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  1. #1
    Join Date
    Apr 2001
    Location
    Montana USA
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    673

    Exclamation My right to charge your card...

    Without a signature, I am under the assumption that a hosting provider has no right to charge a customer's card at all, hence the ease with which customers can do chargebacks without Visa/MC blinking. Ok, fair enough. Hosts are stuck.

    Anyone have any experience with a customer claiming that the host ALSO owes them for the overdraft fees they incurred when they didn't pay your bill and the host charges their card (as detailed in the host's terms of service, agreed to during signup)?
    John Masterson
    Former Hosting Company Owner

  2. #2
    Tell them the reason and amount they are charged whenever you do that.
    AceWebHosting.Com
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  3. #3
    You do not need to have a signature for the charge to be valid. Where I work we charge credit cards quite often for phone orders and have never ahd a customer successfully dispute off a charge soley on the fact that we didn't have a signed receipt.

  4. #4

    No Signature

    Magnafix,

    Is that possibly due to the fact they are being recorded and are sent thru a verification recording? As with hosts all we would have is an IP number so if anyone has any better way of getting an ELECTRONIC signature that will help reduce on the fraudulent charges that would greatly be appreaciated. I know that with the new 3 digit number that is supposed to reduce fraud but if someone has your card then they have that number aswell.

    Thanks
    Tom
    DWS CENTER LTDA--http://www.dwscenter.com
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  5. #5
    Join Date
    Apr 2001
    Location
    Montana USA
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    673
    To clarify... this customer doesn't dispute that they signed up, agreed to our terms, and have hosted a website with us for most of the year. Their claim is that because they chose manual billing (email invoice on the 1st, they send a check prior to the 20th), and despite our terms which say that if you're late we'll charge your card, our terms are themselves illegal and we must refund not only the charges, but also the overdraft fees they suffered when we charged their (debit) card.
    John Masterson
    Former Hosting Company Owner

  6. #6
    Join Date
    Jun 2001
    Location
    Cheltenham
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    2,617
    Originally posted by magnafix
    To clarify... this customer doesn't dispute that they signed up, agreed to our terms, and have hosted a website with us for most of the year. Their claim is that because they chose manual billing (email invoice on the 1st, they send a check prior to the 20th), and despite our terms which say that if you're late we'll charge your card, our terms are themselves illegal and we must refund not only the charges, but also the overdraft fees they suffered when we charged their (debit) card.
    who has told you that it is illegal? if they breach the terms, and have supplied you with a card details you should have every right.

    in regards to incidentals that would only be payable by you if it was proven that you had no right to bill them. which you do, as they have not paid their bill by normal means.

    i speak as an account manager for a high street bank, not as a web host.
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  7. #7
    Join Date
    Apr 2001
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    Montana USA
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    Only the customer says our terms are illegal, so we're not exactly quaking in our boots, but we're not thrilled about the prospect of defending against a lawsuit and losing. Thanks for your insights.
    John Masterson
    Former Hosting Company Owner

  8. #8
    Join Date
    Jun 2001
    Location
    Cheltenham
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    Originally posted by magnafix
    Only the customer says our terms are illegal, so we're not exactly quaking in our boots, but we're not thrilled about the prospect of defending against a lawsuit and losing. Thanks for your insights.
    there wouldn't be a lawyer in the uk that would touch that. though i supose in america people sue for anything. though if he agreed to your terms, i'm not sure he has much of an option.
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  9. #9
    Join Date
    Apr 2001
    Location
    Montana USA
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    Right, but my rudimentary understanding of contract law says that a contract is not binding if it's illegal. You can't have a binding contract making someone your slave, or to deliver marijuana. So, if our terms are illegal, they needn't be abided by. Wheee, lawyers....
    John Masterson
    Former Hosting Company Owner

  10. #10
    Join Date
    May 2001
    Posts
    697
    Your terms are definitely not illegal. The only thing the signature does is to prove that the person authorized the charge. Note: Just because you do not have a signature does not mean that they did not authorize the charge.

    From my understanding, this person authorized you to charge their card by agreeing to your TOS, so you have no liability for their overdraft charges.

    Think of it this way... you go to a bar and open a tab with your credit card. You then decide after a few beers to leave and forget to close out the tab. The bar has every right to bill your card even if you never come back to pick up your card or sign the reciept.

    Your user opened a tab with you (with their cc) and then forgot to pay with an alternative method so you simply did what the bar would have done and ran the charges through.

    Anyway... the user probably will win if they dispute the charge (if you have no signature or proof of delivery of the product, you are pretty much out of luck). However there is no way they will ever get the overdraft charges back.

  11. #11
    Join Date
    Aug 2002
    Location
    England
    Posts
    145
    Well that doesn't sound like an illegal or unreasonable contract to me. I'd write to the customer and tell them that defrauding a company out of the funds they are rightfully due for providing the service *is* illegal and ask how they plan on paying the money they owe.

    The other option if this customer is still with you, I'd issue a refund to their credit card, delete their account and write the whole thing off as a bad experience and bad debt.

    From now on if someone wants to pay like that, get them to sign the agreement and fax it to you.
    Josh Powell.
    ServerSpotCheck - Is your website down?
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  12. #12
    Join Date
    May 2001
    Posts
    1,593
    Just as an example: Paypal entice its users to pay by bank transfer (cheaper than credit card), and gives the money to the seller instantly. Since the money can't be transfer immediately, paypal is paying the seller first and waiting for a few days for the payment to arrive. As a safety, paypal will charge your credit card if your bank transfer does not go through.

    This is similar to this case where if a host doesn't recieve payment (in check or other forms), the host can charge the credit card. If paypal does it, I would assume it is legal for the hosts to do it as well.

    Peter

  13. #13
    Well, I think that PayPal gets away with a lot of stuff these days - I really doubt that all of them are completely legal.

    As for the lawsuit, I'm sure that the customer is simply bluffing. Realistically, a $100 claim isn't worth a lawsuit, so he's simply trying to push you.

    The best thing to do would be:

    1) Issue a refund for the remainder of the term
    2) Let him know about it
    3) Wait 1 week and then delete his account
    4) Let him know about it again.

    Boris

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