Overcharged and called debt

PDKSite

Hi all,

I could use some advice. I rented a dedicated server from my hosting company (heart internet) last year with no long-term contract. It was for another company and used the owner's credit card details to pay for the subscription.

We're no longer in touch, and in January this year either the card expired or he cancelled the payment.

I've just learned that since January they set up a new direct debit with the bank details I had registered to the account for another service. I was not notified of this (and they have acknowledged that they didn't notify me) and didn't give my permission in any way.

After failed talks to them I discovered the direct debit indemnity, which my bank just used to claim the money back on my behalf due to lack of notice.

However, now they have threatened with debt collection and passing the info onto credit reference agencies.

Their T's and C's say that if payment cannot be taken then services will be suspended or terminated, which should have happened in Jan / Feb when the card failed.

Can anyone point me in the direction of whether I can protect myself from this or do anything about it?

bris

It may not be a long term contract but there will still be a cancellation period. I will assume you never contacted anyone to cancel so you are still owe them the money until you do.

You really need to phone them and get the service cancelled and discuss it with them from there.

Just stopping the payment method does not stop the contract.

unholyangel

B2B rules apply so you won't have as much protection as consumers.

There is still some protection for b2b but not much. It may be advisable to see if you can get a free half hour consultation with a solicitor so they can go over your T&C's.

Did you have a contract with your client which made clear they are responsible for the renewal costs? If so, you should be able to recover the money from them (I also presume that the contract must be in your name on behalf of your client rather than in your clients name?)

PDKSite

Thanks for your replies.

I didn't tell them that I wanted to cancel, however I would have if I had known they were going to charge my bank instead of the card.

I've gone over the terms and conditions which I agreed to, and the relevant section says that if payment cannot be taken, the service will be suspended or terminated. There's also a section that says they will attempt to use another payment method registered against the account.

So they set up a new direct debit without notice or permission - something which they're not allowed to according to the DD guarantee.

My thinking is that they should have either set up the DD and sent me notice, which they are allowed to do, or they should have suspended the service as per their terms.

Are they allowed to set up a direct debit without permission and then say that I have to pay when I got no notice?

unholyangel

PDKSite wrote: »

Thanks for your replies.

I didn't tell them that I wanted to cancel, however I would have if I had known they were going to charge my bank instead of the card.

I've gone over the terms and conditions which I agreed to, and the relevant section says that if payment cannot be taken, the service will be suspended or terminated. There's also a section that says they will attempt to use another payment method registered against the account.

So they set up a new direct debit without notice or permission - something which they're not allowed to according to the DD guarantee.

My thinking is that they should have either set up the DD and sent me notice, which they are allowed to do, or they should have suspended the service as per their terms.

Are they allowed to set up a direct debit without permission and then say that I have to pay when I got no notice?

You're confusing matters.

Yes there are requirements to follow when setting up a DD under DD guarantee but that only allows you to reverse the DD, it does not mean that the monies owed are not owed.

If you agreed to enter into the contract with them and failed to cancel, then monies are due. If you haven't written a provision into your own contracts with clients to account for this then its very possibly going to have to come out of your pocket.

How you need to deal with your own clients will also depend on whether they are consumers or businesses themselves.

As a business, you really need to read the terms and conditions of all your contracts - as above, businesses do not have the same protection as consumers, it is possible to waive certain rights in a business contract.

PDKSite

Thanks again for your replies.

I agree that I entered into a contract and didn't cancel, but there was no need to cancel as I believed the payment was being taken from the original card.

Can they really set up a direct debit without notifying me and then hold me accountable?

unholyangel

PDKSite wrote: »

Thanks again for your replies.

I agree that I entered into a contract and didn't cancel, but there was no need to cancel as I believed the payment was being taken from the original card.

Can they really set up a direct debit without notifying me and then hold me accountable?

Again, the DD is a red herring. The money is either owed or it is not. The DD set up has no bearing on whether the money is owed, it is merely the payment method.

If you signed a contract with them in your name and not your customers then yes, they can hold you accountable as you are the one who is in contract with them - not your customer. You said it yourself, they have in their T&C's they may try an alternative payment method if the card registered fails.

And again, you may be able to recover the money from your own customer but (as above) that will depend on the contract between you and your customer.

wealdroam

PDKSite wrote: »

Thanks again for your replies.

I agree that I entered into a contract and didn't cancel, but there was no need to cancel as I believed the payment was being taken from the original card.

Can they really set up a direct debit without notifying me and then hold me accountable?

Unholyangel is right, but just to add:

Relying on the credit card not being available to allow a contract to terminate is foolhardy.

As has been mentioned wrt the DD, the credit card was only the method of payment.

Their T&Cs structure is very complicated to someone not involved with the industry, but in para 9.8 on this page I have found:

If your chosen method of payment is not authorised by your credit card provider or bank, you hereby authorise us to seek payment from any other credit card, debit card or direct debit registered against your account.

This appears to authorise the alternative means of payment.

That paragraph goes on to say:

Further, if your payment is still not authorised we may, at our discretion, suspend or terminate any Services we provide to you from time to time, even if payment in respect of such Services is not outstanding.

Note the words at our discretion.
It does not say the will terminate the service, does it?

Of course it is entirely possible that I am reading the wrong T&Cs.
If so, can you point us to the right ones.

PDKSite

Thanks for the information. It seems I've been relying a little too heavily on the protection of the DDI.

Those are the correct terms and conditions wealdroam thanks.

It still seems strange to me that they can set up a subscription without my knowledge or permission and there's nothing I can do about it? If they had followed their obligations, I would have been notified and avoided this situation. So because they didn't follow these, I've unwittingly accrued a debt that I have to pay?

Surely there's something in place to prevent companies from behaving this way? Or am I being naive?

wealdroam

PDKSite wrote: »

It still seems strange to me that they can set up a subscription without my knowledge or permission and there's nothing I can do about it?

But if you agreed to those terms, then they did not act without your permission.
Yes, maybe without your knowledge, but that was only because you hadn't read and fully understood the agreement you made.

PDKSite wrote: »

Surely there's something in place to prevent companies from behaving this way? Or am I being naive?

Behaving this way?
Are they doing anything beyond that agreed?

As earlier posters have said, in a business to business relationship the two parties to an agreement can agree pretty much what they like.

TonyMMM

PDKSite wrote: »

Or am I being naive?

If you are entering into hosting contracts in your name on behalf of others, and then relying on their cards to make payment then yes , you are being naive.

The contract should have been in the other company name , OR in your name ( and you pay) but with a contract in place for the company to pay you , in advance, and with appropriate cancellation terms to match those of the hosting company.