This situation is why I don’t like to let anyone auto-renew or auto-bill to my bank account. In this instance I’m using a credit card, which offers more protection.
We are currently aware of some billing inaccuracies which we will be resolving later today. All of these issues will be resolved, and any billing errors corrected. We sincerely apologize for any hassle this has created.
– UPDATE Tue Jan 15 04:13:17 PST 2008 –
The problem has been found and corrected. We are currently going through all erroneously charged accounts and refunding money. Stay tuned for further updates.
– UPDATE Tue Jan 15 07:25:16 PST 2008 –
Scripts are still running to correct the original problem. Last night, this guy ran a standard billing cycle to clean up stragglers from 2007. Unfortunately, the biller was run for 2008 (December 31st, 2008 to be exact). This caused everyone to be billed as if today was 2008-12-31, wreaking the havoc that we are so sorry you had to be put through.
…
The reason I noticed was that I got an “automatic rebill” notice this morning for my hosting account, which was weird, since the account normally renews in April. But what really caught my eye was that it billed me TWICE:
We have the last payment on this account to be $1.99 on 2008-01-15 04:40:27. (Ed: I think this is a dividend payment, as I didn’t pay them anything myself.)
Since then the following charges have been made to the account, which you have just paid for:
2008-05-01 - $287.40 for “Code Warrior” through 2009-04-30.
2008-05-01 - $287.40 for “Code Warrior” through 2009-04-30.
For full information on your previous balance please visit:
< Panel Invoice subtab >
SUMMARY OF PAYMENT
Amount: $534.54
Credit card: *XXXX (ex XX/YY)
Payment code: #######
Charges on your credit card bill will be from “DreamHost.com”.
It was only after I tried to contact billing that I realized that there must have been a site-wide screwup. The email got bounced as undeliverable due to “too many connections.” Which is understandable, considering that a lot of people were using debit cards linked to their checking accounts, and a lot of these people woke up to overdraft fees and bounced checks this morning because of the unexpected charges; others had their hosting accounts suspended for “past due” balances if they didn’t have any automatic form of payment on file. As of this moment, there are 576 angry comments on the above post, and the number keeps growing.
This comment shows some of the pain that can come from unexpected charges of this sort:
As a (until now) happy customer of dreamhost this mistake is extreme anger inducing. I have been charged for a full year right before my mortgage payment for the month cleared… making my mortgage payment check bounce.
lets see:
$119.40 yearly hosting fee
$50 bounced check fee
$100 missed mortgage payment fee
30 day late on my credit record (which kills my refinancing hopes for this year)
WAY TO GO DREAMHOST!
Ouch!
While I’ve been fairly indulgent of Dreamhost’s failures over the years because they offer inexpensive hosting with lots of features, this sort of billing screwup isn’t something that I can so easily overlook. It either reflects a lack of appropriate financial controls, or an overly cavalier attitude towards the billing process. Either way, I am strongly considering removing my credit card information from their system and doing all renewals manually.
If it’s this easy to screw something up by accident, imagine what someone with ill-intent could accomplish. So I would suggest to Dreamhost that they not only need to fix the problem, but they will need to go above and beyond a simple fix to reassure customers and to regain lost trust. That would include:
- Compensation for any and all fees or costs incurred due to the erroneous billing (i.e. returned check fees, overdraft fees, etc)
- A public audit of their billing processes, with a published report to all customers of the outcome.
- A published plan that lists, item-for-item, fixes for all issues identified in the audit.
Updated after first publish to add quote from comment thread on DreamHost Status.