How My Webhost Screwed Me Out Of $5000

By | March 5, 2013

I am currently having a dispute with my previous web host (Colo4jax), so I thought I would share it with you, as an example of the kind of thing that sometimes happens when running a company. For many years I had most of my sites hosted at Colo4Jax.com, which is a small web hosting company that offers very low prices and personalized service. In the last few years I hosted with them, they had a large amount of downtime. One time all my sites were down for over 2 days, another time they were down for 14 hours, other times for a few hours. Although none of this was good, I have always had bad experiences with web hosts (see my posting at http://www.impulsecorp.com/web-hosting-sucks) so none of this was bad enough to make me want to go through the huge trouble of having to switch hosts.

Then 2 years ago, cloud hosting started getting popular, so I figured I would give it a try. Cloud hosting seemed like it would solve all of my hosting problems. So, I switched some of my sites to Cartika.com which was one of the top 3 cloud hosting companies at the time. Although it was not perfect (see my blog posting at http://www.impulsecorp.com/cloud-hosting-does-it-live-up-to-the-hype about this topic), it was much much better than any other hosting I had ever used. So, after a year I decided to switch all my sites to Cartika.

It took my almost another year to move all of 300+ my sites over. Over that year I cancelled my Colo4jax servers one by one as I was done using them, and I happened to discover that Colo4jax.com was double billing me for one of the servers since 2008. I am sure it was an honest mistake on their part, but the end result was that they had overbilled me by $5555 (this is the amount they calculated in an apology email to me).

Before I continue with that story, let me first tell you about another billing problem I had them. In July of 2009 ago I prepaid them $743 to setup a backup server and internal network for me, so I could easily make backups of all my sites. Unlike the normal servers they setup for me, this involved some custom configuration to create a private network among my servers so the data could be backed up much much faster. It was the kind of thing web hosts do all the time, but not something they could do for me instantly. It should have only taken a week at most, but after 1.5 years and several emails to them about why they never set it up, I gave up and cancelled the order and asked for a refund. Despite many promises of sending me a check, they never did. Finally after several more months (and many nagging emails from me) they sent me $600 and promised the other $143 in a few days. But, they never sent it (despite many more emails from me about it).

So, when I discovered the $5555 double billing error, it was 1 year since I demanded a refund for my backup server that they never setup for me, and that they never fully refunded me for. Since they never fully payed me the refund they promised for that backup server, I knew there was no hope they would ever refund the $5550 they overbilled me, even though they did not dispute at all that they owed it to me. So, when they offered to give me hosting credit for the $5550, I accepted because I had no other choice. Normally, I would not have cared at all about getting a credit vs a refund, but since I was in the process of shutting down all my Colo4jax servers, it was not what I wanted but I figured I would just keep a few of my sites hosted with them long enough to use up the credit.

In the subsequent months though, there were even more downtime problems with Colo4jax, so I decided to switch all my sites to Cartika and shut down my all my Colo4jax servers even though I still had over $2500 in credit with them. The problem was that when I asked them for a cash refund of the balance of the credit, they said no because I already had agreed to take it as a credit.

I am not sure of the exact legal issues involved, but I would think that overbilling a customer and not refunding it would be considered fraud, since it amounts to what basically was stealing money from me. Once they found out about the billing problem and refused to refund it, it was no longer just an honest mistake on their part. And, to make it worse, they did it twice, since they had done it once before by charging me money for the backup server that they never setup, and then never fully refunding that money (despite all their promises to do so).

What do you think?

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5 thoughts on “How My Webhost Screwed Me Out Of $5000

  1. Spike

    File a BBB complaint in the city where their HQ is located. If the complaint is not resolved, contact the Attorney General’s office in that city and ask them to investigate. This worked for me in a dispute with a company that did not pay my affiliate earnings. Be patient. It may take a few weeks/months to resolve but don’t throw money away!

  2. steve

    I use https://www.ubiquityservers.com for all my servers and they have been good. I can say they haven’t overbilled me for sure. Why they wouldn’t setup your backup servers is also weird.
    I just setup http://scrabblecheat.net and its been running for a month with no downtime.
    I know they can customize solutions for you and they will take a week and not a year and a half. Yours sounds like a normal type of network request.
    And now anyone that googles Colo4jax might see this page if google rates it high for like Colo4jax reviews or Colo4jax ratings.

  3. Michael Hallisey

    Hi Eric,
    You might want to try the hosting company I have been using for three years now http://rimuhosting.com/ They have been awesome! The biggest downtime I have had with them is when a major power system blow up in there facility and they had a new one installed and all the websites back up in six hours. I have never had any billing problems with them and when I need help on the server, like setting up something I don’t know how to do, they do it for me and email be back in less then an hour every time! I don’t think I have had any downtime in the last year. You might want to give them a try, they are the best company I have used.

    1. Eric Borgos Post author

      Thanks, but I am very happy with my current host (Cartika.com cloud hosting).

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