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LeaseWeb: Weird billing practice

LeaseWeb: Weird billing practice

elos42elos42 Member

So, here I was listening to everyone here about how good Leaseweb was etc..

So decided to give it a try, thinking, let's see if the server is actually any good.

First thing I noticed was that unlike DO, Linode, Amazon etc, these guys have a minimum term of 1 month.

But I thought, if it's really that good, then it should work. So I paid $10 and took a VPS.

Unfortunately, the CPU was not powerful enough. It was sort of middling. After after a couple of hours, the VPS was of no use to me.

But since I'd already paid for 1 month, I thought I'd let it hang around till the end of the billing period.

Big Mistake!

I get a new invoice a day after the one-month period was over.

So I ask them what that's for. This is what they said:

You ordered your VPS in early April, and paid for 1 month upfront. But that payment was for the period from May1 to May 31. You haven't paid us for April!

So I said, I have canceled for May. I don't want it for May. So they're like: "Doesn't matter, the money you paid us initially was for May. But you used in April. Pay us for April."

I mean, seriously, what kind of accounting is that? The whole thing would have cost me a couple of cents on other providers, and I was willing to pay for 1 whole month to test out their server. But charging me for nearly two whole months, saying the initial payment was for the second month, and the first month has to be paid etc. doesn't sound very fair to me.

Anyone else ran into any such issues?

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Comments

  • hostdarehostdare Member, Provider

    seems like netcup ? probably leaseweb is german

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  • elos42elos42 Member

    Leaseweb is Dutch I think.

  • elos42elos42 Member

    In effect, their policy is -- we'll charge you for this month and the next even if you want to use for an hour. Here I was thinking charging people for 1 month for doing a 10 minute test was unfair.

  • dedipromodedipromo Member

    elos42 said: Here I was thinking charging people for 1 month for doing a 10 minute test was unfair.

    I would say that charging 1 month for a 10-minute usage is fine, as that is indeed a monthly paid service. Charging 2 months, however, is a bit insane.

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  • ShazanShazan Provider

    @elos42 said: I get a new invoice a day after the one-month period was over.

    Did you ask for a termination after those 10 minutes and before the next billing period? If not, then it is normal that they invoiced you another month after the first one.

    Also, nowhere on their site they advertise hourly billing, I don't see anything weird in their billing practises.

  • elos42elos42 Member

    Shazan said: Did you ask for a termination after those 10 minutes and before the next billing period? If not, then it is normal that they invoiced you another month after the first one.

    It's a prepaid service. They give you the service only if you pay for it in advance. The usual practice in such cases is to terminate the server when you run out of balance. You can't have a prepaid service, and then say, we kept extending your contract on credit and now you owe us all this money!

  • ShazanShazan Provider

    No, it doesn't work like that. It is prepaid but you have to request for termination when you don't want to use it anymore.

  • elos42elos42 Member

    And if I don't?

    @Shazan said: No, it doesn't work like that. It is prepaid but you have to request for termination when you don't want to use it anymore.

  • @elos42 said: And if I don't?

    @Shazan said: No, it doesn't work like that. It is prepaid but you have to request for termination when you don't want to use it anymore.

    You get charged

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  • elos42elos42 Member

    It's paypal. How do I get charged?

  • FoxelVoxFoxelVox Member

    If you dont pay, Leaseweb wont hesitate to put Some debt collectors to work

  • elos42elos42 Member

    seriously? you think they're gonna send a debt collector from Holland to India to collect $10?

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  • ZweiTigerZweiTiger Member, Provider

    @elos42 said: seriously? you think they're gonna send a debt collector from Holland to India to collect $10?

    of course! Just like netcup with a customer from china.

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  • NekkiNekki Member

    @elos42 said: seriously? you think they're gonna send a debt collector from Holland to India to collect $10?

    No, they’ll sell the debt to a local collection agency, who will then add their fees onto the $10.

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  • FR_MichaelFR_Michael Member, Provider

    @hostdare said: seems like netcup ? probably leaseweb is german

    Not every german company is close to scam ;)

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  • elos42elos42 Member

    That sounds like a plan.

    While everyone else ensures that a customer halfway around the world has a prepaid balance big enough to cover the bills (and cancels servers when the balance runs out), Leaseweb relies on recovery agents across the world?

    Nekki said: No, they’ll sell the debt to a local collection agency, who will then add their fees onto the $10.

  • NekkiNekki Member

    @elos42 said: That sounds like a plan.

    While everyone else ensures that a customer halfway around the world has a prepaid balance big enough to cover the bills (and cancels servers when the balance runs out), Leaseweb relies on recovery agents across the world?

    This is their model and it clearly works for them. You didn’t read the terms, life sucks, get a helmet.

  • ClouviderClouvider Member, Provider

    @elos42 said: That sounds like a plan.

    While everyone else ensures that a customer halfway around the world has a prepaid balance big enough to cover the bills (and cancels servers when the balance runs out), Leaseweb relies on recovery agents across the world?

    Nekki said: No, they’ll sell the debt to a local collection agency, who will then add their fees onto the $10.

    Nope, you came to someone's home with muddy shoes on and started spitting on the walls, there are consequences for this kind of behaviour.

    You've signed a contract and now you're trying to wriggle your way out of it. Businesses catering to professionals usually require minimum terms. Any recurring service, be it a server or a mobile phone requires a cancellation. Even Digital Ocean does - if you simply power it off you still get charged, you need to terminate it - they just give this button a different name - true, they don't require an advance notice, but they then provide a different service.

    Pay up, or you'll find yourself shelling our hundreds when you're charged for every letter, attempted phone call and eventually court costs and recovery costs if you keep ignoring it.

    For the avoidance of doubt - this is solely your mistake here. Hope it teaches you a lesson to read what you sign and then respect the contract you signed.

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  • elos42elos42 Member
    edited May 9

    You don't really get it. In today's world, you can't rely on such 'gotchas' in the contract to get people to pay for more than 1 month at a minimum, when your rivals are charging by the hour.

    It makes zero business sense. Do you think I'm going to order another server from them in the future? Do you think I'll recommend them to any of my clients? Is that loss of good will (through such a clause) really worth the $10 they might make by including such gotcha clauses in their lengthy contract letters?

    This seriously is not about the $10 they stand to make via legal action. This is about the $1000 or more they could have made by being more sensitive to this customer's needs. In other words, not everyone wants to pay for 1 or 2 months just to test a server with them.

    I also doubt whether they are running their business to teach a lesson to developers about reading lengthy contracts and EULAs.

    @Clouvider said:

    @elos42 said: That sounds like a plan.

    While everyone else ensures that a customer halfway around the world has a prepaid balance big enough to cover the bills (and cancels servers when the balance runs out), Leaseweb relies on recovery agents across the world?

    Nekki said: No, they’ll sell the debt to a local collection agency, who will then add their fees onto the $10.

    Nope, you came to someone's home with muddy shoes on and started spitting on the walls, there are consequences for this kind of behaviour.

    You've signed a contract and now you're trying to wriggle your way out of it. Businesses catering to professionals usually require minimum terms. Any recurring service, be it a server or a mobile phone requires a cancellation. Even Digital Ocean does - if you simply power it off you still get charged, you need to terminate it - they just give this button a different name - true, they don't require an advance notice, but they then provide a different service.

    Pay up, or you'll find yourself shelling our hundreds when you're charged for every letter, attempted phone call and eventually court costs and recovery costs if you keep ignoring it.

    For the avoidance of doubt - this is solely your mistake here. Hope it teaches you a lesson to read what you sign and then respect the contract you signed.

  • I get the part that you need to cancel the VPS service to actually cancel the contract with them and for the recurring bill to stop...but can anyone explain the fact that OP signed up for April, paid the initial invoice, but the payment (it turns out) is actually for the month of May? I don't get it...

  • elos42elos42 Member

    their point is that their billing cycle is from 1st to 1st. So they charged a full month from me, and because April wasn't a full month, the charged amount was for the next full month. Or that's what I could make out from their letter. Could be that the executive mailing me was totally confused as well, because I got the second invoice exactly a day after one month had passed from the date of ordering, and not on May 1.

  • HoostHoost Member, Provider
    edited May 9

    @pullangcubo said: I get the part that you need to cancel the VPS service to actually cancel the contract with them and for the recurring bill to stop...but can anyone explain the fact that OP signed up for April, paid the initial invoice, but the payment (it turns out) is actually for the month of May? I don't get it...

    Explanation must be in the providers terms or a specific contract between the provider and OP.

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  • AkitoAkito Member

    TOS. 10.4c comes in here I think:

    10.4 Unless specified otherwise in the Order Form/Order Confirmation, Leaseweb will invoice: a) the purchase price of any Equipment sold by Leaseweb to Customer, upon the Order Start Date of the Order; b) setup charges, Service activation charges and any other nonrecurring initial charges, upon the Delivery Date or upon the Order Start Date, whichever is earlier; and c) **all recurring Service Charges, e.g. with respect to the usage of Bandwidth and/or Data Traffic, as of the Delivery Date or the Order Start Date (whichever is earlier), and monthly in advance thereafter**, with the exception of use of Services above the agreed levels of Service and/or additional services which will be invoiced monthly in arrears. 10.5 In deviation of Clause 10.4a), Leaseweb may require Customer to make a pre-payment to Leaseweb in relation to any Equipment purchased by Customer from Leaseweb.

  • elos42elos42 Member

    For the record, there are many VPS providers who do monthly billing. Example OVH. You order a VPS on the 10th and pay 1 month fees, you get it till 9th of the next month. Before the 9th of the next month, they generate a new invoice and send a you reminders that your server is about to expire etc. And if you don't pay the invoice, they simply delete your server. They don't send a long legal contract that you signed that showed a clause that the payment received was not for the first month etc.. I paid X dollars, I got 1 month worth of service. Didn't pay any more, and didn't receive any extra service. Simple.

  • @elos42 said: their point is that their billing cycle is from 1st to 1st. So they charged a full month from me, and because April wasn't a full month, the charged amount was for the next full month.

    What was the contract term you chose during checkout? Because if it's a monthly contract, that explanation wouldn't make sense because [that explanation means that] there is an assumption that you won't be cancelling the VPS by May (next billing cycle) and therefore they'll just apply your April payment to your May bill out of convenience. But the rub lies if you cancelled by May...

  • ClouviderClouvider Member, Provider

    I don’t think they want a Customer that cannot follow simple contractual rules they signed, so it’s a win-win.

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  • elos42elos42 Member
    edited May 9

    This is what they have said: The remaining amount of xxx that needs to be paid is the one time fee. This is for the usage from xx-04-2018 to 1-5-2018. This has been added to the May invoice.

    and they go on to point out that I have indeed paid my invoice for May when I signed up. But not for the above period.

  • elos42elos42 Member

    They offer only monthly terms for VPSes.

    @pullangcubo said:

    @elos42 said: their point is that their billing cycle is from 1st to 1st. So they charged a full month from me, and because April wasn't a full month, the charged amount was for the next full month.

    What was the contract term you chose during checkout? Because if it's a monthly contract, that explanation wouldn't make sense because [that explanation means that] there is an assumption that you won't be cancelling the VPS by May (next billing cycle) and therefore they'll just apply your April payment to your May bill out of convenience. But the rub lies if you cancelled by May...

  • elos42elos42 Member
    edited May 9

    You seriously think this is a "simple contractual rule"?

    This is the contract they said is applicable. Where exactly do you find this 'simple contractual rule' that warns me that the one month payment I am making initially is for the next month, and that a bill for April has to be paid in addition?

    https://www.leaseweb.com/sites/default/files/Legal/SG_ENG_B2B_General_Conditions.pdf

    If it's that simple, it must be fairly easy for you to locate.

    @Clouvider said: I don’t think they want a Customer that cannot follow simple contractual rules they signed, so it’s a win-win.

  • FalzoFalzo Member

    @elos42: did you cancel the service before end of the first billing cycle via their control panel or not? simple as that.

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  • pullangcubopullangcubo Member
    edited May 9

    @elos42 said: They offer only monthly terms for VPSes.

    No, I think you can sign up for 1, 3, 6, 12, 24, and 36 month contracts

  • solairesolaire Member
    edited May 9

    elos42 said: You don't really get it. In today's world, you can't rely on such 'gotchas' in the contract to get people to pay for more than 1 month at a minimum, when your rivals are charging by the hour.

    No, you don't get it. I understand your point, but the fact that your opinion suits most hosting providers way of working, doesn't automatically make it a rule of any kind. What they're doing is perfectly legal, and just because it doesn't suit your expectations doesn't make it "weird", uncommon at most.

    As a fellow Dutchy, I can confirm that this is a common way to sell services in the Netherlands, and Europe in general. If I sign up for a mobile contract on a 1 month term, and I don't pay after 1 month then my contract doesn't get automatically terminated. I have to call them, or send them a letter, to say that I wish to cancel my service. With Leaseweb, all you apparently have to do is press a button that says "cancel my service".

    I've had a similar experience with Virmach, they charged me because I didn't terminate my service and assumed they'd cancel it on non-payment. I was wrong, I learned a lesson and I paid the invoice.

    It's only 10$. Much more expensive lessons are inevitable.

  • elos42elos42 Member
    edited May 9

    It's not really $10. More like $7 because it's a part payment for April.

    But just because something is 'normal' in Europe doesn't make it a rule of some kind elsewhere.

    What matters is the written contract. I didn't find this rule about 'what you pay initially will only be counted towards the second month's fees' bit in the contract. Did you?

    @Falzo Your question is irrelevant, because according to them, my first term is from May 1 to May 30, not from April 8 or whatever. The usage in April is covered by what they call a 'one-time fee'. So I can't cancel before the end of first term and not expect to pay for April or May.

    Like someone said, this would have been perfectly fine if I'd continued for more than two months.

  • solairesolaire Member

    elos42 said: But just because something is 'normal' in Europe doesn't make it a rule of some kind elsewhere.

    It does, because if you're doing business with a company in Europe, you are subject to laws they need to comply with. Same goes for me if I were to do business with a company outside of Europe. If you don't want anything to do with European regulations, simply don't do business with European companies or inhabitants.

    elos42 said: What matters is the written contract. I didn't find this rule about 'what you pay initially will only be counted towards the second month's fees' bit in the contract. Did you?

    This is simply the way a contract is designed to work. A contract stays in place, unless terminated by either party (or a judge). Just because companies like OVH put a clausule in the contract stating that they terminate the contract on non-payment doesn't make this standard practice.

  • 404error404error Member

    For the people saying this is normal in Europe, it's not. Telecoms that were mentioned in this topic, bill you in partials as well, and they bill you in a linear timeline. So that explanation leaseweb gave is not a common one. Besides telecoms usualy add a minimum contract lengt of x months, with penalties. Not the same as what the OP sign up to here.

    And by the way, in my short lifespan, I am yet to see a company pursuing a $10 bill. The cost are just not worth it, and debt collectors can't just do what you peeps say they do.

    Maybe I should move to the UK.

  • PieNotEvenEatenPieNotEvenEaten Member, Moderator

    Really you are making this so hard and stop over thinking it. You didn't press the cancel button on the website. You owe money pay it. It is very relevant that you didnt cancel your properly services as @falzo pointed out.

  • solairesolaire Member

    404error said: Telecoms that were mentioned in this topic, bill you in partials as well, and they bill you in a linear timeline. So that explanation leaseweb gave is not a common one. Besides telecoms usualy add a minimum contract lengt of x months, with penalties. Not the same as what the OP sign up to here.

    No, that's only for lengthy contracts (6+ months). Tele2 Netherlands for example does offer monthly contracts with no penalty or anything if you cancel. Admittedly, you pay an additional 2 euro per month. But you can cancel anytime.

  • 404error404error Member

    @solaire said:

    404error said: Telecoms that were mentioned in this topic, bill you in partials as well, and they bill you in a linear timeline. So that explanation leaseweb gave is not a common one. Besides telecoms usualy add a minimum contract lengt of x months, with penalties. Not the same as what the OP sign up to here.

    No, that's only for lengthy contracts (6+ months). Tele2 Netherlands for example does offer monthly contracts with no penalty or anything if you cancel. Admittedly, you pay an additional 2 euro per month. But you can cancel anytime.

    Sounds good, I'd actually be happy to pay that extra 2 euro instead of being tied for 12 to 24 months while watching better promos get by me on a regular basis.

    But that doest explain what leaseweb does. It really is a weird billing procedure. Bill may to later bill April. And their TOS doesn't seems to reflect that procedure.

  • ShazanShazan Provider

    @404error said: But that doest explain what leaseweb does. It really is a weird billing procedure. Bill may to later bill April.

    There's nothing weird, OP paid first month and what is called "prorata".

  • NekkiNekki Member

    @Shazan said:

    @404error said: But that doest explain what leaseweb does. It really is a weird billing procedure. Bill may to later bill April.

    There's nothing weird, OP paid first month and what is called "prorata".

    In all fairness, it is unusual; normally, you would expect a pro-rata period to be billed either first or alongside the first full month.

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  • kkrajkkkrajk Member
    edited May 9

    Nekki said: No, they’ll sell the debt to a local collection agency, who will then add their fees onto the $10.

    True in Europe or elsewhere. Fortunately, in India, we are a bit protected against unethical charging on debt collection. The (edit debtor ) creditor is owed the debt, the charges/loss of income opportunity due to non payment of debt has to **justified **in a civil court or in a govt established alternative redressal forum

    See above justified. In this case, leaseweb can never justify the debt nor its loss of income opportunity

  • deankdeank Member
    edited May 9

    Ever watched UK's show "Can't pay We will take it away"?

    The show shows a lot of cases where people ignored parking tickets that came back to bite their butt few years later. What was originally slightly over 100 euro came back as 1600 fine with a high court writ.

    Watching their reactions..., fun show.

    The end is nigh. Why? Because the end is actually nigh.

  • @Shazan said:

    @404error said: But that doest explain what leaseweb does. It really is a weird billing procedure. Bill may to later bill April.

    There's nothing weird, OP paid first month and what is called "prorata".

    It's not the case of a prorated bill, if we go by the OP's narrative...that's why it is weird:

    @elos42 said: So I ask them what that's for. This is what they said:

    You ordered your VPS in early April, and paid for 1 month upfront. But that payment was for the period from May1 to May 31. You haven't paid us for April!

    So I said, I have canceled for May. I don't want it for May. So they're like: "Doesn't matter, the money you paid us initially was for May. But you used in April. Pay us for April."

  • ShazanShazan Provider

    I suppose they calculated the pro-rata after the first payment for the full month of May. Yes, it is unusual but I don't see much of a problem here.

  • raindog308raindog308 Moderator

    @elos42 said: You don't really get it. In today's world, you can't rely on such 'gotchas' in the contract to get people to pay for more than 1 month at a minimum, when your rivals are charging by the hour.

    It makes zero business sense.

    "I signed a 30-year mortgage for my house and after a year I decided to move. Now the bank expects me to pay the whole mortgage! They really don't get it. Their rivals are renting houses by the month! This makes Zero Business Sense."

    I award you the rare, coveted double sole face palm:

    image

    First mistake: DO, Linode, etc. are not Leaseweb's rivals. The vast majority of the hosting world charges by the month.

    Second mistake: You didn't read the contract. You seem surprised that contracts have terms that bind you.

    Third mistake: Trying to lecture the rest of the world on what makes good business sense.

    Do you think I'll recommend them to any of my clients?

    I'm sure Leaseweb's board of directors is conferring even as we speak on how to meet this crisis.

    404error said: But that doest explain what leaseweb does. It really is a weird billing procedure. Bill may to later bill April.

    But of course, that story could just be OP's bullshit.

    Here's another part of the story:

    elos42 said: But since I'd already paid for 1 month, I thought I'd let it hang around till the end of the billing period.

    Big Mistake!

    I get a new invoice a day after the one-month period was over.

    Translation: I didn't cancel and I got billed for another month and I don't want to pay. That is what happened here.

    The rest is just teenage gluteus maximus accelerated discomfort..

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  • joepie91joepie91 Member, Provider

    If they did do a month switcheroo (ie. charge for May first and only charge for the sign-up month pro-rata after that), then it's quite possible that this sale is illegal under Dutch consumer law. Pretty much any confusing billing model for subscriptions is automatically disallowed under current legislation.

    (Assuming it was a business-to-consumer sale and not business-to-business, of course.)

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  • FalzoFalzo Member

    @raindog308 said:

    this!

    leaseweb simply aligns billing periods.

    with your order you need to pay at least for one full month of the service upfront. if the service is not cancelled you'll get two invoices, one for a full month, and a prorata'd one for the remainder of the initial month. as they already have the money for a full month, they of course just need to charge the remainder.

    if one would simply cancel in time after buyers remorse, that confusion probably could have been avoided.

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  • pullangcubopullangcubo Member
    edited May 9

    @Shazan said: I suppose they calculated the pro-rata after the first payment for the full month of May. Yes, it is unusual but I don't see much of a problem here.

    The problem is:

    1. OP signed up for a monthly contract on April and paid the bill
    2. LeaseWeb applied that bill (#1) for OP's May bill instead
    3. However, OP cancelled the VPS (for the sake of argument) by May
    4. LeaseWeb is now asking OP payment for April and insists that #1 is for May

    Now, this scenario is not quite accurate since it appears OP didn't explicitly cancel the VPS for the next billing cycle, and hence I believe he/she should just pay the second bill and then cancel the services.

    However, the question persists: if LeaseWeb goes by this billing scheme, and another user legitimately cancelled the VPS before it's next billing cycle, how would they account the fact that they are billing the user for the services rendered the month before and that the initial bill the user previously paid for is actually for the current month (which the user has already cancelled services for)?

  • ClouviderClouvider Member, Provider

    pullangcubo said: However, the question persists: if LeaseWeb goes by this billing scheme, and another user legitimately cancelled the VPS before it's next billing cycle, how would they account the fact that they are billing the user for the services rendered the month before and that the initial bill the user previously paid for is actually for the current month (which the user has already cancelled services for)?

    The minimum term of 1 month + cancellation effective at the end of the term

    So if you sign a monthly contract on 5th April and the term is defined as 1st of the month to the last of the month it ends up being effective at the end of May.

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  • @Clouvider said:

    So if you sign a monthly contract on 5th April and the term is defined as 1st of the month to the last of the month it ends up being effective at the end of May.

    If I got it right, it means that all (monthly contract) account sign ups that wasn't done on the 1st day of the month is effectively turned into a multiple-month term for the initial (monthly) contract -- the partial initial month + the full next month?

    Which means that the user cannot cancel the account during the current (initial) month because the initial (monthly) contract shall only end the following month?

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