Major Dreamhost Billing screwup. | Hacker News Reader

Major Dreamhost Billing screwup.

dreamhoststatus.com

24 pointsptm20 comments

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This is a pretty sterling example of Paul Graham's "dignity is deadly" quote:

> When you evolve out of start-up mode and start

> worrying about being professional and dignified,

> you only lose capabilities. You don't add

> anything... you only take away. Dignity is deadly."

I'm a Dreamhost client, and I've been pretty happy with their overall service. This isn't the first time they've admitted doing something stupid.

Before Dreamhost, I was a client of Westhost. They were fine too, until they instituted a major migration to virtual servers.

It was a disaster.

Site response time slowed to a crawl, and their forums were saturated with angry customers. Trouble ticket response time went from hours to days.

Westhost handled the situation "professionally". By this, I mean they did not acknowledge the problem for several days. They eventually posted apologies and explanations that contained no information about the root cause - just empty words.

"Professional" can mean a lot of things. It usually means "Cover your ass".

The problems persisted for weeks. I'm sure Westhost has since resolved the technical problems with the virtual domains (since they are still in business). But their "professional" communication with customers made me leave.

The deal with Dreamhost is:

1) When they do something stupid, they admit it immediately and take their lumps.

2) They come across as a bunch of clowns sometimes.

I don't think you can have (1) without (2). Maybe it can be done, but Dreamhost won't be the company to do it. Their company DNA is pretty well fixed.

Preamble: This is a post I wrote on a private message board to a friend of mine who got hit by overdraft fees to his debit account when DH made their screwup.

Holy crap.

Just... wow.

That really really sucks that you got bitten by this, $friend.

As it so happens I work in the ISP billing industry. Writing billing software is what I do here. This Dreamhost screwup is pretty much the largest, most high profile disaster you can cause. Ouch. Kudos to them for resolving the situation quickly, but I would not be at all surprised to see some lawsuits headed their way.

I hope this can serve as a warning to us all as to why you should never ever ever give your debit account information to any sort of automated billing system. The risk of getting screwed over, hard, is just too high. Of course banks love to hit you with huge nasty fines if you overdraw your debit account. I've been nailed by that in the past. For a $0.50 overdraft. After I had just put a large chunk of money in that account, which they hadn't posted yet. Blech.

Also!

Check your billing statements each month to make sure that they're correct. Just... trust me on this one.

I hope you get everything resolved quickly $friend. Dreamhost may be fixing things on their end but you might have to tag-team your bank to get them to make things right. Fees, fines, overdrafts, and other similar charges can really screw you up. And banks are famously recalcitrant when it comes to fixing such situations. (Credit Unions are significantly better. I highly recommend them over banks.)

Sheesh, I'm getting the chills just contemplating the situation.

Good luck getting everything fixed up folks.

LOL, one of the comments on http://blog.dreamhost.com/2008/01/15/um-whoops/ reads:

#20 Tiara Says: January 15th, 2008 at 10:31 am

Well if you guys need a place to go after fleeing from this billing crisis, you should definietly head over to Lunarpages:

"For all DH webmasters looking for an escape, Lunarpages has created a coupon code just for you! Use code DHRefugees to receive $40 off hosting with Lunarpages and we will also buy out the remainder of your contract with DreamHost! (Up to 9 months!) If you have several months left on your contract with DH, sign up for Lunarpages and email us your billing receipt (not the triple billing ones.. lol) and we will add that extra time to your account with us!"

I didn't read all 900+ comments, but I wonder how many were affected like the first commenter (overdrawn bank account). Dreamhost isn't likely to refund the cost of the overdraft fee, which unfortunately, can get expensive depending on your bank. It'll be interesting to see what transpires in the coming days.

"If, because of this billing mistake, you somehow incurred some fees from your bank or credit card company, please let us know after tomorrow (today we are just replying to all 10,000+ billing messages with a generic explanation) and we'll do our best to make it right for you."

http://blog.dreamhost.com/2008/01/15/um-whoops/

If Dreamhost doesn't refund overdraft fees the chatter on the internet will be very, very bad PR.

I used Dreamhost at one point and regretted it the month after. They're just plain awful. Not even their shared hosting plan is what they claim it is... they shut down mine after ONE blog post became popular and started receiving a lot of hits.

Just stay away.

I've been using DH for almost 10 years (I've switched to dedicated servers years ago so I haven't been affected by those shared hosting issues, though their recent main switch / nameserver failure did.)

I don't know anybody inside DH personally, but I initially liked about them having atmosphere of a company run by a bunch of geeks. It's been inspiring to watch how they handle various issues as they grow, and yet try to keep the atmosphere. Sure they've made some basic mistakes which can be criticized as "unprofessional", but any company can do so. As the number of customers grow, you need to hire more staff and I think it gets difficult to keep the high standard.

When you start up a company, probably it consists of only smart people. As you grow and you have to hire more staff, some junior, and it'd be getting difficult to for you to track what everyone is doing... how will you handle the situation?

It's impressive how well they've handled it. They posted an immediate, transparent blog post, and gave regular updates.

I think the light-hearted (whoops! we screwed up!) tone is the absolute wrong one to take. Have you seen some of the comments? The over billing mess caused a lot of damage to their reputation. It wouldn't be a big deal, but refunds from an overcharge can take several weeks. If they charged someone's checking account, that's bad news.

http://blog.dreamhost.com/2008/01/15/um-whoops/

Wow.. Yeah, that one is way over the top. It seems like customers are going to be upset that he's spending time putting together a silly blog post instead of fixing the problem. Status updates are great, but childish posts.. Not so much.

It's kind of funny when you scan through the replies to that post. Some people say the post is too light-hearted, a few say they're leaving, and another large group appreciated and enjoyed the post. It's hard to tell whether the result is a net gain or loss of business, but I certainly wouldn't be quick to say that it is definitely a bad thing.

I don't see any other way to handle those situations, really.

If you're trustworthy, then operate in full daylight.

Compared to Omnidrive, DreamHost handled a technical problem infinitely better.

I got a nice email from them telling me they are very sorry and they will be refunding the money.

have they not heard of testing!!!

I'm glad I prepaid until 2009.

is dreamhost okay? im planning to move to dreamhost... do they have SSH and SVN?

Yes, they do have those.

Wow... nice job Dreamhost!

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