of service for many recurring services not singling out hosting are designed to make it very difficult to cancel recurring services. With the hoops that often have to be jumped through, combined with high pressure sales response to retain the customer, consumers have been trained that its just better to stop paying when you no longer want the service rather than go through the hassle of cancelling. You may see things differently because you don't operate like that, but the right place to put the blame are the countless unscrupulous companies who have trained customers to behave this way, not to blame the customer.

  40. #40
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    Quote Originally Posted by NEQ3 - Sam View Post
    Termination SHOULD be usually done within 21 days of non-payment.
    Many Hosting companies are doing 7 Days Data Format on machines.

    If some one is not paying ,7 days are enough.

    Softlayer do that I guess and this is good to do the business, as market is very tough ,margins are low, you cant wait for 21 days if some one is not paying.

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