Dreamhost Billing Apocalypse Refuses To End

We’ve received the following communiqué from the trenches of the Dreamhost billing apocalypse:

I need help—or at least, just to kvetch. You remember that big $7.5 million snafu Dreamhost made? Well, I received an invoice the day before and trustingly paid it with my credit card. Then, I learned—from Consumerist, no less, not from Dreamhost—about the billing mistake. Nowhere did Dreamhost mention that legitimate invoices were *also* sent out. I looked at the invoice they sent me and noted the error in the date:

This is just a notice that your DreamHost Account [redacted] (“jasmin’s Account”) has a balance of $119.40 (including any charges not due until 2009-01-15), with $119.40 due (since 2008-12-15).

You also have $119.40 past due (owed since 2008-11-15), and if by 2009-01-15 you do not pay at least the $119.40 part, your account will be automatically suspended until payment is received.

I waited a couple of days—no e-mail from Dreamhost, no refund, so I took matters into my own hands and called my credit-card company to reverse the charge. Then, I got this lovely note from Dreamhost the next day:
From: DreamHost Billing Department Subject: ccard Chargeback

Dear Jasmin,

We have received a notice from your card service stating that there was a chargeback made by the owner of the card that you paid for your account with. This is a very serious matter. I have deducted the amount of the chargeback, $119.40, from your account and added our standard fee of $25.00 as well.

This is a time sensitive issue and must be resolved promptly at the request of the card service. Please email the billing team using the link below or using the Web Administration Panel with information about how you are going to deal with this situation. I have disabled your account on the basis of fraudulent charges and non-payment. I thank you for your time and hope to hear from you soon.

Turns out it was a legitimate charge; my account was up for renewal, despite the screwed-up dates, but this was never communicated to me in any form, until the above pass-aggressive e-mail. Oh, and my account was suspended immediately, without any dialog whatsoever, which could have prevented a lot of agitation. I called my credit-card company again and reversed the chargeback. I e-mailed Dreamhost again … and again … and again. It’s been a week and I haven’t heard one peep from them, which is proving exceptionally frustrating. And to make it worse, even though a brief phone call would have resolved this whole issue, you can’t call Dreamhost unless you’re one of their VIP accounts.

I’ve been a customer since 2001 but I’m now at my wit’s end and this close to closing my account and taking my URLs elsewhere.

Thanks for reading this far at least. I really appreciate it. And thanks for the great site.

Cheers,
Jasmin

Yikes. Dreamhost obviously thinks that someone is fraudulently using your card, rather than realizing that it was you who disputed Dreamhost’s apparently fraudulent charges. It’s probably going to be pretty difficult to explain this to someone without using the telephone.

Anyone have an email address or other contact info for Jasmine? They’ve sealed the base and she really needs those recall codes.

Comments

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  1. Crumbles says:

    Run away from dreamhost. I did and never looked back.

  2. I had a very similar experience with Dreamhost. My first year was great, my second wasn’t bad but I didn’t quite feel as if I was getting what I was paying for. The billing issue was the straw that broke the camel’s back.

    It wasn’t even the billing issue to be honest – it was the fact that because of the billing issue my account was suspended. When the billing issue was fixed, the technical issue of my account being suspended was not. After 3 days of emailing their tech support and receiving nothing back but auto-responders talking about the goddamn billing issue that wasn’t the reason I was emailing them, I switched over to SliceHost.

    I don’t miss Dreamhost one bit.

  3. squikysquiken says:

    Why fault them for suspending the account right away when it looks (from this post) that she went straight to the credit card company to do a chargeback. Why in the world didn’t she ask DH first?

    I don’t know about her account, but mine came with bundled in 3 callbacks a months for free (go in the panel, ask for them to call you) and I’m not a VIP and any way, shape or form.

  4. swalve says:

    Good lord. “I can’t be bothered to pay attention and want everyone else to accommodate me!”

  5. bonzombiekitty says:

    So…. you think you got one of the bad charges and wait for a few days for the refund to kick in. When it doesn’t, instead of contacting Dream Host and asking what is going on, you go to the credit card company to issue a charge back?

    I understand the frustration of the charge to your card being legit, and getting confused with the whole issue. But why in the heck did you not contact Dreamhost first?

    Charge backs should be reserved for when you cannot reach an agreement with the company you are disputing a charge with. This is ultimately the fault of the OP because she failed to try and resolve the issue with Dreamhost first. Had she done so, she would have known the charge made was legit.

  6. Ruthven says:

    @swalve: Thank you … I was wondering if it was just me thinking this person should know when her billing was due. Sure, I could see contacting DreamHost and asking what’s up with the weird dates, but the chargeback? I mean, how can you not know when something like that is up for renewal?

    Major, disorganization on Jasmin’s part, regardless of how DreamHost has admittedly dropped the ball here.

  7. bonzombiekitty says:

    Also it seems that Jasmine does not have automatic bill payments; she said she received the invoice and paid it with her card. My understanding of the whole snafu was that it really affected people who had auto pay set up. It was probably those people that got the notice of the problem because they actually had money charged to them that shouldn’t have been. Since Jasmine wasn’t really an affected party, that might be why she never got any correspondence from Dreamhost and why she found out about the whole thing from consumerist, not Dreamhost.

  8. STrRedWolf says:

    Ugh. What a mess.

    But yes, definitely move away from DreamHost. Some Keenspot properties that were trialed on DreamHost are being hosted internally at Keenspot now.

  9. Dunkerque says:

    I am a former high-level customer service manager at a another web host in Dreamhost’s market segment, and I can confirm that this happens all the time. In fact, it’s SoP: the minute a chargeback notice came into the office, the account was fined and suspended without any investigation.

    Honestly, I’d have to borrow half a dozen friends’ fingers and toes to count the number of things that are wrong about the low- & mid-level web hosting industry (have you ever actually tried to use the amount of disk space they’ve promised?), but this is one practice that I agree with.

    1.) In the web hosting industry, a high-90′s percentage of all chargebacks are from accounts created with compromised credit cards. We manually cancelled between 100-200 orders PER DAY that were found to be fraudulent, but we obviously couldn’t catch them all. In these cases, there is usually no valid customer contact info on the account. And more often than not, the account was created to host malicious/fraudulent content. Getting those accounts offline as quickly as possible is a responsible thing to do.

    2.) As useful as chargebacks can be, when they’re performed by legitimate customers who have not exhausted their customer service options (as was obviously not done in this case — who does a chargeback without even calling to see if the charge is valid!?), the customer should anticipate an antagonistic reaction.

    The fact of the matter is: Dreamhost didn’t incorrectly bill this account and did not deserve a chargeback (that ultimately hurts its reputation and costs time and money to resolve). Apologize to Dreamhost, ask them if they’ll waive the $25 fee as a gesture of good faith; if they refuse, pay it and learn your lesson about responsible consumerism.

  10. Erasmus Darwin says:

    @squikysquiken: That’s exactly what I was thinking.

    And adding support to the notion that she should have contacted Dreamhost first is a previous Consumerist article that happens to be one of the first few Google results for “Chargeback”. From the second to last paragraph:

    “We urge consumers to only use chargebacks as a last resort and never before making several attempts to resolve an issue directly with a merchant. The last step before doing a chargeback is to threaten to use one. Sometimes that’s enough to change a vendor’s mind and let them know you’re serious.” (Emphasis is mine)

  11. kc2idf says:

    As always, there are a boatload of replies blaming the consumer. I think that, in this case, the consumer was being rightfully vigilant.

    More the the point, the unobtainability of any meaningful communication with Dreamhost is simply not acceptable, regardless of what preceded. If you can’t get in touch with those who you have hired to provide you some service when there is a problem, then what good are they?

    BTW, I like DirectNIC and use them for my hosting.

  12. arniec says:

    I use dreamhost because I need the massive bandwidth they offer, but I am NOT happy with their support, lack of phone options, etc.

    If someone knows of another place that offers as much bandwidth at a similar cost and provides phone support or other, better options, PLEASE post it…I’d like to switch away.

    To quote Monty Python: Run away!!! Run away!!!

  13. MiltyKiss says:

    @bonzombiekitty: Nicely said.

    So Jasmin saw the invoice, paid it off, noticed the incorrect date, *did nothing*, assumed that Dreamhost was going to do some sort of auto-refund, when nothing happened filed a chargeback. O_o? Wrong reason to file a chargeback. Had you attempted to contact them first and failed, then you should have filed a chargeback.

  14. bonzombiekitty says:

    @kc2idf:

    If you can’t get in touch with those who you have hired to provide you some service when there is a problem, then what good are they?

    According to the OP, there is no indication that Jasmine ever even TRIED to contact Dreamhost.

    Did Dreamhost mess up with the billing earlier this month? Yep. And as far as I can tell they went through pretty good lengths to fix their mistake. Does this mean that in the process of trying to fix a widespread mistake that some people may not have been processed or notified correctly? Yep. Does dreamhost have a responsibility to take care of those mistakes? Yep. Can they fix a mistake that they are unaware of? Nope.

    Sometimes there’s a boatload of people blaming the consumer, because sometimes the consumer does not take the correct action and gets bitten in the ass because of it. This is one of those cases (and there are many posted on this site). If she had tried to contact Dreamhost a couple times and never got a reply then she wouldn’t get any blame. But according to the OP, that was never tried. She jumped right to doing a chargeback.

  15. Buran says:

    @kc2idf: I agree. If someone claims you’re past due to some date in the future, you’re right to reverse the charge. And how exactly is it her fault now that she admitted she goofed, reversed the chargeback, and DREAMHOST IS NOW REFUSING TO ANSWER EMAIL, REINSTATE HER ACCOUNT, AND WILL NOT ANSWER THE PHONE?

    I’d say re-reverse (reinstate) the chargeback and use someone else. After this and their inability to fix millions of dollars in overcharges, there’s got to be someone better.

  16. bonzombiekitty says:

    Just to add, my comments are about what brought about the initial chargeback, not the lack of communication after the chargeback was reversed. In the latter case, she probably has a reason for doing a chargeback since she paid for a service she no longer has.

  17. LatherRinseRepeat says:

    From what I can see here, they’re both at fault. However, Jasmine could have inquired about the billing first, instead of being trigger happy with the charge back. Sure, waiting a week for a response is a long time. But if you’re not paying for the extra phone support package, then you should have a pretty low expectation of customer service to begin with.

    Good luck with finding another hosting provider. From what I’ve seen, most of them offer e-mail support only for shared hosting. You either have to pay extra for phone support, or you have to get the dedicated hosting package to get higher level customer service. :-(

  18. whirlybird says:

    Hopefully, this time next year, we’ll be reading about that hosting company that went out of business because of their huge billing error.

  19. Jivecat says:

    [quote]Then, I learned—from Consumerist, no less, not from Dreamhost—about the billing mistake.[/quote]

    It’s interesting how she was bothered about Dreamhost not directly informing her of something that did not affect her…

    They did post it on their public blog for all to see, as well as informed those directly affected by the billing issue that they had been charged in error.

    Wouldn’t sending emails saying “we billed some users when they shouldn’t have been billed” to all of their users caused even more customer support requests from people who were scared by the email (before even checking their credit card statement to confirm they were billed or not)?

    I am a Dreamhost customer, and after reading about the billing issue, I checked my email and found that I too had an invoice. I’ll admit, the invoice was a little confusing, saying something like “you owe $x.xx for services up to 1-1-2009″ or something like that. This made me think that I was charged in error.

    What did I do? I logged into my Dreamhost account and created a support ticket asking about the charge. If I didn’t get a response from them, the next step was to contact my credit card.

    However, I got a reply in less than 24 hours. Turns out I wasn’t charged twice and the confusing invoice I got was for the proper renewal of my account. Done.

    I agree that it’s frustrating to have to deal with an issue that has escalated to this point (having account suspended without any prior communication). But I can’t really fault Dreamhost in this case. Jasmine made the initial mistake that set it all off, so maybe she’s just frustrated with herself but feels better laying the blame on Dreamhost?

  20. tawker says:

    @ARNIEC – BlueHost.com is similar in price but they seem to be able to keep their billing done properly and don’t have massive screwups.

    I’e got an account with them and for low cost (oversold) hosting they’re not bad.

    For more serious sites, its next to impossible to beat SliceHost.com. SH’s support is something else (aka its the AmEx of hosting) and they have good prices.

  21. JeffCarr says:

    I really like Dreamhost, and have had nothing but good luck with them except for this snafu of course. I have looked extensively, but I don’t think there is a better hosting provider out there for the same price.

    A simple email or phone call (which is included with your hosting) would have cleared this up without difficulty.

  22. SirCrumpet says:

    My apologies for heading slightly off topic here, but I felt it wouldn’t be right if I didn’t come in here to give props for the Dr. Strangelove reference :)

  23. arniec says:

    @Tawker, thanks for the info. Bluehost looks great! I’m going to check out the other one too, but I may be moving to bluehost……

  24. krunk4ever says:

    Have you tried their forum/discussion board:
    [discussion.dreamhost.com]

  25. gjhead says:

    I left dreamhost about 6 months ago after being with then for about 3 1/2 years. Reading through these comments of yet *another* dreamhost screwup, I’m just amazed that people actually defend Dreamhost. I guess some people like to pay for mediocre service, insecure logins and terrible uptime.