There’s a fine line between humor and condescension; more than a few customers felt that hosting provider Dreamhost crossed that line today.
The company overbilled nearly every customer, by a total $7.5 million dollars. The mea culpa came in the form of a blog post that featured Homer Simpson and featured such quips as “The joke is on you!” along with an apology and explanation. Basically, their billing system added a year’s worth of extra hosting charges to every single account (meaning, by the way, that Dreamhost is doing around $7.5 million in annual revenue). Many accounts were also shut down due to non-payment.
The apology was clearly heart-felt and genuine, but emails to us along with many of the 250 comments to the blog post suggest that a more straightforward apology may have been in order. Examples:
it is time you realized when the light jokey style in which you run this business is NOT the appropriate tone. Any of us involved in running a business knows when you approach your customers with a serious tone. Your customers are taking that tone with you; Time to step up and be serious and act like your company depends on it. I think it does.
Thanks for the jokes. I’m out of here.
Please, show some genuine concern for your customers. Sure, you screwed up, but I don’t see any sort of genuine concern other than the $7,500,000 in credit card debt you accidentally set off.
Jokes are NOT APPROPRIATE in this situation….Do you realize that for some credit cards, you have just pushed them over their max, meaning some people will pay fees, overage charges, higher rates PERMANENTLY, and their credit scores could be affected? Will you be reimbursing those charges?
Coincidentally, in Dreamhost’s last monthly newsletter they talked about their new offices and joked “If your next web hosting bill from us is mysteriously tripled, now you know why.”
Indeed.





I’m a dreamhost customer - I wont say I expect things to go wrong, but they aren’t exactly Rackspace, and their pricing reflects that.
At least they left a detailed explanation of what wrong instead of some suit sounding dribble.
I have never had any problems with them previous to this.
I initially signed up with Dreamhost back in 1998. For whatever reason, at some point between now and then I decided to switch to a different host. I just have to say that was the worst time of my website’s life. The site, along with email was constantly down. Customer support was nonexistant and the whole operation was sketchy at best. After a year of host hopping, I came back to Dreamhost and have stayed loyal ever since. Sure there are problems here and there. It happens. But if you honestly think that switching to another host will eliminate all possibilty of there being downtime or problems you’re kidding yourself. This is kind of an inconvenience. Now if they accidentally erased everyone’s sites and accounts. Maybe that’s cause to riot.
Dreamhost has a very, very poor uptime ratio. Such as, 70% uptime. Which translates to, 30% downtime. For normal sites. Over the course of weeks.
Google: dreamhost sucks
all you DH lovers out there WAKE THE FUCK UP
sure they are down all the time
sure, they have no phone number
sure CS is horrendous
sure they take 2-3 days to answer support tickets….
but we love the way they are easy going.
Are you serious?
they are easy going cause they don’t really give a shit about you or your website. Things like this DO NOT happen to all companies.
“well, at least they admitted it”….
they HAD to admit it HELLO, it was all over everyones billing statements.
what have they done since then?
NOTHING……….no announcment …..NOTHING
I’m sick of hearing your pathetic BS about “give them a break”.
FUCK DH and everyone that works there
> Dreamhost deserves a break. They offer full-featured web hosting for dirt
> cheap. Their response actually made me smile. They did everything right.
Seconded. I’m happy with the service Dreamhost have provided me over the last nine years.
I can’t shake the feeling that most of the NERD RAGE against them in this thread comes from people who, upon making a serious mistake at work, immediately look around for a scapegoat.
Mistakes happen, this one was correctible and corrected; that’s not unnaceptable for any business.
ya, “peter” and when they take the dick outta your ass you can forgive them cause they “mistakenly” thought you were a bitch
if you google: dreamhost sucks
go ahead, go do it.
you will see that “mistakes” as you call them are a way of life for DH. At some point it becomes titled “negligence”, “stupitity”, “poor managment”…and people like you…..look like paid “damage control”
Here’s the serious post for those who need it:
http://blog.dreamhost.com/2008.....aftermath/
Looks like all charges are refunded, and they will refund all fees from your bank (if any) as well, plus give you credits on your account. And if you want to drop your contract they’ll refund the remainder even if they’re not obligated to.
DreamHost has mediocre system performance and lots of outages of various things, but one thing you can say in their favor is that they’re completely transparent and on top of things. I just wish they didn’t have so many problems in the first place, because then they’d actually be a perfect hosting company.
This error and the amount charged is not a good judge of annual revenue. Keep in mind that *only* credit card customers that had automated rebilling enabled were affected. This does not include the numerous Google Checkout, PayPal or check/money order customers, or those that have automated rebilling disabled.
Their hosting is what is a joke! I had more downtime in the 3 months I was with them than with ALL of the other hosting companies I have used combined. Their tech support staff are over the top easy going, it really makes you wonder if they take their clients or business serious at all. In response to my dozens of downtime complaints, they were always so nonchalant about it, giving me responses like “Todays downtime was bad timing”
I quickly realized the whole thing is a joke to them and I switched to another server as fast as I could. Several months after switching, I receive this email saying I’m past due on a payment of $120 for an account that I never renewed and that I owed another $120 on top of that. I promptly told them to kiss my ass.
They should refund every penny I paid them and shut their company down for good, they have no business selling webhosting.
I’m actually going to join because of this. In your face, anal folks.
I joined because of this. Good for dreamhost.
As another comment said - I would much rather a lighthearted apology with a detailed account of what went wrong than a serious apology with little explanation.
Here is what he said in the post, which you idiots seem to have missed:
“The end to this story is that of course, I’m very very sorry, we’re very very sorry, and I’m sure you’re very very sorry this happened. I really am. I understand the sort of problems that an unexpected large charge to your credit card (or worse yet, your debit card) can cause. If the tone of this blog post seemed a little light, I apologize I don’t mean to offend and I realize how serious an issue this is. I’ve been up since 3:50am trying to undo the damage and maybe I’m a little shell-shocked.”
What the hell more can they say???? I am sure you prefer hosts that give you a “serious apology” saying jack about what happened, but I absolutely *love* Dreamhost and will stick with them come what may.
And most people here seem to be rival hosting companies.
What sort of jerks are you? Go find a way to get better instead of this. Every Dreamhost customer has tried your service and we now have found bliss. Your false information won’t work.
hey Aaron……no one is posting false information except you!!!
because you are obviously attempting “damage control”.
prey tell me how false the information these 86,000 plus people posted is.
http://www.google.com/search?s.....host+sucks
Nuff said…..idiot
Im a loyal customer, and will stay one. As mentioned, you run the risk with autobilling, and you agreed to their TOS, which you should read if youre disgruntled, and these things happen. Fix it and keep going. You probably saved more money using Dreamhost instead of overpaying another hosting provider, than you could possibly lost over this situation. Not to mention the money Dreamhost helps generate for thousands. As a loyal customer i say dust yourself off and keep with their great hosting service.
This is my take on the Dreamhost 7.5 Million Dollar Whoops!
http://www.juliesjournal.com/2.....ar-whoops/
I was one of the first to notice this when it arrived in my inbox. And replied in 2 minutes in a panic thinking I’d done something wrong.
I won’t be changing hosts! I won’t stop recommending them. I’ve got zero complaints about there service, for the price they are hard to beat. I like their humor.
I think those that want to make a fuss about this or go all funny about the way they responded should leave. It’s not the host for you. I can recommend Comcast for all the whingers! That will teach ya. Rack off from Dreamhost and leave our guys alone.
Best thing in the world that could happen is for the bitchers to leave and for those who can’t manage to request support on email and need to use the phone to go with them. Good riddance! Your type is a pain to deal with and I doubt you will be missed NOT much. You can’t know too much about what you’re doing if you need to ring the host and we are the ones paying for your stupidity. Fantastic!
A Dreamhost who is friendly with nice friendly customers who don’t need to phone up and create unnecessary expense for the rest of us.
They should break the billing system once a year and get rid of the complainers in a bulk lot.
Hello,
As a previous employee of DreamHost and shift manager of their Graveyard Team I can advise you that billing errors within the company are nothing out of the ordinary, suffice to say I was not very shocked when I read there was a 7.5 million dollar billing error. The DreamHost billing system is far from “robust and stable” as Josh Jones proclaimed on the companies web blog, the only thing that could be counted on is the constant issues that have plagued DreamHost for the past few years. Billing issues are quite common with their company and the “fat fingers” he refers to having have led to countless mishaps causing customers downtime and other costly consequences.
As a matter of fact, I am actually the head of a class action lawsuit “Gerasimatos vs New Dream Network” in regards to DreamHost not abiding by the California Department of Labor regulations for paying employees overtime for working greater than 8 hours daily, and also for illegally deducting vested wages for sick and vacation time. I became a whistle blower on DreamHost and shortly after the DLSE contacted the DreamHost owners I was terminated for “doing the right thing”.
Here is the exact letter the DLSE representative sent DreamHost prior to my termination for engaging in protected activities with the DLSE. The law firms participating in the Class Action suit are as follows.
http://www.coviello-law.com/ and http://www.duvel-law.com/
Thank you,
Nicholas Gerasimatos
Dallas Kashuba and Josh Jones:
I am a retired Senior Deputy Labor Commissioner who was asked to return to assist in answering queries that come to the Division of Labor Standards Enforcement from the public concerning California Labor Law. One recent query had to do with alleged practices of your business. I do not know if the query originated from an ex-employee, current employee or friend of somebody who knows your business practice(s). This response is informational in hopes that your business practices do not generate future wage claims and additional liability for your business.
It is alleged that you offer both sick leave and vacation leave as benefits of employment. It is also alleged that in the case where an employee takes sick leave and does not have enough sick leave time accrued, that you deduct double the excess number of hours from that employee’s vacation leave bank. The example give was that if an employee had two hours of sick leave on the books and took a day off “sick” (a total of 8 hours) then you would deduct the two hours from the available sick leave and 12 hours vacation (double the 6 hours necessary to cover the absence). If this is a factual representation of your policies, you are incurring a great deal of liability.
Labor Code § 227.3 protects vacation hours as vested wages. The California Supreme Court in the case of Suastez v. Plastic Dress-Up (1982) [31 Cal.3d 774, 647 P.2d 122, 183 Cal.Rptr. 846] unanimously ruled that under the provisions of Labor Code § 227.3, vacations are earned day by day and any unused vacation must be paid on a pro-rata basis to the employee at the time of termination. The California Supreme Court concluded as follows:
“The right to a paid vacation, when offered in an employer’s policy or contract of employment, constitutes deferred wages for services rendered. Case law from this State and others, as well as principles of equity and justice, compel the conclusion that a proportionate right to a paid vacation vests as the labor is rendered. Once vested, “the right is protected from forfeiture by § 227.3 on termination of employment, therefore, the statute requires that an employee be paid in wages for a pro-rata share of his vacation pay.”
Vacation wages, being vested as earned, cannot be taken from the employee; they must be paid. Therefore (back to the example) taking an additional 6 hours of vacation hours from the employee’s leave bank is a failure to pay for the hours that were vested. This is cumulative and affects every current and prior employee that has had excess vacation hours deducted from their leave bank. A particular quirk of the protection is that there is no violation of the statute until such time as the employment agreement is severed (termination or quit); when payment of final wages becomes due. If the illegally deducted vacation hours are not paid at the final wage rate in accordance to the applicable statue (either Labor Code §§ 201 or 202), the employee has the basis to file a wage claim against you for not only the vacation hours owed, but for penalty wages under Labor Code § 203 (for up to an additional 30 days of wages at their final wage rate).
I have advised the party that queried the Division of unlawfulness of the deduction and suggested that they have the basis of a wage claim if they were an employee of your business and had the hours deducted or would have such a claim if they were a current employee and such wages were not paid when the employment relationship ends.
Please note that business that combine sick leave and vacation leave into some form of “paid time off” or “PTO” such hours would be entitled to the same protection as vacation wages under Labor Code § 227.3. Certainly you do not owe wages to employees for work not performed; you are within your right to deduct (hour for hour) any absence from the wages owed that were not worked (time off without pay). You could deduct (hour for hour) from the vacation hours (so long as the employee is paid for these hours on their regular pay check). I would strongly suggest that such hours are reflected on the wage earning statement as something other than regular wages (either sick leave or vacation hours, as is applicable). The only issue with your policy would be any deduction of vacation hours that were not paid.
You may access the Labor Code from the left side of our web site at http://www.dir.ca.gov
The foregoing has been provided for informational purposes only and does not constitute legal advice. Information contained here may not be relied upon or used as an official opinion of the Division of Labor Standards Enforcement ( DLSE ) in any forum. Access to, transmission or receipt of, or reliance upon this information from the DLSE does not create, and is not intended to create, an attorney/client relationship between you or any other person and the DLSE or between you or any other person.
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I haven’t had a problem with downtimes or overbilling, Dreamhost are usually quick to fix their mistakes. However, if they’ve been violating labor laws I take a very dim view of that, and I hope other loyal DH customers will as well.
Mistakes I can forgive but being a prick to staff I take a very dim view on.
By question would be, are they making a significant profit and being arseholes or are they backed against the wall and trying to survive?
I’m really very very disappointed to hear this. I always pay people that work for me at least X2 what jo the arsehole does. Minimum rates at there to be exceeded NOT lessened even further.
Seriously I consider that to be X1000 worse than having an issue no matter how well it might be handled. I hope they have woken up since then. American wages and conditions are shit to start with.
Significant profit is and understatement for the amount they make. If you’d like details, please look for the amount of money they claim in taxes and multiply it by 10. Josh is just a poster child for the company, and the real owner is a cocky and arrogant douche who drives a Porsche and is on vacation 9 months out of the year.
I don’t get the “forgive and forget” attitude either.
Yes, mistakes happen. And when they do, transparency is better than stonewalling. For example, I’ve managed employees before, and I always prefer the ones that can admit they did wrong (preferably before I find out from someone else). However, someone who makes a lot of mistakes and easily owns up is not preferable to someone who hardly ever makes a mistake and has a hard time admitting it.
Dreamhost is a value-priced host, so I’m prepared to offer them some slack (can’t expect 99.99% uptime), but the repetition of critical downtime and billing/setup errors caused by insufficiently tested scripts on DHs part is getting inexcusable.
After every incident they have a series of posts like these - usually in this order: 1) Minor issue, nothing to worry about; 2) Big issue, but it’s all fixed; 3) OK, for some people it’s still ongoing; 4) The aftermath, why we were wrong all along, tee-hee!
That’s fine if it’s once every couple of years, but by now it’s clear that DHs technical employeed simply aren’t qualified to run a 500,000+ domain web host. They need to get some serious, outside, senior technical help (along with some management savvy) or there just another poorly tested script away from a complete and total data loss.
While I think it’s annoying when one tries to be too casual in business expressly for the point of being cool, I don’t find that to be unprofessional.
You’re forgetting that all their affected customers are on shared hosting. How serious of a business are you going to put on shared hosting? I hope not much, because we get what we pay for, even if it ends up erroneously being what we paid for twice.
Well apparently they’re still at it - I discovered today that they were billing my credit card for an account I NEVER signed up for. (I’ve been using 1and1 for years}. I dont know how they got my credit card info.
I filed a complaint with the CA atty Gen office. This fraudulent operation needs to be shut down. Nothing funny abt this at all.