Dreamhost Overbills Customers by $7.5 Million

So, I received this in my e-mail:

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This is just a notice that your DreamHost Account ("zergrinch's Account") has a balance of $188.60 (including any charges not due until 2009-01-28), with $188.60 due (since 2008-12-28).

You also have $188.60 past due (owed since 2008-11-28), and if by 2009-01-28 you do not pay at least the $188.60 part, your account will be automatically suspended until payment is received.

If you would like to CLOSE your account with DreamHost, just visit: https://panel.dreamhost.com/?tree=billing.accounts

Log in if you need to, then click the "close this account" link. If you close your account you won't be charged $188.60 on 2009-01-28... please stay!

WHAT DO YOU OWE MONEY FOR?
We have the last payment on this account to be $2.20 on 2008-01-15 02:11:07. Since then the following charges have been made to the account:

2008-02-28 - $190.80 for "My Crazy Domain Insane" through 2010-02-27.

For full information on your previous balance please visit your account invoice, which you may view from the web panel, here:

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After a quick WTF (I've been delinquent since December 28, 2008 ) I head on to their blog to check things out.

Originally Posted by Josh Jones

We had a teensy eensy weensy little billing error last night… my first clue something was up when I saw this morning’s daily billing report (so far): $7,500,000.

So apparently he typed in 2008 when he should have typed in 2007. Understandable human error, although the software should have caught this boo-boo in the first place. They're working on reversing all the charges, although I imagine they'll be paying through the nose on those credit card chargebacks.

That was a quick chuckle for me, since I turned off autoBill. At any rate, the credit card on their file had already expired.

However, it seems quite a few people are pissed off by the incident, and are screaming bloody murder in the blog comments. There's talk about class-action lawsuits and fraud investigations. Other hosts, like LunarPages, are stating to pounce by offering $40 discounts to Dreamhost refugees.

So, thoughts? While I personally found this lulz worthy and find the comment vitriol rather hysterical, I'm wondering if some of you have been affected by this?

Jam it back in, in the dark.

I don't know of any accounting software that flags up an error on advance billing as a matter of course so unless they use a very specifically tailored bespoke system they can't really blame that. I'm surprised that they'd have a system that would issue that many demands and collect auto-payments after just one wrongly entered date though. If that's genuinely the case then people could probably sue the auditors for not recognising and reporting a dangerously weak billing system. Unless the audit report does mention it of course...

There's nowhere I can't reach.

The guy who made the billing error was none other than the co-owner of Dreamhost himself, hah.

If you have autobilling turned off (like I do), you have nothing to worry about. They're resolving the issue so it's nothing to scream bloody murder about (unless you're so strapped for cash that a $200~300 bill will wreak havoc with your account), but people are experiencing yet more downtimes due to their hosting being suspended for "non-payment". Then again, if site stability is so critical to your business, you really shouldn't be using Dreamhost in the first place. I can't believe people have yet to find this out after their slew of downtimes, DNS issues and SQL problems. (Naturally, the comment posters hitting out at "crybabies" are most likely the ones hosting nothing but porn, mp3 files and movies on their accounts and thus couldn't care less about this entire affair)

LunarPages' offer is simply tit-for-tat, as Dreamhost did the exact same thing to them a while ago. Josh Jones has no qualms about deriding other hosting companies, so it's payback time. It's great how our multi-million dollar IT companies are run by adolescents nowadays.

This thing is sticky, and I don't like it. I don't appreciate it.

I use Bluehost, and so I didn't see any of this. But I still think it's dumb for people to over react so much. Just let the guy fix it, correct the account balances and move on with your life. A day or two without your site can't be that bad? For most people anyway. I imagine there would be some sites that would falter because of the downtime, but like Blah said, that makes them stupid for choosing Dreamhost.

I am a dolphin, do you want me on your body?

Jesus. People make mistakes. They're fixing their mistakes, take responsibility for what they've done, and acting fast to correct the problem.

I don't know why people are bitching so hard. Shit happens. Nothing is perfect.

What really gets me are the people in those comments who are all "FUCK YOUR FLIPPANT ATTITUDE, JOSH."

I think he has a fine attitude. He's being honest, he's addressing the problem, and he expressed remorse for the situation. Isn't that all that matters?

I was speaking idiomatically.

People are claiming that having an unexpected three- to four-digit charge to their credit cards / debit cards can cause credit interest rates to go up, overdraft charges to accumulate and snowball, and mortgage payments to be missed.

Are the banks in USA really that hardcore? If they are, I juuuust might understand why over 90% of the comments in the blog are so angry, while I'm here laughing at the whole thing.

@Shin - Dreamhost is not a publicly-listed company, so I doubt any Sarbanes-Oxley compliant controls and audit are mandated for them

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If you have only that much in your bank account, maybe you shouldn't be running a website and focus more on food and shelter. Could just be me, though. I know if I only had three digits in my bank account, I wouldn't run a site. But hey. Different folks, different strokes.

And yea, banks are pretty hardcore about overdraft fees and refunds and shit. It'd definitely be a battle to get your money returned in a prompt fashion, not to even mention overdraft fees.

FELIPE NO

Originally Posted by Zergrinch

@Shin - Dreamhost is not a publicly-listed company, so I doubt any Sarbanes-Oxley compliant controls and audit are mandated for them

I figured they might be over the audit threshold for turnover for a privately owned firm if the bills sent out amounted to that much. I don't actually know what the limit is in the US but a private company here turning over more than £5.6 million (Subject to their total net assets or average number of employees) needs an audit.

I've been doing nothing but auditing since November, I've got it on the brain.

What, you don't want my bikini-clad body?

Originally Posted by Shin

I don't know of any accounting software that flags up an error on advance billing as a matter of course so unless they use a very specifically tailored bespoke system they can't really blame that. I'm surprised that they'd have a system that would issue that many demands and collect auto-payments after just one wrongly entered date though. If that's genuinely the case then people could probably sue the auditors for not recognising and reporting a dangerously weak billing system. Unless the audit report does mention it of course...

I love it when you talk nerd things.

Anyway Sass, Dreamhost's per-month fee is $11. A lot of people who don't make real money can still afford that, and when other people make (simple, human, understandable) errors that breaks their bank account of course people are going to be mad. They have absolutely every right to be.

Jam it back in, in the dark.