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Well I can tell you for almost certain this wont hold in EU.
But first you should call them on phone to talk to someone, its always better than emailing/ticketing.
Its 1600€, not some money you throwaway and forget the next day, they are just extorting him bluntly said. You can offer them to pay for a month if that makes them happy, otherwise find a real advice not from a hosting forum where everyone thinks whatever you write in your little TOS equals a law in court.
If OP pays at yearly commitment discounted price, why would it not hold in EU?
If OP pays upfront, he saves (1) setup fees, which is 99.99 eur, (2) 42 eur every year, based on current pricing.
Even if court find the contract reversible, OP would likely have to pay extra setup fees and promotional discount to fill the gap between a yearly commitment and a month-to-month plan.
He said he paid month to month for past year:
Schedule:
2019-2020
Paid year upfront.
2020-2021
Paid month to month.
So they cant just change it to yearly upfront payment now again without him accepting this, dont you agree?
It makes no sense, why were they even charging monthly for past year and now they want year upfront, without consent?
Knowing OVH, it was an yearly contract to begin with.
A typical billing error made it monthly billing with the benefit of an yearly contract. When the new billing cycle came in, it autocorrected.
Experienced that sort of shenanigans with OVH before. They really cheap out on staffs.
A contract with yearly terms doesn't mean you only have to pay yearly basis.
Contract means you can't leave their service before that time period.
In this case OP bought this server after agreeing yearly contract but after a year he paid monthly but the contract is yearly and he never changed the contract term.
So OVH have every right to ask him to pay as he didn't change or cancel the contract.
He paid month-to-month doesn't mean he paid month-to-month price. It could also mean OP has been paying yearly commitment discounted price split into 12 invoices.
Also I found this in their FAQ (on US ovhcloud site):
From the information provided by both sides I think OP was simply paying his yearly commitment price every month, instead of paying upfront. That is, he is paying 1600/12 = 133 every month instead of paying 1600 upfront.
The non-commitment price would have been higher.
He doesn't have a 3 year obligation, hence the requirement for renewal after each pay period.
Their support claims he wouldn't have had to pay it if auto renewal was turned off. Ok, fair enough ,I've forgotten to turn off auto renewal before.
But why did the billing period change from monthly to annual all of sudden? This doesn't happen in Canada and if this happened to me in Canada where I had proof of 12 previous monthly payments, I know I'd be in the right and provider has system error.
From OVH point of view, this is service not yet used (much) and can easily cancel the invoice as good customer support. This isn't a case where they got a year of service and then failed to pay the bill.
OP is in the right, but I'd like to know if he got an invoice sent in advance before he found out he was attempted to charge his credit card. A $1600 invoice would get my immediate attention. But I tend to ignore monthly bills of low, regular amounts on auto renewal that I want to renew.
The ONLY service I use that doesn't presend an annual invoice before charging (and do not email payment confirmation after) is LogMeIn Hamachi and they'll forever be pieces of shit as a result (one year the price went from like $29.99 to $179.99 or something).
exactly. that's the interesting point and most likely where we miss a piece of information.
sadly OP did not comment on how he changed to monthly billing in the first place and if or when he changed auto renewal or not at some point.
To be fair to OVH, it might simply be the case that when the OP attempted to end the annual contract, they billed him for the full remaining amount at once instead of letting the monthly payments roll on.
Which is pretty normal when you terminate a contract early.
Legal things aside, why can't just OVH bill him for a month and terminate and then rent the server to someone else? Are they really losing anything? They can just "unreserve" the server.
OP probably made a mistake here, but this "we can't do that" reply is really "we don't want to do that".
They don't have to but would be a nice thing to do.
You seem to be missing the point.
Of course, OVH can/could do many things, but this isn't the question.
As far as one can discern, the OP received a lower average monthly price for the server by making a yearly commitment to renting it (a contract period). If the OP wants to end his commitment before his contract period is over, then OVH can reasonably (and legally) expect him to pay the remain months of his contract period upfront.
The matter is pretty straightforward -- this isn't rocket science.
The OP may make a plea for mercy to OVH, and perhaps OVH would excuse him from the rest of the contract period (unlikely), or perhaps OVH would apply the remaining payment as account credit (more likely). Or perhaps OVH wouldn't grant anything at all.
In any case, as has been said above, the lesson is that one should understand what one is signing up for.
Are you inside EU?
Otherwise just block OVHs mails and dont pay. They will not go after anyone outside EU, as the cost is far more than their entire profit margin for that server.
I also had an awful experience with OVH but a minor one only. I was not sure if I felt happy when their data center got fire or feel sad with the data that were burned. I'm staying away from OVH for sure.
this kind of logic is always flawed.
why should they rent that server to someone else, if the contract for it is bringing in money already. that 'someone else' you are talking about can just get another box they most likely have already waiting for him. therefore it'd bring in additional revenue, and that is what they obviously would lose.
It's easy to think that way by those who don't take contracts seriously.
In this case, should the client sue the provider, or is it the other way around?
I just want either side to sue.
The OP presumably got a discount through the duration of the contract in return for the commitment - it doesn't work that way. There are real costs involved with provisioning a service.
To give you a simple analogy, Why can't T-mobile unreserve your mobile phone number half way through the contract and just sell it to someone else half way through your annual contract with them?
Edit: @angstrom beat me to it ;p
I find it interesting people think that OVH are somehow losing money due to some discount/long term contract even though the OP could have cancelled a month ago without penalty.
Somehow a month ago, OVH wwudnt lose money, but now they would?
OP, did you sign an actual contract? What are the terms of the contract with respect to renewal? And did you register as a company or a person?
In HK, it is common practice for service providers to auto renew contracts (default position). It auto renews at a higher rate usually. My default position is to immediately provide notice of termination as soo as the contract begins. That way if I forget to renegotiate my renewal contract, I never have to pay the inflated fees.
you could argue that OVH discounts this into the revenue mix already, e. g. some x% of customers on a longer term commitment and/or with auto-renewing contract will simply forget to give proper notice and/or renegotiate in time. Man is a lazy animal ;-) So OVH could argue that this is all part of the discounted price the customer got for signing the contract.
Of course if it was a matter of minutes or hours, then OVH might be accommodating.
you seem to immediately cancel at the end of the minimum contractual period after signing up, so you know exactly what you are talking about.
And yes, a month ago OVH would have "lost" money in the sense of future revenue, that was only possible, but not yet invoiceable etc. as then probably the customer still had the right to terminate the contract/not renew. If the contract has already renewed then OVH would really lose revenue it is contractually entitled.
see, you seem to know exactly what you do and why - it is kind of contradictory with your opening statement ;-)
OP could try to negotiate with OVH or try to resell/transfer the server with those conditions to another customer, that way everybody would be happy.
I do it because such actions are ridiculous and this generally covers me from ridiculous situations.
I run a company and I dont like having to pay for services i dont need/use, nor do I like dealing with small claims court.
Companies go after other companies.
Personally, I wouldn't care.
if that matters then why stop there? Why ever paying something if you do not want to?
yes, I partly agree and that is the reason why there are strong consumer protection rights in most countries nowadays.
But this is not a consumer case here, right? I ask because "normally" a consumer would not rent a 2000 USD per year server.
This is same argument as "Is piracy loss for the creator, since they would not have bought it anyway". As for the answer, we can only speculate.
OP is long gone.
In case you care.
They're not even remotely similar.
Basically you can look at it like this. A customer can intend to cancel but forgets to cancel on time or is for some reason unable to cancel on time (maybe they were in a coma).
If the contract auto renewal day is Monday and you cancel on Sunday, all good, no loss for the company. But apparently if you cancel on Monday (or Tuesday), there is a loss? This makes no sense.
As for payment terms, it's somewhat strange that the customer, who has been paying monthly for over a year is all of a sudden contractually obliged to pay the next 12 months all at once.
There are some inconsistencies here that need looking into.
Any way. Depending on the status of the OP, if hes a cmpany or individual, his rights vary. As a company, you get next to no leeway and you may have little choice but to bite the bullet. In which case requesting or insisting on monthly payments would probably be both reasonable and justifiable, given that's how hes been paying for over a year. As an individual, in Europe, such automatic contract renewals and change in payment terms are at best questionable, and at worst illegal. Individuals are granted much more leeways and protections.
I'm not sure who first mentioned "loss" above, but it's a red herring to frame the OP's situation in terms of (presumed or real) loss for OVH -- it misses the point. (Perhaps you agree.)
The only thing that matters is the OP's contract, which was automatically renewed for a third year.
One can have a discussion about the legality of such contracts, but I'm not aware of any (EU/US/CA) law that says that they're illegal.
The OP didn't provide all of the details, so it's also not clear just how far he was into the third contract year when he decided that he wanted to stop.
Based on his post, the demand for €1,600 suggests within 1 month of the renwal.
But yes, the contract is what matters. He may contractually obliged to pay, but depending on his status, it may not be legally binding.
Too many unanswered questions to make any determination, but generally speaking if he's a biz, he maybe screwed, but if an individual? Probably protected.
Why do you keep thinking there was a three year contract signed? The very first sentence of op:
When he talks later in the paragraph about paying until 2022, it's because he was given a renewal invoice for a year that goes until 2022.
There's three references (or lack of) that support there was no three year contract:
1) the support looked into it and said he just needed to set annual renewal to manual. He answered like he was doing the customer a favour by renewing it, which is a bit of a dick response.
2) No response on the point about paying monthly, twice. Are there two different auto renewal buttons, a monthly and annual? That would be a first for me.
3) there's no reference to a three year agreement by the support agent. Reminding someone of a three year agreement would have been expected if this was the case. It makes the point about turning off auto renewal moot.
It's bad customer service.
I know some hosts do this to help customers spread the cost. I know Hivelocity allows this, so if you initially sign up for a prepaid advanced term like 3, 6 or 12 months to get the long term discounts, you have an option to move to monthly payments at that discounted rate but you're still contracted and obligated to the prepaid term. So you could sign up for 12 months with 15% discount and on 2nd year, move to yearly contract payable on a monthly basis.
OVH usually offers up a contract you can download/keep at order time. If original poster has that contract, he could look to see if there are provisions for such.
But I don't assume a three-year contract!
My working assumption is/was that he has/had a yearly contract that is/was automatically renewed on a certain date every year. (But this doesn't make it any less of a contract.)