I sell online services similar to web-hosting,
here's what my lawyer has crafted clause on our TOS:
EU & UK CONSUMERS: YOU HAVE A STATUTORY RIGHT TO CANCEL PRODUCTS AND SERVICES WITHIN 14 DAYS FROM THE DATE OF THE CONTRACT. HOWEVER, WE ARE ENTITLED TO CHARGE A REASONABLE AMOUNT FOR THE SERVICES THAT WE HAVE ALREADY PROVIDED TO YOU AS AT THE DATE OF CANCELLATION. THEREFORE, A FULL, OR ANY, REFUND MAY NOT BE DUE. PLEASE NOTE THIS DOES NOT AFFECT THE "PRODUCTS WITH SPECIAL REFUND TERMS", WHERE FULL REFUNDS MAY BE GIVEN, AS APPLICABLE. THIS REFUND POLICY DOES NOT AFFECT YOUR STATUTORY RIGHTS.
Generally, I deduct reasonable amount for the services we already performed within first 14 days. This includes any provision charges, man-hours invested, or percentage of work completed. Rest amount I refund them.
Now in OP's case if a customer uses a $5 VPS for 14 days OP can charge a reasonable amount for services like bandwidth utilized, server provisioned, etc.
@webhostingservers said:
Now in OP's case if a customer uses a $5 VPS for 14 days OP can charge a reasonable amount for services like bandwidth utilized, server provisioned, etc.
Lucky you do not have a nuisance fee cause in that case, he may need to pay extra on top of what he already paid
If it’s not broken, keep fixing it until it is. Blink twice if you agree.
@Abdullah said:
A client recently pulled out the EU Law card, for a full refund, citing the mighty EU law for a VPS service which they customized to their liking and used for 7 days already.
Did you know that while EU law grants a 14-day cooling off period for online purchases, there are exceptions to this rule?
This cooling off period doesn't apply to goods or services that are made to order or clearly personalized.
The law exempts tailor-made services—just like the one-of-a-kind suit you can't return once it's crafted to your exact measurements.
Here is our conversation -
Client -
I would like to proceed with ordering vps as we talked about. But i would like this :
600mbit unmetered
2 cores
2gb ram
20gb disk
$40 per month
600mbit, so i can use the vps as vpn for my own pc and phone aswell.
Traffic wont be hitting 600/600 at all times. It is just a good to have, and peace of mind thing.
If all good, go ahead with this. Thank you.
Me -
I've added Invoice #1428 to account , kindly confirm once paid.
Client -
Hello sir. Are you still here?
Me -
Please advise how you'd like to proceed.
Client -
Since you are running a rather small business, i would like to have a invoice showing the specs agreed upon. Please delete the current invoice, and state all specs on a new one instead.
2 cores
2gb ram
20gb disk
600mbit unmetered connection with no limits
Once this is done, please go ahead and provision the vm. I will pay the invoice asap.
Me -
Invoice sent.
Client -
I tried to reach you via live chat.
Me -
I've set the invoice as per your request.
Paid & activated, client uses the service for next 7 days.
Client -
Hello sir. Just one question for you :
Are you DMCA ignore?
Me -
If we receive any report we will forward it to you.
Client -
Can we lower the price if i want 400mbit unmetered instead?
Me -
I understand that pricing is an important consideration, and we appreciate your interest in exploring different options. However, I believe that the current plan you have, with a 600Mbit unmetered connection, offers the best value.
With the 600Mbit plan, you have a higher bandwidth capacity, allowing for multiple connections.
400Mbit will cost you around $35 with the same vps specifications.
Client -
In that case, i would like to cancel at the end of this billing period.
Client -
Since there has been less than 14 days, i would like to use my right for refund for my server on IP x.x.x.x
Reason being it is from time to time getting some packet loss, and i got a better deal for cheaper, thats why i asked about the pricing. Feel free to take it down any time and perform the refund. If you want, you can paypal me $30 (or send litecoin for $30 instead of refunding $40 back to my card.
paypal : ...
LiteCoin : ...
Me - Issues a prorated refund of $30.
Refund has been issued
Please allow 3-5 business days for the refund to appear on your original payment source & feel free to
let us know if there's anything else we can help you with
Client -
By eu law i have the Right for a FULL refund within 14 days for any online service or items. Please issue the rest of the money.
Me -
We understand that you believe EU law grants you the right to a full refund within 14 days for any online service or items. However, we would like to clarify the applicability of the law in your specific case.
As per EU law, the 14-day cooling off period does indeed provide consumers with the right to request a refund for certain online purchases. However, there are exemptions to this rule, and one of those exemptions includes goods or services that are made to order or clearly personalized, such as our customized plan.
In your situation, the plan we provided was tailored specifically to your requirements and preferences, making it a personalized service. Therefore, the standard 14-day cooling off period does not apply in this instance.
However, we value your satisfaction as a client, and we strive to maintain a positive business relationship with you. Considering this, we issued a prorated refund based on the number of days you had utilized the customized plan. This refund amount accurately reflects the portion of the service that you did not use.
It is not like you cannot resell those resources. Give full refund, or i will take this furter.
In the spirit of fairness, we issued a prorated refund, deducting only for the days the customized service was used. A fair compromise, don't you think?
What's your take on applying this to Hosting services ?
Are you a firm believer in the right to a full refund within 14 days?
Maybe you have a unique perspective to share!
Cheers!
My country is not in the EU, but we also have that law for "online purchases."
How it works in practice:
I buy a HDD in a brick-and-mortar store and it makes clicking sounds.
Technically, it has no bad sectors, it reads and writes normally.
The warranty-claim service guy knows it's going to go bad. I know it's going to go bad. But it is technically OK (for now).
I'm fucked.
I order a HDD online.
I don't like it, for whatever reason (or no reason at all). I can ship it back and get a full refund on my account (I only pay for the shipping).
The same goes for buying monitors. Many manufacturers claim that one dead pixel (even if it's in the middle of the screen) is considered good by them and will not honor a warranty. If I order a monitor online, I can still get my money back.
I've never ever bothered abusing that system. It's a hassle (having to pack and ship stuff back to the manufacturer, fill out the paper forms etc.). However, anything that costs more than a few dollars, I buy online nowadays. Because otherwise, refunds in case of faulty goods can take over 30 days and are not always guaranteed.
As a seller, I'm happy to give full refunds, and if the warranty claims are not reasonable, I cross that customer of the list of people I'm willing to work with. Of course, in EU, one is not allowed to store customer data even for such a blacklist (as emails and cards can be changed). That sucks.
@Abdullah said: What's your take on applying this to Hosting services ?
Are you a firm believer in the right to a full refund within 14 days?
I get a few of these. They only have the right to be refunded for the part they didn't use. As long as you prove they used it for 7 days and there was a cost to you during that 7 days, the customer needs to pay for those 7 days. Many get confused because others will fully refund, that is their choice to do that, it's not required.
@Mumbly said: Bbb..but, UK isn't part of the EU anymore :P
Indeed, but we kept all the rules/regulations/laws. So we largely still act as if we are still part of the EU. That will change over time but Governments and speed...
The EU law is similar to that of Brazil, with a specific focus on intermediate consumers. In the EU, it is permissible to reject refund requests for intangible services meant for public use or services that generate profit for the intermediate client.
@Abdullah said:
A client recently pulled out the EU Law card, for a full refund, citing the mighty EU law for a VPS service which they customized to their liking and used for 7 days already.
Did you know that while EU law grants a 14-day cooling off period for online purchases, there are exceptions to this rule?
This cooling off period doesn't apply to goods or services that are made to order or clearly personalized.
The law exempts tailor-made services—just like the one-of-a-kind suit you can't return once it's crafted to your exact measurements.
I don't think that's the correct exemption. If I were you I'd just get proper legal advice ... get a group together and pay for it and share it, simple. Anyway let's have a look at the actual EU directive which forms the basis for the legal texts:
Before the consumer is bound by a distance or off-premises contract, or any corresponding offer, the trader shall provide the consumer with the following information in a clear and comprehensible manner:
(a) the main characteristics of the goods or services, to the extent appropriate to the medium and to the goods or services;
(b) the identity of the trader, such as his trading name;
▼M2
(c) the geographical address at which the trader is established as well as the trader’s telephone number and email address; in addition, where the trader provides other means of online communication which guarantee that the consumer can keep any written correspondence, including the date and time of such correspondence, with the trader on a durable medium, the information shall also include details of those other means; all those means of communication provided by the trader shall enable the consumer to contact the trader quickly and communicate with him efficiently; where applicable, the trader shall also provide the geographical address and identity of the trader on whose behalf he is acting;
Okay so Article 6 is highly relevant here. Many online companies do not properly provide all the information they are required to. It's a shall not a may. So they must fully identify themselves which means ensuring they have their full trading name, legal name, business number/s, address, phone number and contact email address all clearly displayed on the website. Missing any of that information may mean you've not met your business obligations for selling to EU customers, and they they may be entitled to a full refund for that reason alone. There are further things that shall be disclosed by a vendor prior to sale, I encourage you to read it as many more bits are relevant. Disclosing the complaints handling process is also required as an example.
Article 10
Omission of information on the right of withdrawal
If the trader has not provided the consumer with the information on the right of withdrawal as required by point (h) of Article 6(1), the withdrawal period shall expire 12 months from the end of the initial withdrawal period, as determined in accordance with Article 9(2).
▼M2
If the trader has provided the consumer with the information provided for in paragraph 1 of this Article within 12 months from the day referred to in Article 9(2), the withdrawal period shall expire 14 days or, in cases where Member States have adopted rules in accordance with Article 9(1a), 30 days after the day upon which the consumer receives that information.
Self-explanatory.
Article 14
Obligations of the consumer in the event of withdrawal
...
The consumer shall bear no cost for:
...
(b) the supply, in full or in part, of digital content which is not supplied on a tangible medium where:
▼M2
(i) the consumer has not given prior express consent to the beginning of the performance before the end of the 14-day or 30-day period referred to in Article 9;
▼B
(ii) the consumer has not acknowledged that he loses his right of withdrawal when giving his consent; or
(iii) the trader has failed to provide confirmation in accordance with Article 7(2) or Article 8(7).
In short, on my reading of a vendor must have it in writing that the consumer has agreed to forego their 14-day cooling off period, if you don't have that you are probably obligated to refund the consumer.
Now the exemptions, this is what you're relying on:
Article 16
Exceptions from the right of withdrawal
Member States shall not provide for the right of withdrawal set out in Articles 9 to 15 in respect of distance and off-premises contracts as regards the following:
▼M2
(a) service contracts after the service has been fully performed but, if the contract places the consumer under an obligation to pay, only if the performance has begun with the consumer’s prior express consent and acknowledgement that he will lose his right of withdrawal once the contract has been fully performed by the trader;
Exemption (a) would likely apply in my reading of it, but only if you have it in writing with the consumer's prior express consent.
(c) the supply of goods made to the consumer’s specifications or clearly personalised;
You could potentially rely on this clause as you appear to be doing so.
(m) contracts for the supply of digital content which is not supplied on a tangible medium if the performance has begun and, if the contract places the consumer under an obligation to pay, where:
(i) the consumer has provided prior express consent to begin the performance during the right of withdrawal period;
(ii) the consumer has provided acknowledgement that he thereby loses his right of withdrawal; and
(iii) the trader has provided confirmation in accordance with Article 7(2) or Article 8(7).
This is the clause I think is most likely to apply to VPS and other hosting products, although if you make a custom product then as mentioned you could potentially rely on (c) instead of (m). However if you want to protect yourself in the future from someone lawfully claiming their 14 day cooling off period buying an off-the-shelf hosting product then you'll need to (a.) get proper legal advice not just rely on your own reading or my reading of the directive and then (b.) ensure that you meet ALL of your obligations under the directive.
Comments
I sell online services similar to web-hosting,
here's what my lawyer has crafted clause on our TOS:
EU & UK CONSUMERS: YOU HAVE A STATUTORY RIGHT TO CANCEL PRODUCTS AND SERVICES WITHIN 14 DAYS FROM THE DATE OF THE CONTRACT. HOWEVER, WE ARE ENTITLED TO CHARGE A REASONABLE AMOUNT FOR THE SERVICES THAT WE HAVE ALREADY PROVIDED TO YOU AS AT THE DATE OF CANCELLATION. THEREFORE, A FULL, OR ANY, REFUND MAY NOT BE DUE. PLEASE NOTE THIS DOES NOT AFFECT THE "PRODUCTS WITH SPECIAL REFUND TERMS", WHERE FULL REFUNDS MAY BE GIVEN, AS APPLICABLE. THIS REFUND POLICY DOES NOT AFFECT YOUR STATUTORY RIGHTS.
Generally, I deduct reasonable amount for the services we already performed within first 14 days. This includes any provision charges, man-hours invested, or percentage of work completed. Rest amount I refund them.
Now in OP's case if a customer uses a $5 VPS for 14 days OP can charge a reasonable amount for services like bandwidth utilized, server provisioned, etc.
Lucky you do not have a nuisance fee cause in that case, he may need to pay extra on top of what he already paid
If it’s not broken, keep fixing it until it is. Blink twice if you agree.
My country is not in the EU, but we also have that law for "online purchases."
How it works in practice:
I buy a HDD in a brick-and-mortar store and it makes clicking sounds.
Technically, it has no bad sectors, it reads and writes normally.
The warranty-claim service guy knows it's going to go bad. I know it's going to go bad. But it is technically OK (for now).
I'm fucked.
I order a HDD online.
I don't like it, for whatever reason (or no reason at all). I can ship it back and get a full refund on my account (I only pay for the shipping).
The same goes for buying monitors. Many manufacturers claim that one dead pixel (even if it's in the middle of the screen) is considered good by them and will not honor a warranty. If I order a monitor online, I can still get my money back.
I've never ever bothered abusing that system. It's a hassle (having to pack and ship stuff back to the manufacturer, fill out the paper forms etc.). However, anything that costs more than a few dollars, I buy online nowadays. Because otherwise, refunds in case of faulty goods can take over 30 days and are not always guaranteed.
As a seller, I'm happy to give full refunds, and if the warranty claims are not reasonable, I cross that customer of the list of people I'm willing to work with. Of course, in EU, one is not allowed to store customer data even for such a blacklist (as emails and cards can be changed). That sucks.
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Honestly, there are times when you can sense problems incoming right from the beginning when interacting with a client.
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I get a few of these. They only have the right to be refunded for the part they didn't use. As long as you prove they used it for 7 days and there was a cost to you during that 7 days, the customer needs to pay for those 7 days. Many get confused because others will fully refund, that is their choice to do that, it's not required.
Indeed, but we kept all the rules/regulations/laws. So we largely still act as if we are still part of the EU. That will change over time but Governments and speed...
we say spring is noticed from far away.
guess you have your share of crappy clients.
The EU law is similar to that of Brazil, with a specific focus on intermediate consumers. In the EU, it is permissible to reject refund requests for intangible services meant for public use or services that generate profit for the intermediate client.
https://purplehost.com.br - Reliable, secure and affordable game hosting.
LET?
https://lowendtalk.com/discussion/comment/3665140/#Comment_3665140
I don't think that's the correct exemption. If I were you I'd just get proper legal advice ... get a group together and pay for it and share it, simple. Anyway let's have a look at the actual EU directive which forms the basis for the legal texts:
https://eur-lex.europa.eu/eli/dir/2011/83/2022-05-28
Chapter III is what to look at.
Okay so Article 6 is highly relevant here. Many online companies do not properly provide all the information they are required to. It's a shall not a may. So they must fully identify themselves which means ensuring they have their full trading name, legal name, business number/s, address, phone number and contact email address all clearly displayed on the website. Missing any of that information may mean you've not met your business obligations for selling to EU customers, and they they may be entitled to a full refund for that reason alone. There are further things that shall be disclosed by a vendor prior to sale, I encourage you to read it as many more bits are relevant. Disclosing the complaints handling process is also required as an example.
Self-explanatory.
In short, on my reading of a vendor must have it in writing that the consumer has agreed to forego their 14-day cooling off period, if you don't have that you are probably obligated to refund the consumer.
Now the exemptions, this is what you're relying on:
Exemption (a) would likely apply in my reading of it, but only if you have it in writing with the consumer's prior express consent.
You could potentially rely on this clause as you appear to be doing so.
This is the clause I think is most likely to apply to VPS and other hosting products, although if you make a custom product then as mentioned you could potentially rely on (c) instead of (m). However if you want to protect yourself in the future from someone lawfully claiming their 14 day cooling off period buying an off-the-shelf hosting product then you'll need to (a.) get proper legal advice not just rely on your own reading or my reading of the directive and then (b.) ensure that you meet ALL of your obligations under the directive.