Best of the ISP-Lists

Even Deliquent Customers Have Rights

Members of the ISP-Webhosting list wrestle with the legal problems of punishing clients who don't pay without breaking the law.

[May 21, 2003]

On the ISP-Webhosting list in May, PW asked:

I have a restaurant client that has not paid me for hosting and other Web work. I have tried to work with them on payments since January but they continue to make promises they do not keep. I have suspended their website.

I was thinking of placing a page holder at their URL that states that the website is not available due to lack of payment. Something like: This website has been suspended due to unpaid invoices. We are sorry for the inconvenience. Any input?

[DH noted] "My company always puts something up in place of a suspended site so the site owner can't tell their clients or business associates, 'Yeah the hosting company is down again, I'll find a new one right now.'"

[BB commended] "Very good idea. Lots of people act that way about service ... they don't want to admit that they didn't pay for it."

[AK warned] "Don't do it. I'm not an attorney, but you could open yourself up to a potential law suit."

[BB agreed] "It's one thing to put up a placeholder than just says your company name or something along those lines ... then it is another thing if you say the customer didn't pay publicly on their own website."

[DH clarified] "We don't post a non-payment message, just a generic "This site has been removed from service, please contact support for more information." If your terms of service cover it, though, you could easily allow yourself to post, 'This client can't pay the bills and has been shut down.'"

[AS suggested] "How about a notice like this:

This site is down for administrative (non-technical) reasons. If you have any questions, please contact the Billing Department at .....

That should make it clear enough for anyone who can read between the lines, without getting into any trouble re. slander etc. (which is a non-issue IMHO unless you have a large ticket client, several hundreds or thousands of dollars per month)."

[TC added] "If the telephone company cuts off your phone, people who call get a message along the lines of "the number you are calling has been disconnected or is no longer in service." I agree that something like "the site has been disconnected for Non-Payment" may be a little too strong—it may prompt him to pay, but it may also prompt him to sue for lost business. Certainly that would end any future relationship with the customer. Maybe the relationship is already long gone, but sometimes you can prompt him to pay and keep him as a customer as well."

[PC said] "We've got a standard page which suggests multiple possibilities, including "lack of renewal" (A friendlier way of referring to a past-due account in public). The nice thing is, it's set up as the *first* Apache VirtualHost on that IP address, so all I have to do to activate it is remove a customer's VirtualHost entry without removing their DNS."

[TC replied] "FWIW, our lawyer suggested this notice was OK for a designer who owed us large: "There is no error with the server. You are seeing this page because [] domains have been suspended. We regret any inconvenience this causes."

[JD warned] "Posting anything in public view regarding late payment can be considered making the company's financial status and obligations open to the public, which could harm the business—your client client—and can get you sued. We simply wrote an automated script which removes the FTP account and sets the customer's permissions to null so no one can get to their site, once they have been overdue for 7 days. If we don't hear from them within another 10 days, we wipe their files/configurations off the servers."

[JR complained] "Actually it is open to the public. I mean, just go look up someone's credit rating. You can do that on anyone, anywhere, and at anytime. I feel it is probably in bad taste, and as always, the simple "Site Suspended" notice should more than suffice, and I don't think that's damaging. What's worse: a notice stating the site is suspended, or reporting them to a collection agency?

Actually, you're going about this all wrong. Show up for dinner one night with the wife and kids. Have an agreeable meal, a nice desert, and some espresso, and call it even. (But be sure to tip the waitress.) That is what I truly love about this business. Where else can you have a root canal done in trade? I am having my property landscaped as I write, again, in trade."

[IS urged] "I turn off the website and leave the e-mail on. They may receive all e-mails (so they cant say they lost business) but they can only send locally on the mail server (that would be to us to pay their bill)."

Some suggested billing in advance or using the ISP's terms of service to solve this problem before it occurs:

[VJ stated] "I bill the customers in advance. If you pay me today, your site will work for 30 days, come 35 days site is on suspend. This business is too expensive to run to have customers not pay."

[DH added] "When I start a new hosting customer, I bill them for 6 months up front and then in 3 months send them another bill for 3 months, so that gives them 3 months to get their payment in, and they are always 3 months ahead. We don't have as many problems that way except people don't like to pay that much in advance."

[AK insisted] "The answer is simple. Prompt billing and attention to your accounts receivable should resolve these issues. It's better to just stop the site promptly (with this listed in your TOS), then to wait months for the amount to accrue."

[DH asked] "Wouldn't just outlining something along the lines of 'Upon overdue payment, user accounts will be suspended and flagged as Unpaid' in a TOS cover such things?"

—End