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  1. #1

    What to do. We are in a Fix

    One of our resellers that bought accounts from us and then resold them has virtually disappeared. They have around 20 reseller accounts with us.

    They have not paid their dues for the last 2 months for all these accounts. There is no way to contact them. They also had some servers for their other hosting needs which courtesy to WHT i have learned have been shut down and their clients are currently creating a ruckus on WHT.

    The question is what should we do because we are walking a thin line we have still not suspended a single account and are still waiting for them to reply we can go ahead and suspend/delete the accounts of our servers which is the easy way out but it will create more problems for their customers and another long thread on WHT.

    Are there any solutions here other then that?

    Also people do not tell me that you know who that other company is because at this point we are unable to deny/accept anything in that regard.

  2. #2
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    I dont understand fully what you are after.. But here's my question, in your Hosting TOS, do you have a rule saying you can suspend an account if they havent paid for 30 or 60 days or something? Because this scenario will depend greatly on your Hosting TOS..

    Zac
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  3. #3
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    If you've used all available means to get in touch with them, and they have not responded, and are also 2 months past due, then you are certainly within your rights to cancel their reseller account and seize the 20 accounts they had provisioned.

    Just ensure that you have documented all of the steps taken to try to get in touch with them.
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress Joomla OpenCart Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  4. #4
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    well if you know who the 20 clients are...and if you can/would like to help them why don't you contact them...maybe you even can get some business but again you would help them very much

  5. #5
    That is the big question, we do not think we can contact them directly.

  6. #6
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    when you say "we do not think we can contact them directly" do you mean

    we think we may not (because of the legal aspects) or you are unable to figure out who it is...but i guess it's the frist one since you have their web sites and have their contact info from the web sites

  7. #7
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    Quote Originally Posted by ChaoticSilence
    That is the big question, we do not think we can contact them directly.
    The bottom line is that the reseller is 2 months behing on payments, and you cannot get in touch with him/her. Technically, you now have legal rights to those 20 clients.

    Talk with a lawyer if it makes you feel better, but if someone stops paying for something, they no longer own it or the benefits it provides.
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress Joomla OpenCart Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  8. #8
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    GlobalWebDan is right...the only question is if you are trying to help the 20 clients. And what I would do is just back the files up and store them somewhere someone might be *mega* thankful for that at some point.

  9. #9
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    If the reseller has not paid, any sites you host for them become your responsibility. Contact the customers and explain what's going on and give them the choice of either using your services directly or having their account closed.

    Maybe one of them has contact with the reseller.
    Mike
    cPanel/WHM scripts at Premier Website Solutions (all your website needs)
    Support young figure skaters in training. juniorskaters.com

  10. #10
    Ok thanks for all the advice here.

  11. #11
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    If you had a reseller agreement with your reseller that prohibits you from contacting his customers (as you should) then you can not contact them and violate that agreement. Whether it makes sense from a moral standpoint or not, you are leaving yourself open for litigation.

    You have a responbility to your own company, first and foremost, and that is to serve only those who have paid for your services. It is unfortunate that the reseller has disappeared, of course, but you should not take that as an opportunity to violate a legal contract.

    The fact that the client resold reseller accounts make no difference. I assume you would not contact one of your resellers end users if the reseller is about to be suspended, the same courtesy should be extended to the extra tier of clients. Unfortunately this is a side affect of having that additional tier that sub-reseller accounts bring in to play.

    To add to this: I do agree with chicagoaddi that you should archive/backup the files/sites in question. If someone comes to you and asks for the files, then you can take it from there. Initiating that process yourself though would be a mistake, in my opinion.

    Quote Originally Posted by GlobalWebDan
    The bottom line is that the reseller is 2 months behing on payments, and you cannot get in touch with him/her. Technically, you now have legal rights to those 20 clients.
    Wrong. He has no legal right to those 20 clients whatsoever. How you come to that conclusion is beyond me, but it is wrong. There is no contract between the 20 clients and ChaoticSilence's company and therefore no legal binding.


    Simon
    Last edited by IHSL; 10-09-2006 at 10:47 AM.
    EIRCA Ltd, home of The Genius Network.

  12. #12
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    IHSL, I assume you have not consulted legal counsel on this. I have, and based on my preliminary consultation, the OP would be within his/her rights to "seize" the accounts.

    Again, the OP may wish to check with his or her own legal counsel, just to be safe, but based on what I know from this thread, the OP would be within his/her rights to go ahead and proceed as others have advised.
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress Joomla OpenCart Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  13. #13
    Your client has run off without paying for 2 months, the risk of being sued is rather slim.

  14. #14
    We have decided to wait for a week more, before taking any action.

  15. #15
    I have got to agree with IHSL, you are not permitted to deal with your reseller end user clients.

    GlobalWebDan, I am not certain what lawyer you spoke to and in which country, State or Province (and laws certainly do vary) - however, there are generally very specific precendents that have been set between vendors and reseller channels out there (and certainly in North America) - companies used to utilize VAR channels as avenues of growth and simply take VAR customers - a whack of anti-trust laws have been established to prevent just such a thing...

    Ask any DataCenter if they can seize their dedicated server end user clients for lack of payment. The best you will get as an end user on a server that has not paid their bill is access to backup files upon request.

    A DataCenter would much prefer to seize a server and its customers and then turn around and sell that "business" to a different paying customer - get a dedicated server with x customers for $a + $b per month.

    If you wish to keep the end users, you will need to contact the owner of the reseller account (and the legal owner is the person or company who appears as the "Bill To" for the account - just like your phone bill for example) - and work our some sort of contract for sale of those accounts to you. Once this has been done, then you are well within your rights to contact the customers directly and maintain the relationships (BTW, the amount of the sale is irrelavent - if the former owner just wants the customers taken care of, a $1 sale would do the trick)

  16. #16
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    Quote Originally Posted by GlobalWebDan
    IHSL, I assume you have not consulted legal counsel on this. I have, and based on my preliminary consultation, the OP would be within his/her rights to "seize" the accounts.
    You need a new solicitor. That one is going to get you in trouble. Serious trouble. Clearly he is not versed, as Andrew said above, in anti-trust laws. You would be in violation of many of them. Add to that the fact that these customers may take offense to you mining their information and you have a slew of possiblities, not many of them being positive.


    The possible cons of contacting these clients far outweigh the pros.


    Simon
    Last edited by IHSL; 10-09-2006 at 11:53 AM.
    EIRCA Ltd, home of The Genius Network.

  17. #17
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    Sorry, I do not wish to argue about this - I'm just relaying what I've been told. Again, the OP may wish to talk to his own legal counsel before making a decision - I know that I would if I were in his position.

    No hard feelings...
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress Joomla OpenCart Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  18. #18
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    Might want to think about adding some language to your TOS that covers this in the future.

  19. #19
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    I may be over simplifying your situation ?

    but I would 'copy all websites as of now.
    suspend your resellers account, with a 'special' suspended page:
    Account of 'XYZ.con' Suspended
    Any customers who hosted with 'XYZ.com' that
    wish to rescue there websites,
    should contact: GlobalWebDan.

    then
    a. you are offering to help
    b. the customers will be contacting you, not the other way around.
    c. the phantom reseller can see you are not to be trod on like this.
    d. the lawyers will have to get there money elsewher.

    best of luck anyway, unfortunately some 'mud' is going to land on you as a result of your resellers behaviour.

    I hate business behaviour like this, if the resellers going/gone down the pan, he should at least have the b*lls to tell you & his customers.

    Brian

  20. #20
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    Good advice, except you mixed up one thing: I'm not the OP! ChaoticSilence is!
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress Joomla OpenCart Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  21. #21
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    Quote Originally Posted by GlobalWebDan
    Good advice, except you mixed up one thing: I'm not the OP! ChaoticSilence is!
    oops, gone senile !

  22. #22
    Legal issues aside, I think the issue here is of ethics and stated policy. Should the OP have a written policy (TOS) stating such action could be taken, accepted by client, such action would be fine.

    In the absence of such a policy, the issue would become one of ethics and reputation. (legal battles have never stopped any course of action, however ethics & reputation are another matter.)

    In the end, little money today could cost you big money tommorow. A correct decision today can get you big money tommorow.

    Personally, I'd loose the money and build reputation & credibility.

  23. #23
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    You should listen to IHSL and CartikaHosting.

    You have no right to contact or take the accounts of a reseller.

    You can land yourself in all kinds of legal trouble, what if the guy is in the hospital somewhere and you take all his clients? When he gets out he is going to sue you for stealing is business.

    Now you do have the right to suspend those accounts and if they contact you direct as a result and ask for hosting you can give it to them or give them their files. But doing anything past that is playing with fire.
    Plus as WindsOfChange pointed out there is also a moral and ethical obligation here to consider.

    You don't want that reseller coming back a month or two later posting all over the net how you stole his business out from under him. That is not a reputation you want to have when people do a google search on your business.

  24. #24
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    Heh,
    if the guys in hospital (or even worse) someone SHOULD be thankful if you look after the customers, your not stealing them, you can give them back whenever/ifever it makes sense.

  25. #25
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    I would suspend his account and leave some contact information on the suspend page. That way, the resellers clients can get in touch with you to recover backups, and at their own will, they could contact you and get hosting.

    The priviledge of private reselling was nullified when he stopped paying for his services. I don't see how a non-paying client could possibly sue you for making contact with his clients.

  26. #26
    I don't see how a non-paying client could possibly sue you for making contact with his clients.
    Because the provider is just that, a service provider - and they have no rights to their customers business. The reseller provider is just a vendor of the business - their only rights are to suspend service for reasons as specified in their TOS. They cannot use trusted information which they have access to - to take their clients business - ie) the basic procipals of the term and the laws surrounding "anti-trust"

    This is no different then taking over an end users web site because they didnt pay their bill - you simply cannot do this...

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