Page 1 of 2 12 LastLast
Results 1 to 25 of 29
  1. #1

    Web Host faces Jail

    Some of you may remember Bryan Kruchten - he owned a web hosting company called Pagecreators.

    There are a lot of details at geocities (hostingmonitor).

    Well finally the wheels of justice have turned and he faces five years in jail (see DoJ).

    I was charged $750 by Pagecreators and was sued by three American Lawyers for refusing to pay the bill. After a court ordered Pagecreators closed, and the FTC sued (also FBI investigated), the media offered to write a national story about my case. After this, AMEX settled very quickly.

    For me, it highlighted in great clarity the dangers of giving your card number over the Internet. Now I am very careful.

    When signing up, be careful!

    PS the scripts here dont let me post links to confirm the above.

  2. #2
    I agree that: before signing up throughly understand what you are getting in to....I have had bad experiences in that past also...

    Anyways Good luck in the future...

  3. #3
    I hope this information really helps people, basically back then in 1999 there was almost no law enforcement at all. They say Kruchten got two million dollars.

    Eventually the FTC sued Kruchten. It was quite a big story back then, there were hundreds of links about it (5 years ago).

    If someone is a victim of any hosting crime, they should report it immediately to the FTC (USA) or Trading Standards (UK).

  4. #4
    A link to the story that came from the geocities site you referred to.

    http://www.wired.com/news/politics/0,1283,42805,00.html

    Here is the geocities full detail.

    http://www.geocities.com/hostingmoni...ecreators.html
    www.square-network.com www.squarenetwork.com
    Now available in regular and dehyphenated.
    May 2003 Member of the Month
    Useless Community Liason Ever Since.

  5. #5
    Join Date
    Nov 2002
    Posts
    255
    Click here for the press release from the U.S. Attorney's Office (DOJ). Sounds like a real horror story for his customers.

    Click here for the past six months' worth of updates via Google.

    Edit: Looks like Coach and I were working on this at the same time.
    No good deed goes unpunished.

  6. #6
    Join Date
    May 2004
    Posts
    36
    I don't know about you guys, but I am sick of all these fraud web hosting companies that rip people of. It is real disapointing!

  7. #7
    Originally posted by Joel NZ
    I don't know about you guys, but I am sick of all these fraud web hosting companies that rip people of. It is real disapointing!
    i feel your pain,
    antoher fact is that all this scamming affects the rest of us quality web hosts, new comers get the impression that we're all bad and trying to steal thier money...

  8. #8
    This is really, really sad... I don't understand the need to defraud people, you may make more money, but it's got the be hard to sleep at night knowing what you've done...

  9. #9
    Join Date
    Feb 2004
    Location
    USA
    Posts
    1,572
    Originally posted by jubinrr
    i feel your pain,
    antoher fact is that all this scamming affects the rest of us quality web hosts, new comers get the impression that we're all bad and trying to steal thier money...

    very true indeed, he deserve it! now he can scam his jail mates

  10. #10
    People are out to make a quick buck, what they do not understand is nothing in life comes easy. True it is harder to build a high quality reputable business, but at the end of the day it is easy to sleep well knowing you did your best to provide a high quality service.

    Too many people take the easy way, take the less traveled path and good things will come your way.

    Derrick
    ResellerEdge.com - High Quality Reseller/ Multiple Domain Hosting.

  11. #11
    Join Date
    Mar 2004
    Location
    na
    Posts
    256
    One bad sheep is going to kill the whole flock. That's the tough part about building up reputation here to the newcomers. Service is something so virtual that you cannot let people to have a good gauge on your quality.

    Anyway, newcomers, please bear that in mind. Be an honest and trustworthy webhost and you will still be able to make your business big.

    Cheers

  12. #12
    Just for information, for those who dont know how the Kruchten scam worked:

    Step 1: You see adveretised a great service which provides everything - Java hosting, chat rooms on your servers, just about all types of software, all for $20 or $30. It sounds great and looks really professional. (I had total confidence, thinking I have really found someone who understands customers.)

    Step 2: You sign up and give your credit card number, thinking you are paying $20 - a mistake that will cause you much harm. You later find out that with a card number, a merchant can charge any amount.

    Step 3: You get terrible service, complain, and then cancel. (I cancelled within 24 hours after getting no access).

    Step 4: The customer is charged an amount determined by Kruchten. This can be anything. For me it was a "fine" for cancelling - $750.

    Step 5: Customer disputes charges, and is told to sue Pagecreators.

    Step 6: Customer refuses to pay the credit card bill and is sued by the card company (American Express in my case). Amex was told I was a "rogue customer" who refused to pay for service. Amex used three lawyers.

    After the FTC sued Kruchten, I got the help of the media for my story and Amex settled. Amex wrote off all bills, all legal fees, all interest, and paid £1000 ($1800) in compensation to me. Amex had pursued me so much, that the legal department agreed I should be paid compensation.

    This scam was very clever for the following reasons:

    - victims were situated in different regions. This meant that the local card companies had just one complaint and believed the customer was rogue

    - victims were selected with different card companies within a region (eg country, or state). This was so that the company's records showed one complaint only

    - victims were mixed in with legal transactions so an appearance of legal business could be maintained

    The scam was very effective and even though there were hundreds of victims, and millions of dollars involved, it took several years for anything to happen.

    For the victims it was the weakness of the system that surprised everyone. Once a merchant has your card number, literally any amount can be charged. - this could be a $1000, or $10,000. If the merchant is clever, as Kruchten was, it will be difficult to convince the card company the card charge is illegal.

    Bow whenever I consider paying anything I use a simple method which has worked several times:

    - go to Google and enter "company name" complaint. See what comes back. I tried this on a host recently and got back thousands of links. I didnt sign up. I even found a site dedicated to warning people about the host. Try this with AIT - "AIT complaint" and see what comes back.

  13. #13
    another thing you can search for at Google is - company name scam
    you will also want to see how long they've been in business.
    Adventures in Parenting.org - Are you a parent? Listen to the free podcast and sign up for the newsletter!

  14. #14
    Join Date
    Nov 2001
    Location
    The South
    Posts
    5,408
    And because of people like this <bad word> now if a customer so much as SNEEZES at his card company they'll chargeback "online" purchases for services (such as web hosting). We've had chargebacks from AMEX cardholders who were totally floored it happened and had not in any way asked AMEX to chargeback anything...
    Gary Harris - the artist formerly known as Dixiesys
    resident grumpy redneck

  15. #15
    Join Date
    May 2004
    Posts
    36
    its all because its getting easier and easier to scam with fraud credit card websites. Mind you, I couldn't do without my electronic transactions

  16. #16
    Sorry to say but thats what happens when your able to open a business on the internet. Some people feel that they don't need to provide quality service because they are not a brick and mortar establishment, so they will hide behind their computers taking peoples' money. The best thing to do is ask people on forums dedicated to hosting like WHT and see what other experiences have been like before you go with a hosting company. Just my two cents.
    data center directory - The comprehensive data center resource. Version 2.0 coming soon!

  17. #17
    Join Date
    May 2004
    Posts
    36
    Yes, isn't WHT awsome!! I give the same advice, ALWAYS CHECK OUT WHAT PEOPLE HAVE TO SAY FIRST!!!!

  18. #18
    Join Date
    Apr 2002
    Location
    UK
    Posts
    429
    Personally I think there's nothing to beat a personal recommendation or two from a company's existing customer(s). And that applies to any business.

    Length of time trading can be useful, but naff companies can trade for a long time too, and there's nothing to say that a company trading for 2 months isn't a good one.

    WHT feedback and Google searches can be useful, but the nature of the beast is that most companies get more bad feedback than good (folk are far more inclined to post a complaint than a compliment - basic psychology).

    Common sense can be useful too. Check out the pricing and if it looks too good to be true, it probably is.

    It is frustrating in this business particularly that a lot of good hosts find the reputation of their industry suffering at the hands of the scammers.

  19. #19
    Originally posted by Dixiesys
    And because of people like this <bad word> now if a customer so much as SNEEZES at his card company they'll chargeback "online" purchases for services (such as web hosting). We've had chargebacks from AMEX cardholders who were totally floored it happened and had not in any way asked AMEX to chargeback anything...
    In my opinion AMEX is the absolute worst CC Company to deal with.

    As for the fraud, at that period in time the bandwidth overages were the easiest to falsify and overcharge for. Today it is server resources and we see it all the time. People sign up for hosting, have their sites suspended for using too many resources and don't get their money back. In addition they lose any set up fees they may have paid.

    Sooner or later this will happen enough times for a Federal Lawsuit to come in and hand out some justice. Until then the saying "Buyer Beware" is not nearly strong enough to caution those people that are in the market to purchase web hosting to exercise due diligence in choosing their provider...

  20. #20
    I think the comment about sneezing is right (Dixie), that is the point. Kruchten played the system by claiming people were defrauding him.

    The chargeback systems works against honest traders, but criminals just invent facts - then the card company wont chargeback.

    I am contacting the DoJ trying to the max term for Kruchten (5 years).

  21. #21
    So it seems using a third party processor like paypal is safe as the amount charged is predetermined and the host doesn't has my card number...
    Wholesale Domain Prices for Retail Customers - Rushtoweb.com

  22. #22
    Join Date
    Nov 2001
    Location
    The South
    Posts
    5,408
    Originally posted by domainwala
    So it seems using a third party processor like paypal is safe as the amount charged is predetermined and the host doesn't has my card number...
    Yes if the host is untrustworthy this can help, at least they can't dip into your paypal account and grab funds without your consent, if you don't send it (or have a subscription to send it) then all they can do is ASK for the money.

    All bitching aside, this is one thing that is nice about Paypal.
    Gary Harris - the artist formerly known as Dixiesys
    resident grumpy redneck

  23. #23
    I am surpised to see people recommending Paypal, as it has attracted a lot of bad press, been fined, and been the subject of hundreds of complaints.

    I even saw today a site dedicated to warning people against paypal.

  24. #24
    Join Date
    Apr 2003
    Location
    Atlanta, Jawja
    Posts
    3,074
    Merrows, it all depends on what kind of volume you do with PayPal, how long you've been with them, how many chargebacks you've had levied against you, etc.

    I am very happy and one of the lucky few (I suppose) that's never had any chargebacks from either my CC processing company or my PayPal account. I am extremely picky with who I do business with, and all hosting orders are manually verified over the phone and via email.

    For my paid membership site, I don't do recurring subscriptions, that helps cut down on chargebacks, as well.

    It's all how you handle yourself with PayPal that will determine whether you have problems with them or not. I've been happy with them so far, and they've been "happy" with me.

    And yes, I know about the sites that are devoted to bashing PayPal. It's just the nature of the game. Anytime you have a large and/or popular business, you will always have a "Businessname SUCKS" type site for it... just look at AOL. Look at Verizon (I hate them passionately).
    Doug Hazard - "retired" Web Hosting Master
    * Full Stack (Web/WP) Dev for The Catholic Diocese of Richmond (160+ sites)
    * Sports Photographer, Media Personality and CFB Historian
    * Tech Admin for several Sports Networks/Sites

  25. #25
    Join Date
    Feb 2004
    Location
    USA
    Posts
    1,572
    Originally posted by TRN Douglas
    Merrows, it all depends on what kind of volume you do with PayPal, how long you've been with them, how many chargebacks you've had levied against you, etc.

    I am very happy and one of the lucky few (I suppose) that's never had any chargebacks from either my CC processing company or my PayPal account. I am extremely picky with who I do business with, and all hosting orders are manually verified over the phone and via email.

    For my paid membership site, I don't do recurring subscriptions, that helps cut down on chargebacks, as well.

    It's all how you handle yourself with PayPal that will determine whether you have problems with them or not. I've been happy with them so far, and they've been "happy" with me.

    And yes, I know about the sites that are devoted to bashing PayPal. It's just the nature of the game. Anytime you have a large and/or popular business, you will always have a "Businessname SUCKS" type site for it... just look at AOL. Look at Verizon (I hate them passionately).

    hehe, very true indeed, i hate microsoft passionately

    i use paypal as a second option when people really want to use it, i prefer a merchant account anyday over it, gives you much more control..

    cheers

Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •