All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
Service suspensions due to charge back
Dear LowEndFolks,
Today a popular hoster suspended my active service without notification or details on why, except "chargeback".
Over the course of a day, I learned that a payment processor apparently charged back $10 from a two year old payment. Because this payment processor was in between paypal and the hoster, I have no account there or way to fix the issue. The charge back wasn't caused by me nor did I receive the $10.
However not only does the hoster hold me accountable for this error, they also suspend my active service.
I'm at the point where I would love to just pay the $10 and get the service released from the being taken hostage.
Anyways, I was wondering if this was a common practice? I can understand that chargebacks are an issue and that some customers can get pretty nasty, but still. How is this even legal?
Comments
@sim: If you're really innocent, then I would get in touch with PayPal about this, documenting what you know. You can't expect the hosting provider to investigate this issue.
you can ask the hosting provider to prove the "chargeback" was came from your PayPal account?
What popular host?
[reducted to protect corrupted regime]
I'd argue otherwise, if the hosting provider used some other middleman as a payment proccessor and they decided to chargeback then it's upto the hosting provider to raise it with them as to why that is the case.
If the customer genuninely didn't initate a chargeback and the customers bank didn't do it either then it falls on the seller as far as I'm concered as they're the one with the contract with the payment provider.
Sorry but that doesn't make sense, why would a payment processor chargeback a payment from 2 years ago?
We look forward to your upcoming court battle after you retain the necessary legal advice to go forward with the case.
Okay, fair enough, if there was a middleman chosen by the hosting provider.
On second thought, though, I've never heard of anything like this (a "chargeback" after two years), which makes me think that there is more to the story ...
At first contact and inform them for the issue, telling them that you will immediately investigate what happened with paypal.
But what you write, is not clear and it is a little suspicious. Paypal itself does not do chargebacks. If there is leak of funds and a payment already being done by system error or any other cause, you will see a negative balance i n your account and maybe will see as frozen the option for paying, allowing only receiving funds.
If the paypal payment is being doing by charging a credit card or a bank account, then, again, paypal won't chareback a payment to the hoster if the bank asks back for funds. Instead, you will get negative balance and you will get probably a frozen account till you add funds to eliminate the loss.
How are we sure the hosting provider has actually faced a chargeback? Could it be a shady excuse to terminate the service for some other reason?
You charged back a 2 year old payment. You can't see it, we won't prove it, but it totally happened and we are terminating your service.
Possible, depending on how shady the unnamed hosting provider is.
How do you know that it was a two year old payment if the host only responded with “chargeback.”?
who else can initiate chargeback? PayPal on it's own or something, if yes, in this case PayPal is doing illegal activities as they do act on your behalf and instead of you!
Personally, I don't believe that PayPal does illegal activity and in this case PayPal account holder is responsible!
Pretty sure it wasn't a PayPal charge back.
OP -> PayPal -> Unnamed Payment Processor -> Hoster
OP, correct my hunch and understanding if it's wrong, but I believe the payment processor in question is 2checkout?
So payments goes something like: PayPal -> 2checkout -> host
And 2checkout did the chargeback?
Was it 2co? Makes me nervous for an important storage vps (2TB)
More info required but if this is 100% accurate with no important details left out I would imagine any host with half a brain would listen to your side, unsuspend the account and sort it out without impacting your service.
Indeed.
We'll see whether @sim (= the OP) returns with a more detailed follow-up. (I tend to doubt that he will.)
oh, we had experience with them at the beginning (around 2010), they do falsely and illegally acting on behalf and instead of customers as we had similar experience where customer paid by card for half of project cost and after a couple weeks suddenly a fake chargeback, customer never claimed it! as all paperwork done properly and we had a feedback from customer.
After such lovely experience with 2CO we requested to close our account and they did managed just to do it last year.
Update: After a day of what can only be described as begging, the service was reactivated, but the issue is not entirely cleared up.
I used PayPal to pay, but 2Checkout was in the middle. As I don't have a 2Checkout account, it is hard for me to tell what's going on. The PayPal transaction shows up as being paid, no chargeback.
The hoster is less than forthcoming with detailed information.
After asking multiple times, the hoster pointed me to an old inovice (which was paid and not charged back).
I will not name the hoster here, as they clearly have the upper hand and are not afraid of just talking down the service (prepaid for a year + credit in the account).
i had a cc get compromised - some douche tried to buy shoes online - the bank queried and put a hold on it etc. all good.
they then went thru a whole bunch of other transactions for online services - some I had been paying for 2 years - and did chargebacks on them. wtf would they cancel and chargeback services I had been paying for 2 years!!!
completely unsurprisingly these providers were very pissed off and cancelled my services immediately. i dont blame them at all.
I am still in dispute with my bank over this issue - it has caused me a load of pain. one of the cancelled/chargedback services was a backup of a live hosting service - 250 accounts and 13months of backups - all gone. the primary backup is still in place and i dont need 13months of backups on that service but still lots of pain to rebuild, lots of drama with suppliers and damaged relationships.
Bank does not give a shit about customer. Unless you are super rich.
Most of the time bank believe that people use their services because we don't have a choice to pay online
Something does not add up here. I believe most countries have a 90-180 day limit for chargebacks, performing a chargeback on a payment from 2 years ago is not possible with most payment processors and banks. My advice to you is if your host did indeed say the word "chargeback", then backup your data and migrate to a new host immediately because either:
A ) They don't know what they're doing or what they're talking about.
OR
B ) They're lying to you.
Neither option is a good one so leave that host immediately before it gets worse.
Also, as to whether it's common practice no it is not. Common practice is to terminate the client immediately as soon as a chargeback occurs because in 99.9% of situations only the person paying for the service is able to initiate a chargeback and 100% of chargebacks cost the seller money (usually more than the cost of the service).
The way you describe it, it sounds like they're holding you hostage.
Why not name the provider? It could serve as a heads-up to others.
In any case, as @KuJoe also says, you should move away from this provider as soon as possible.
Two years seems like a lot of time for a chargeback.
`
`
This thread smells. Something ain't right and it's not my gut.
Its your upper lip.