20 VPS Providers Shut Down within 48 hours - Users Stranded

[bigredseo]

This is the problem with the low end VPS market. The entry bar to the web hosting world is very low, and some companies setup multiple "brands" only to have them all come crashing down.

ZDNet just ran a story on 20 VPS providers all shutting their doors and giving their users 48 hours to move the sites (over a weekend - I'm sure many will not even have seen the notice!).

Here's the full article: https://www.zdnet.com/article/20-vp...giving-customers-two-days-to-save-their-data/

The notice sent to the customers of each of the brands are very similar format, so it's being assumed that they were all operated under one umbrella (kind of like how EIG operates dozens of brands (https://hugotonhosting.co.uk/who-are-eig-hosting-and-why-do-you-need-to-know/)

The big question remaining now is whether the move to shut down the 20 VPS providers was part of a "pump and dump" or "deadpooling". Did they knowingly promote their services over Black Friday and Cyber Monday, onboard a bunch of clients, and then shut down only to take the money and run?

The story is still unfolding.

 

[Castordor]

It's sad the see this, these peoples should be ashamed. At first I thought that they might have financial issues but it really looks like it's just a big scam.

 

[HW-J]

Been following this thread on WHT. It's a real shame for the customers. I just hope they manage to get their money back one way or another and also retrieve the data from the servers.

 

[Artashes]

Been following this thread on WHT. It's a real shame for the customers. I just hope they manage to get their money back one way or another and also retrieve the data from the servers.

Chances of getting their money back is close to 0%, even in case of a legal case. However, perhaps this will attract the attention of authorities. There needs to be a precedent created with adequate consequences, to send a message to the rest of the industry and those looking for a quick buck.

 

[OVHcloud_Phil]

Yea, this is pretty ridiculous. I can't recall ever seeing something quite as big as this in the industry before. I wonder how many customers were affected.

 

[easyhostmedia]

Also things in common with all the mentioned hosts

in whois info are

IP Location: Georgia - Atlanta - Linode Llc

and Registration Private: Domains By Proxy, LLC

 

[easyhostmedia]

Chances of getting their money back is close to 0%, even in case of a legal case. However, perhaps this will attract the attention of authorities. There needs to be a precedent created with adequate consequences, to send a message to the rest of the industry and those looking for a quick buck.

The main issue is then the hosting industry is not regulated, so anyone can set up a hosting company, take peoples money and then shut down and run. companies like paypal dont help when they will protected these people, so buyer cant get their money back.

ebay is full of these sorts of hosts. Here is a prime example of a current hosting offering
MASTER RESELLER HOSTING CPANEL/WHM (£5.99 PER YEAR) - Unlimited Bandwidth/ Disk Space
no way will this host survive at these prices

 

[easyhostmedia]

Been following this thread on WHT. It's a real shame for the customers. I just hope they manage to get their money back one way or another and also retrieve the data from the servers.

little to no chance of either getting money back or their data from servers.

It is for reasons like this people should take their own regular backups to their local PC/laptop or to a 3rd party backup server

 

[Artashes]

The main issue is then the hosting industry is not regulated

I was pondering about it a lot today. I think I'd rather it stay unregulated, as advantages may outweigh the disadvantages.

Anyone purchasing 5-dollar unlimited everything plans on eBay, or from sketchy providers kind of deserve what's coming. It's a necessary education for being lazy and not doing the research.

 

[bigredseo]

If you use a credit card as payment, often the credit card company will be happy to return your money to you based on the "failed to provide service/product" clause.

As far as regulation, I'd prefer not to have that too. If you get into the hosting end of things, it would be very easy to creep into web design, computer repair, and other services.

As they say, buyer beware. People should always be checking where the address of the company is physically located, and companies should list their LLC and links to LLC registrations on their websites too.

 

[easyhostmedia]

If you use a credit card as payment, often the credit card company will be happy to return your money to you based on the "failed to provide service/product" clause.

As far as regulation, I'd prefer not to have that too. If you get into the hosting end of things, it would be very easy to creep into web design, computer repair, and other services.

As they say, buyer beware. People should always be checking where the address of the company is physically located, and companies should list their LLC and links to LLC registrations on their websites too.

In the UK you only get section 75 protection with credit cards if the cost is over £100 and with hosting being non tangible its hard to prove you never got anything.
Also in the UK you need to register any business with HMRC (tax office), but you dont need to be registered as a limited company.

 

[bigredseo]

In the UK you only get section 75 protection with credit cards if the cost is over £100 and with hosting being non tangible its hard to prove you never got anything.
Also in the UK you need to register any business with HMRC (tax office), but you dont need to be registered as a limited company.

Ah.. in the US, it's protected no matter the amount - even $1.00. In a twist, the burden of proof lies in the seller proving that the client received the information/service/product. The Consumer Protection Act is very much on the side of the consumer and not the business owner.

Years ago, we actually used to have our clients sign and fax (or email) a screenshot of a form with their credit card number filled out, and their signature. That was then to be used if we ever had to fight for our money etc. Without a signature on file, the charge could easily be voided.

You may think that this is an impossible task for a hosting company to ask for that, but we had thousands of cards on file and with the few that refused to provide the form, we just rejected them as clients. Afterall, the use of the card was both protection on our end, and theirs. If we had a dozen refuse to sign it, I'd be surprised.

The signature page was right at the time where we were changing from one credit card provider to another, so that also helped in enforcing the request for signature. Without it, the clients would have to log in each month to pay their bill with a card. The signature allowed the card to be stored on file and charged.

 

[easyhostmedia]

Ah.. in the US, it's protected no matter the amount - even $1.00. In a twist, the burden of proof lies in the seller proving that the client received the information/service/product. The Consumer Protection Act is very much on the side of the consumer and not the business owner.

Years ago, we actually used to have our clients sign and fax (or email) a screenshot of a form with their credit card number filled out, and their signature. That was then to be used if we ever had to fight for our money etc. Without a signature on file, the charge could easily be voided.

You may think that this is an impossible task for a hosting company to ask for that, but we had thousands of cards on file and with the few that refused to provide the form, we just rejected them as clients. Afterall, the use of the card was both protection on our end, and theirs. If we had a dozen refuse to sign it, I'd be surprised.

The signature page was right at the time where we were changing from one credit card provider to another, so that also helped in enforcing the request for signature. Without it, the clients would have to log in each month to pay their bill with a card. The signature allowed the card to be stored on file and charged.

In then UK we have The Distance Selling Regulation which from June 2014 got replaced with The Consumer Contracts Regulations which give any consumer 14 days from then date after receipt of goods to return goods bought online without a reason (few exclusions such as personalised items and items/services created to your specifications), with hosting if someone ordered a plan and in then order process they decided they did not want to default 5GB, but wanted it increased to 10GB then they have created the plan to their own specification, so would not be covered, also if the hosting is to run a business website then it is a B2B sale so not covered.

 

[bigredseo]

with hosting if someone ordered a plan and in then order process they decided they did not want to default 5GB, but wanted it increased to 10GB then they have created the plan to their own specification, so would not be covered, also if the hosting is to run a business website then it is a B2B sale so not covered.

Wow - that's crazy!

 

[easyhostmedia]

Wow - that's crazy!

and in then UK we have nothing like the BBB and then you have paypal who class hosting as intangible, so you are not protected.

 

[OVHcloud_Phil]

In then UK we have The Distance Selling Regulation which from June 2014 got replaced with The Consumer Contracts Regulations which give any consumer 14 days from then date after receipt of goods to return goods bought online without a reason (few exclusions such as personalised items and items/services created to your specifications), with hosting if someone ordered a plan and in then order process they decided they did not want to default 5GB, but wanted it increased to 10GB then they have created the plan to their own specification, so would not be covered, also if the hosting is to run a business website then it is a B2B sale so not covered.

Interesting... so any modifications to a product such as upgrading the disk space or RAM of the VPS would void the 14-day refund because it's not the default configuration?

 

[easyhostmedia]

Interesting... so any modifications to a product such as upgrading the disk space or RAM of the VPS would void the 14-day refund because it's not the default configuration?

Only when you originally set it up as your are personalising it to your own specs, because then it is not the original item specs as off the shelf.

https://www.which.co.uk/consumer-rights/regulation/consumer-contracts-regulations

Exemptions

There are some circumstances where the Consumer Contracts Regulations won’t give you a right to cancel.

These include, CDs, DVDs or software if you've broken the seal on the wrapping, perishable items and tailor-made or personalised items. They also include goods with a seal for health protection and hygiene reasons that's been broken.

Also included are goods that have been mixed inseparably with other items after delivery.

Always check the terms and conditions

The minimum cancellation period that you must be given is 14 days but many sellers choose to exceed this, so always check the terms and conditions in case you have longer to change your mind.

Cancelling services
Your right to cancel You have 14 days from entering into a service contract in which you can cancel it.

The trader shouldn’t start providing the service before the 14 day cancellation period has ended, unless you have requested this.

If you request a service starts straightaway In this instance you will still have the right to cancel, but you must pay for the value of the service that is provided up to the point you cancel.

For example, if you buy a service like gym membership and start using the gym and then change your mind within this 14 day time period, you will be refunded but could be charged for the amount of gym time you used.

If the service is provided in full within 14 days The right to cancel can be lost during the cancellation period if the service is provided in full before the 14 days elapses.

Exemptions There are some contracts where you won’t have a right to cancel a service. For example, hotel bookings, flights, car hire, concerts and other event tickets, or where the trader is carrying out urgent repairs or maintenance.

This is then strange part

The trader shouldn’t start providing the service before the 14 day cancellation period has ended, unless you have requested this.

If you request a service starts straightaway In this instance you will still have the right to cancel, but you must pay for the value of the service that is provided up to the point you cancel.

For example, if you buy a service like gym membership and start using the gym and then change your mind within this 14 day time period, you will be refunded but could be charged for the amount of gym time you used.

As this means once you provide the enduser with the login details and they login then they have started using the service and say 4 days in then tell you they want to cancel. you have the right to refund them minus the 4 days they have had your service.

 

[HW-J]

I'm guessing no one from here was directly affected by this? Some of the companies websites are still loading and accepting orders... I hope no one falls into the trap thinking they're still trading!

 

[easyhostmedia]

I'm guessing no one from here was directly affected by this? Some of the companies websites are still loading and accepting orders... I hope no one falls into the trap thinking they're still trading!

Most of them sites are still running and as you say accepting orders and some people will still be ordering

 

[kunnusingh]

I think owner is same and maybe using owned WHMCS license so Billing software company like WHMCS need to revoke their license. (Maybe it does not look right but they can prevent this from happening in future).

Customer need to report this to Cyber Crime department/authority.