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  1. #1
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    Colo Customer Unreachable and Past Due

    In short, we've tried for months to contact a client and he's basically fallen off the face of the earth. Emails were originally received by his mail server, but now they bounce. His phone used to ring and we could leave voicemails, but now it goes straight to voice mail. I have a weird hunch he passed away or went to prison or something. We haven't heard from him in about 45 days.

    He has pretty expensive hardware that any reasonable person would want back, but it's eating up a lot of space on the rack considering it's unpaid for.

    So here's my question to other providers: When a colocation customer is completely unreachable (phone, email, etc) and way past due, what do you do with their hardware?

    And customers: what would you want done with your hardware?
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  2. #2
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    Do you have a contract with the customer? What does the terms of the contract say?

    We pull the equipment, if after 90 days payment (undisputed) is not resolved, we reserve the right to do with the equipment as we wish, which normally entails it's destruction.
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  3. #3
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    If they're not upholding their part of the agreement, you need to do what you gotta do to keep your business afloat. Reclaiming hardware is pretty common for deadbeat customers. You may want to try to send a certified letter or something to cover your ... That will require a signature and you'll at least get some sort of acknowledgment from someone.

    EDIT: Also, if you have not already turned off their gear (or their uplink or whatever you can do to get them to notice), you should do that and give them some time to respond to that.

  4. #4
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    OK, a tough one for you to call. In my experience, I would write them a letter giving them 30 days to respond with the contents like:

    "If you are having trouble paying for your services please contact us to make other arrangements. We understand that sometimes companies can fall on hard times but ignoring bills and requests for payment will only make matters worse. Please contact us by telephone or mail to make alternative arrangements for payment otherwise we will have no choice but to remove your hardware from our racks and store it safely in our secure data centre."

    After 30 days and still no reply then it's time to get tough:

    "After repeated messages and attempts to contact you we have no other choice but to remove your server from the racks in 30 days from this message. We will reduce the cost of your co-lo to 50% whilst it is noth connected to out hardware as a storage fee, after 6 months we will have no other choice but to sell your hardware to cover the costs of the outstanding fees for co-location and the costs of administration and selling fees. It is in your very best interests for you to contact us in this matter as this is now very serious. Please do not ignore this request as failure to do so will result in your hardware being procured by the company to pay off the debts in question."

    I think anyone who receives these messages will both think you are serious and sincere about your requests for payment. You must give them reasonable times to reply to the emails. Effectively I presume the hardware is located in your rack in a datacentre making the hardware this company or person owns responsible for reimbursing you for the fees involved in manageing someones server in your rack. Also do not give them a way of removing it until ALL the fees in question are paid in some form. Or even if you come to an agreement to write them off in a gesture of good will if he has went belly up and offer him to collect his server after you remove it from your rack.

    I Like to be nice and work with people as it wouldn't be the first time a customer of mine had problems paying for services and we kept them up and running for as long as we could until he eventually paid up in a payment plan for the outstanding fees.

    Hoe this helps
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  5. #5
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    wow, by the time i posted the above post 2 other ppl got there before me....LOL

    All I can say is the law is pretty specific about equipment procurement through financial disputes in the UK here, you must be very carefull and probably be seeking legal advice if you have not already done so before you go and destroy or remove any hardware.
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  6. #6
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    Quote Originally Posted by amc-james View Post
    EDIT: Also, if you have not already turned off their gear (or their uplink or whatever you can do to get them to notice), you should do that and give them some time to respond to that.
    It's been powered off for a while now. It's just deadweight on a rack.

    Thanks for your input everyone, they're all high quality replies.
    BudgetVM - The Virtualization Experts
    Mike Gazzerro, Account Manager
    Chicago, Miami, Dallas, Los Angeles
    Wholly owned by Enzu Inc., an Inc500 Company.

  7. #7
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    Quote Originally Posted by sirius View Post
    ...which normally entails it's destruction.
    Haha! Reminds me of the fax machine bit in Office Space.

    Anyways, if they don't respond to reasonable attempts to contect them, their servers getting shut off, certified mail, etc...I would then (assuming my TOS allows it) wipe their drives and attempt to sell their equipment to recoup my losses in non-payment.
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  8. #8
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    I would look into state laws where the DC is at or hte customer is located for abandoment of hardware or goods. If you do hte wrong thing it could be considered theft on your part. According to some state laws you would have to store the hardware for a given amount of time usually 30-90 days and then it would be considered abandoned and you can do what you want after that with it.

    Like another poster said seeking legal advice here may not be a bad idea if the hardware has some value like you said.

  9. #9
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    Quote Originally Posted by zomgmike View Post
    It's been powered off for a while now. It's just deadweight on a rack.

    Thanks for your input everyone, they're all high quality replies.
    You are welcome
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  10. #10
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    Quote Originally Posted by sirius View Post
    Do you have a contract with the customer? What does the terms of the contract say?
    Just realized I hadn't answered that yet. It's a month to month contract with no provision for this situation. There is nothing in our Terms of Service which specifically applies to this kind of situation. I've checked other colo providers' Terms of Service, but I don't see anything specifically referring to a situation like this.

    Has anyone had this happen before?
    Last edited by zomgmike; 04-16-2008 at 02:47 PM. Reason: clarification
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  11. #11
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    Call the local law in his area and ask them to do a courtesy call to the address. I have had to do that before. You are most likely to find out something has happened to him. It is a perfectly legal procedure to determine what your next move should be, and law agencies are more than happy to do such requests. They find a lot of people this way who live alone, and have passed away in their homes without notice by anyone.

    Take for example, Vonage is slow to shut people off, but it requires a connection. If his cable was disco'd, his vonage would go straight to voicemail. Just my thoughts on it..

  12. #12
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    Quote Originally Posted by WickedShark View Post
    I would look into state laws where the DC is at or hte customer is located for abandoment of hardware or goods. If you do hte wrong thing it could be considered theft on your part. According to some state laws you would have to store the hardware for a given amount of time usually 30-90 days and then it would be considered abandoned and you can do what you want after that with it.

    Like another poster said seeking legal advice here may not be a bad idea if the hardware has some value like you said.
    I would check up on this as this may be your only means but ultimately get legal advise from a solicitor. Just incase you need to proceed differently as the law does vary from country to country and state to state.
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  13. #13
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    Interesting. I've seen cases like this before. Here in NJ, unless there is a court order in place not to touch the hardware, you can do as you like with it if the client does not pay. You are in no obligation to provide services for non-payment. Not sure about IL or where ever this rack is.

    If rack space is at a premium for you guys, then unrack the equipment and keep it aside in a storage or something. Whenever the client comes back, make them pay for all the pending balances and then give the hardware back. If the client does not come back even after 6 or so months, then I guess you can think about what to do then.

    The reason I am not saying discard it or lease it to your clients is because of Murphy's law. Right after you discard or lease it, I'm sure the client will give you a call saying "Ok, I will pay all my pending balances, let me just take my hardware. I was in [excuses I've heard are; hospital, vacation, tornado, hurricane, earthquake, you name it] and couldn't make the payment".
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