Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Debt Collection

[Strider]

How do most of you handle the annoying process of debt collection? We usually give our customers 3 months to pay before we shut off there account. We have a lot of loyal customers that consistently pay late but they do pay so we decided it would be in our best interest to keep accounts open but issue late fees for payments still due after 30 days. If payment has not been received after 3 months, their account is deactivated. We then move to debt collection mode and attempt to collect the money that is owed to us.

We have had varying success with this. We are starting to look into a final step, using a debt collection agency. I have been looking at http://www.olddebts.com but their prices seem high. I would rather use an agency that takes a percentage of the money they collect so their is no risk on my end. Any recommendations?

[DHWWnet]

You are a very good man, i mean giving your customers 90 days? to pay for their account.
We normally give our customers up to 30days to pay for their account.
If it's a bigger amount(i.e: over $20) then use a collection agency. Less than that and you will just be wasting your time, try holding on to their website content and see if you can get something out of it.

[Planet Z]

We send big men dressed in black and wielding large knives to their home addresses.

Seriously, though, we've found for virtual hosting it's usually not worth the effort to go after people. We usually shut down customers after 60 days of nonpayment. That's usually around $20 max.

We haven't had any problems with dedicated/colo customers not paying yet, but I would imagine it would possibly make more sense to go after those people since they would owe larger sums of money.

[Strider]

Yeah, that has been our attitude, if we can't collect, it's not worth the trouble to go any further. But then we added up how much we were stiffed last year and saw how much all those little charges added up to. I think we have to cut our grace period down from 90 days to 60 days.

[DHWWnet]

Originally posted by Planet Z
We send big men dressed in black and wielding large knives to their home addresses.

[jugithamugi]

what do you do if your non paying customers are in another country than yourself (the hoster) ? still debt collection agency ? do they have any power ?

[IGobyTerry]

Write it off. Since we do shared and reseller hosting only, most of the debts end up being smaller than $50. I'm not going go after anyone for little of money.

[moreweb]

Shared hosting environments are probably not worth it but that decision is of course up to you. If you want to dedicate the time and resources then by all means. I can't give recommendations on a specific agency but most I've dealt with don't do much more than send some letters anyways, unless you're willing to spend a decent amount.

Also, keep in mind without the customers social security number it's much much harder to report this to the credit bureau's. Legally, interstate there's probably nothing you can do with amounts that small, but you would have to check with the laws of your state with "theft of service".