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problem with host / is a dispute justified?
Hi folks,
hoping for some advice here.
I had a service with a hoster and cancelled it a while ago. Contract ended, service deactivated, all good. Unfortunately I did missed to cancel the "paypal subscription", so I auto-payed once more.
I asked for recission of the payment.
This was declined, reasoning "money sent is considered as credit if not paid for a service".
Aspect #1:
I do not have a contract with this hoster any more, the payment does not have any connection to any contract, so in my understanding - I am totally entitled to get a refund here whether or not the original service was "non-refundable"?
(At least that's what german law would say: If you receive something in error, you need to give it back when asked for)
Aspect #2:
But there's more:
I hinted that I might want to escalate this if we don't find a solution = open a paypal dispute. Response: 'PayPal disputes or claims result in immediate termination of your account.'
Wow. A threat that I would loose my money if I complain?!? What century do we live in?!?
This would also be IMHO non-compliant to german law - a financial claim can not be just "nullified" because I don't like your behaviour.
Of course he could counter-claim "reputation damage" or similar, but you can not just invalidate a financial claim on such grounds.
I first though I'd simply send an invoice and follow up with a dunning procedure but I can't because, guess what: there is no imprint.
Neither of his sites have any publically visible info about who operates the business, names, addresses or any kind of contact details.
Yeah, I know, I should have checked in advance - having no imprint is such an obvious sign of "bogusness"... But too late. Isn't it illegal all over europe to not have an imprint as a business entity?
The guy is "a bit" active here on LET.
The only clue I have is that his WHCMS runs on inception hosting so probably he's reselling [tag of not involved other provider removed]
So: What do you think:
As said, I am a bit unsure here - would this be a german hoster, in my view he would be in obvious and clear violation of basic laws - you have to give back what you don't own and a financial claim can not be invalidated just because one side doesn't like paypal disputes.
What would your suggestions be on how to move on?
Just write the money off or go with paypal - what are my chances there anyway? - and then perhaps still write the money off?
Thx for your replies.
Comments
Give him the chance to refund.
If he refuses I would post some reviews on forums/sites.
You misunderstand: I already wrote to him twice - he declined.
These are in fact direct quotes from his responses:
"money sent is considered as credit if not paid for a service"
"a Paypal dispute or claim will result in account termination"
This quote here is even directly copied out of his T&C:
'PayPal disputes or claims result in immediate termination of your account.'
I hope there should be some lawsuits against paypal subscription.
If your service have deactivated/cancelled, paypal should get notified about it.
This is just like paypal throwing your money into toilet.
Ok, my bad. Sleepy.
I would open a paypal dispute and let them take care of it. If you cancelled the service and can proof it paypal should decide for you. What's about name & shame?
Inb4: a bunch of hosts will jump on this and blame you for not cancelling PayPal subscription. And even hinting at the D word is anathema.
Any serious business would refund you and be done with it but now it's either you going to paypal or use that credit. After I had this situation a couple of years ago, I made it a habit to check PayPal pre-approved payments regularly.
This problem has been discussed a number of times on LET. I suspect that a number of low-end providers would have the same reaction.
Ultimately, it's the customer that is responsible for canceling their PayPal subscriptions.
I agree that it would be nice if the provider refunded the money, but even in the best case, they would charge a fee to do so.
By the way, who is the provider? No reason to keep this a secret.
How much did you pay?
Yeah, ethically, the situation is clear enough: the customer has a valid reason to claim a refund.
I'm less certain about the legal status of the situation, which may also vary from country to country.
Clearly, the customer is in a difficult position because the provider threatens to cancel their account and may report them to FraudRecord.
Depends on how the customer asks us too. If it is a "why did you charge me? are you scam? you steal money from me?", the customer will get an explanation on how PayPal subscriptions work and that they won't be getting a refund, only a credit in their account with us, especially if they do not come back with a very nice apology. If it's a "I made a duplicate payment, can this be refunded?" - the refund is quick and swift.
Didn't work out between ChicagoVPS and me. YMMV.
My first thought is you shouldnt have tagged anthonysmith on this thread. It has nothing to do with him.
As said, from a legal point of view (and I can only share from german point of view here) this is not "nice" but "the only legal way".
And I can hardly imagine that in the US with all the excessive controlling requirements that exist there, this would be different:
A payment that is not assoicated to an order or contract, usually is parked on a seperate account and usually they are eager to give it back because it causes lots of trouble.
Just try transferring 0,10 EUR onto an account of Vodafone or Deutsche Telekom and see what happens. You wouldn't believe the length they will go to give back 0,10 EUR!
Totally reasonable and I would not have objected a fee of (just to put a number), 10% or so.
My problem is the combination of "no refund at all" and "if you dare to complain, your money is completely gone".
That's in my personal opinion... well, let me be polite and not say what I feel this is.
Ok, as there seems no objection to naming:
It is mrvm.net aka freecpanelsharedhosting.com (renamed this summer or so) aka mikhosoft.com aka LET-user "mikho"
31 USD.
Obviously it won't break my bank, but I don't like wasting money and I even like less being blackmailed.
Totally correct, sorry, I did not at all want to indicate any sort of involvement from him.
I removed him in the OP. This is about a customer of him. No connection to him or his business whatsoever.
My exact words were (quoting from the ticket):
'I'm very sorry for the hassle, but apparently I have not yet cancelled the automatic paypal payment for this service even though it is cancelled since a while.
I have just cancelled the payment, but too late - transaction is already through: XXXXXXXX
Could you please reimburse that payment?'
If it's really the truth what he says fraudrecord will remove the entry and talk to the Host
I wonder, though: is there a legal precedent for this kind of case in DE? I'm not saying that you're wrong about the legal status of this case in DE, but I wonder whether there's a legal precedent for this kind of case.
Just to keep things in perspective: the customer agrees to a PayPal subscription, which he/she can cancel at any time, the payment made is thus not made "in error" -- at least not in the ordinary sense of "in error" -- and the amount paid remains on the customer's account at the provider.
Again, I'm not saying that you're wrong, but I wonder ...
Apologize and ask for a refund, if not given then chargeback and explain to PayPal what happened. The provider canceling your account due to that has no bearing since you're not interested in using their services anyway.
They are holding on to money they are not entitled to. You forgetting to cancel the payment authorization on your paypal account doesn't change that.
And FYI providers can do it on their end, they just don't want to.
When a customer has a paypal subscription and cancels service we remind them to cancel any subscriptions. If one does happen to come in that was for a canceled service we refund it right away. No b-s hoops to jump through.
@mikho refund him and be done, I strongly doubt that such terms in the ToS is legally tenable anyway - at least for european jurisdictions and laws (unjustified enrichment etc.)
and as far as I am aware you are not from the US ;-)
IANAL, so don't rely on this.
But I believe I recall correctly that what already has been on trial and decided consistently are cases about "payed vouchers":
If you pay (!!) for a "gift certificate" = a voucher (NOT get it for free etc, but really pay for it), then it is illegal if this voucher expires.
It must be possible to reclaim indefinitely.
And if I recall correctly also "return it for money" must be possible indefinitely.
(if I recall correctly the reasoning was somewhat like "you give a loan to the company so they have to give it back").
Also note my reference to general bookkeeping above.
But I do understand that these are not directly the same case.
I DID have a contract in the past and I DID in the past accept the T&C.
I would doubt that there is exact legal precedent for this kind of case and quite obviously for that sum I won't be the one trying to sue over it - I have better things to do in my live.
At least under German law, they absolutly have to return the amount in full (§ 812 Abs. 1 Satz 1 BGB) and I‘m fairly certain that this is the same in almost any jurisdiction. There shouldn‘t be much debate about this anyway. It takes them half a minute to refund the payment.
Just open a PayPal dispute, you are 100% in the right.
Edit: Adding you to Fraudrecord for this would actually be a criminal offence for the provider.
I know that this "non-refundable" aspect of Paypal subscriptions is the norm at many hosting providers (and they're very clearly documented/announced as part of the sign up process). I'm not questioning/defending the legality of such terms/ToS (IANAL).
From what I understand, there is a fee aspect of this via Paypal that the providers get dinged on refund - so even though I may have amount X in the account, refunding that full amount costs the provider some % of X.
As the OP has pointed out, if the providers can agree that they will return the amount, charging a % fee for the processing of the refund, I think that seems like a very reasonable middle ground to keep everyone happy.
(I'm not a provider) Can provider(s) explain their perspective on this please?
IMHO even if you're not in the wrong (and you definitely are not) - a dispute will mean that your FraudRecord will look bad, resulting in further harm whenever you want to use another host.
So think twice before you do it, because..is $35 really worth the hassle of being in a blacklist?
I do believe the host has to reimburse you. Unless they are being a dick. And the only company that has ever done that to me is Delimiter, and we all know how well that worked out for them.
I agree that terms are there to protect the seller, but it seems that you were nice enough in your message, and its not like you're trying to scam the host. So I see no reason for them not to reimburse your payment.
Just my 2c.
FWIW, I dont think it's reasonable to charge a fee to return the money either, there are some costs a business has to swallow and administration of a payment schedule which both parties originally agreed to should fall under that. This is no-ones fault (maybe paypal really), and so the only option here is for the money to be returned.
If the merchant doesnt like these situations they could of course opt to not accept paypal. But they do.
You mean the following?
Perhaps, but who knows for sure? It's nevertheless a leap from the generality/abstraction of this text to the concrete details of the case under question. But perhaps.
But, just to be clear, I agree that @southy's request is perfectly reasonable.
If I'm not mistaken mrvm is a Swedish company (mikhosoft)? Based on the principle of condictio indebiti @mikho should refund the guy. The only exception (NJA 1933) is that mikho in god faith believed the amount OP paid was for an account credit rather than a payment for the cancelled service. This cannot be appealed to in this case as 1: the amount debited was the same for the canceled service. 2: A PayPal subscription is usually not used when adding account credit. 3: It's a well known phenomenal that cancelling a product does not void a PayPal agreement thus causing customers mistakenly paying, which mikho knew in this case. 4: He was swiftly notified.
Minimally, I believe that PayPal withhold the 30 cents constant charge from the provider, so the provider would nevertheless lose something on giving a refund (which in theory could add up if people don't cancel their PayPal subscriptions and rely on refunds from providers).
I'm not sure how easy it is to give partial refunds via PayPal. Minimally, it would complicate accounting, because a provider would need to introduce a distinct fee category "Fee for refunding a mistaken PayPal subscription payment".
yes, that's called "ungerechtfertigte bereicherung" (unjustified enrichment) and the legal discussion would probably come down to the phrase of "ohne rechtlichen grund" - in my opinion a cancellation on a contract removes exactly the only legal reason. the ToS are part of that contract, if the main contract gets cancelled - what does that do to the effectiveness of the ToS in the B2C relationship?
sure, this only gets interesting if one party would sue another and probably no one really will do so over $30 bucks. still from a practical point of view it for sure would be much easier to refund the money to not have to deal with paypal and all that stuff and if it would have been done in the beginning the providers reputation in the books of this client most likely would still be a good, recommendable one. now it's ruined.
I also understand that mrvm and the lowendspirit might be considered special cases because they grew as some sort of community-driven project... yet I'd prefer if payments like this would not need any discussion over being refunded again and again - no matter how clearly this might be visible during order process or whatsoever.
Well my opinion on this is very well known, it may not be a popular one but I would not refund you either.
Then again, by the time you even get your first invoice with Inception hosting you are warned about this 3 times, by the time you get your VPS info you have another 3 warnings, you get an additional warning by the time you get your second invoice (maybe 3 if you don't pay it the same day) and upon cancelling your service you get 3 further requests to cancel your subscription one of which is highlighted in yellow in BIG BOLD TEXT
On top of that you had to go through the agreement with paypal and then paypal send you an email to confirm what you have set up and your responsibilities.
So by the time you forget, you have been told a minimum of 15 times (usually more like 25) across 2 platforms, time is money, refunds are not free, it is your money, your bank(paypal) account, you look after it or dont get annoyed when others will not do it for you.
Again, I appreciate this is not a popular opinion, it certainly is general and not aimed at this case in particular or intended to offend anyone but this comes up almost every year after BF/CM because people wanted super special deals and then expect hosts to take a hit a year later when doing stuff at rock bottom prices to begin with.
The only exception I ever make with this is if the customer has been removed for abuse or is never likely to take more service for a good reason as the credit is then of no use to them.
Just because 'insert company name here' is happy to be a whipping boy for your inaction does not mean every one will allow you to shit on their doorstep and then knock on the door to demand toilet paper.
Which is absolutely relevant if it is made clear in the terms that over payments are held as credit proper to payment, which it is, so the company can consider it intentional.
Edit: Last word on this, I also need to say, I never mind a user putting a paypal dispute in if even after all of the warnings, reminders, requests they still feel they cannot agree with what they already agreed to, if you take it to third party arbitration though, do not be upset if you loose as then you obviously loose your account and credit as well.