Web Hosting Fraud and how to be cautious!!

I have been mulling over moving this blog to a self hosted website. The thought came to me after seeing many awesome blogs as self hosted (like chandoo or tipguy blogs). The flexibility and control provided by self-hosting is immense (see 10 reasons to self-host a blog) and I felt it could be like moving one step further in terms of my blogging interests. Although there are people who are very popular online without any self-hosting blog (Rashmi or Rohit) but for me I thought let me research a bit on self-hosting before I move this blog.

So I started searching and found a super beginner’s guide for starting your own website. I realized that essentially I need two things:

1. A Domain Name [Similar to say Company Name]
2. A Web-Hosting Subscription [Similar to Office Space for rent]

I searched and found that there are literally millions of companies providing both the services with variety of choices, options, features, claims and rates. Also to confuse you further there are several websites providing the top 10 web hosting company lists. And after reading so many websites on how to choose the web-hosting companies if you could manage to choose some company, and if you search about the review of that specific company, you will find that there are equal number of positive and negative review comments, leaving you totally exasperated.

But the worst is yet to come. After all this (apart from sending emails to some folks like chandoo or find who-is information about popular self hosted blogs), I zeroed on to BlueHost web hosting company. I ignored the review comments and focussed on least price hosting company (I felt like gambling and thought let me taste the world of self-hosting). The one thing good about BlueHost is that they give the domain name registration free and the domain name is registered in your name. A lot of companies cheat by registering domain name in their name and then it is difficult for the customer to move away from them. Imagine you want to start a company and when you ask an agent to register the company, he did register in his name rather than yours. It amounts to blatant cheating, but who reads the “Terms and Conditions”.

One such cheating I came across when I tries to sign-up with the BlueHost company. Before I entered the credit card details, I decided to click on Terms and Conditions.

I was shocked to realize that once I enter the credit card details, the BlueHost can charge me on recurring basis unless I go and tell them not to charge. The terms indicate that all responsibility lies with me and they are legally free to charge me, if I fail to inform them that I no longer want their services.

When I searched the other hosting options, every single provider has the same mechanism, which virtually ensures that you stay with them forever. A recurring payment (also known as a 'continuous payment authority') is an automatic regular payment which is set up using your debit or credit card.

The biggest problem with recurring payments is that only the company can stop the recurring payment and you can not. So if you have to stop the payment, the onus is on you to convince the company to stop the payment. The company may put additional conditions or charges for cancellation of such recurring services. The worse is that sometimes it may not be easy for you to get the company to cancel the recurring payment.

The other aspect of recurring payment is that the company keeps your credit or debit card information on their systems for charging in recurring fashion. This may lead to privacy issues

BTW, if you think you are smart ass and can cancel the credit card to prevent the recurring charges you are wrong, since that makes you liable for legal charges by the company whom you have authorised for this recurring charge. Also if you try to tell the bank to stop payment to the company, bank will only act if you can prove that you did not authorise the company and it is a fraud. In any other case bank is obliged to honour the recurring credit card charges.

The only option for you is to work through the company by going through the cancellation policy that you probably did not read while signing up.

The one option that I think can work is to use virtual credit card (for e.g. HDFC NetSafe) which allows to create a virtual credit card with a chosen limit and validity. The other option is to use a pre-loaded card for such transactions which has a limit of transaction that you have pre-loaded. But be aware that this does not free you from the legal binding about accepting the recurring payment. It only ensures that the company has to chase you for the next recurring payment and not you to stop that recurring payment.

My Advice: Whenever using credit card (typically online), ensure to read “Terms and Conditions” specifically looking for recurring payment and cancellation policy.

As for my self-hosting journey, I need to find a company who will accept just a one time payment and do not force me to enter a recurring payment mode.