1&1 internets unfair terms and conditions

  hrushenka2000 19:50 06 Oct 2006
Locked

Following a rather bad experience from a company called 1&1 internet (click here), I would like warn everyone of the potential pitfalls hidden inside their terms and conditions.
Hidden inside the terms and conditions are clauses which allow 1&1 to automatically renew the domains/services and charge your credit card without notifying you prior to renewal, and once renewed, monies are non refundable.
This means some people find themselves locked into an unwanted contract extension, who should a reminder had been issued prior to renewal, would have cancelled.
1&1 shall renew the contract even if the card they are holding on file has expired, and will then send you a postal letter demanding you update the card details AFTER they have renewed your services.
Failure to do so will result in them instructing a debt collection agency called BFS finance to pursue you to recover the amount in question, which will then be subject to a £15 penalty in addition to the monies they say you owe.
Those who have fallen into this trap will then have to face being passed from department to department, not being able to speak to management regarding the issue because 'it is not company policy' and basically being thrown on the consumer scrapheap by 1&1 who will usually recite 'we can not help you as your account has been frozen and escalated to BFS'
The 'questionable' clauses, which should be paid particular attention to are:
4.4
”The Company agrees that for the Duration Period of this Agreement and in consideration of the payment of the Charges by the Customer it will renew the registration of domain name(s), Hosting fees, Additional services for the Renewal Period.”
1&1 Internet claim the above clause allows them to automatically renew the contract. In my case, this was done despite 1&1 Internet being aware for 6 months prior to the renewal date, the card credit details they were holding on file were invalid as the card had expired.
They claimed to have sent 1 Email at the expiration date which I did not receive. I had no further contact from 1&1 until AFTER they renewed the domains in my ignorance.
5.1
”All accounts are payable on demand. In the absence of demand, payment in full for the goods supplied shall be made by the Buyer to the Seller on or before the fourteenth day following the date of the invoice. The Seller shall also be entitled to charge such reasonable costs as it may incur in recovering any overdue balances”.
5.2
”The Company shall be entitled to issue an invoice for the Charges on the Commencement Date or as soon thereafter as is reasonably practicable. The invoice shall be entered into the Customer's administration menu and the Customer shall be responsible for checking receipt. The Company will if required provide invoices through the postal system but subject to payment of the Company's Additional Charges that are in force from time to time”.
1&1 Internet do not notify the customer prior to renewal. The first renewal notification is made in accordance with clause 5.2 when the invoice is placed into the administration menu on their (1&1s) website. As I had forgotten about the domains registered with 1&1, the first notification was when I received a letter through the post demanding the payment of £15.12p for the renewed domains made in my ignorance and threatening the instruction of a debt collection agency should I not comply.
5.15
”Customer accounts that are not settled by 20 days after due date will be passed to a debt recovery agency and will incur an administration fee of £15.00”.
The above is being used by 1&1 to intimidate customers into paying the account when the contact has been renewed (and as in my case, payment not made due to invalid card details) despite the contract being renewed in my ignorance and without notification or opportunity to cancel. Once the contract has been renewed, the renewal fee and subsequent charges levied are non refundable.
I believe the above clauses are unfair, unbalanced and biased towards the interests of the company and written to the detriment of the customer.
Further information is available at click here and click here
It is very important to read all the small print of any agreement, and the above is a perfect example of why!

  Forum Editor 21:03 06 Oct 2006

but you brought this situation on yourself didn't you?

It seems that you simply didn't read the terms and conditions of the agreement you entered into, and you can hardly cmplain when 1&1 do exactly what they said they would do.

many people - including you it seems - forget to renew their domain names, and 1&1 know this. They renew the names for you, and were you to have a particularly precious/valuable name you might very well be thanking them, instead of criticising. If they simply ignored the fact that you had done nothing about it you might have seen a busy e-commerce site just vanish from the internet, it's happened before. 1&1 protected you from this possibility, and quite understandably they wanted you to pay them for the renewal. This company always sends an automated email when a card is about to expire, so you can update your account with the new card details. You say you didn't receive this message, and of course I don't doubt you for a moment. It is extremely rare for this to happen however - the system is automated.

All in all, and although I can see that you're angry, I don't agree that you have any cause for complaint.

  spuds 22:53 06 Oct 2006

I use 1&1 for quite a number of domains, and I can honestly say that I am thankfull that 1&1 renew my domains automatically. I would most likely forget to do this, which would possibly lead me to lose the domain, which I would not be very pleased about.

Like all contracts, they have to be read before the event and not after, and I would possibly suspect that is what happened in this case.

If you think it is an unfair contract, or have been wronged, then you can seek further advice from the relevant people.

  hrushenka2000 00:25 07 Oct 2006

Thank you for your reply, but unfortunately I do not agree with your sentiment.
The automatic renewal process is fine in itself, but they do not give opportunity to cancel by not issuing a reminder. If the customer does not act upon receiveng the reminder, fine, renew the domain.
It is like your car insurance company not sending you a renewal reminder, renewing the insurance in your ignorance and then notifying you afterwards with no chance of a refund. Does this sound like fair play to you? This is exactly what 1&1 are doing.
1&1 knew my card on file was invalid, and knew so for six months. They made no attempt to contact me other than 1 email sent on the expiry date of the card, which for some reason I did not receive. All the whois data was correct and up to date. Shortly after the renewal date (of which I was completely unaware of), they sent to me, a rather tactless letter through the post demanding the payment for the domains. Why did they not do this before to notify me the card data was invalid, or even send a letter worded with a little more decorum and diplomacy? What made the situation worse was, the lack of any constructive dialogue to resolve this. I was quite happy to negotiate a settlement with them, but they are so magisterial in attitude. Their management will not speak to you on the telephone, and up to now, have not replied to any of my Emails. Any attempt of communication usually just results in the reciting of the terms and conditions to point of total monotony. It appears to me, they have established a customer complaints regime so rigid, it is incapable of making a decision based on common sense!
All they have achieved is the alienation of a customer, who, until this point was very happy with their service and would have used them again and again. However, now, due to their short sighted and short-term gain policy, have irreversibly lost a customer and I am not the only one. Eventually, they will realise that without the customer, they will not exist and they way they are treating some of their customers at the moment, they are bringing their day of reckoning ever closer.

  Forum Editor 08:12 07 Oct 2006

but the whole point is that you agreed to this system of renewal when you signed up with the company - it's not as if they've sprung anything on you with no warning.

With regard to the card details thing, try to understand that this company has thousands of customers - they don't monitor card details manually, the system is entirely automated. When a card is about to expire the system generates a warning email - if you ignore that nothing further will happen. Some companies might simply allow your domain names to expire in such circumstances, but 1&1 don't do that. They renew the names for you, and then (understandably)they expect you to reimburse them for the expense they've incurred on your behalf. You may well feel that 1&1 should issue reminders about name expiry dates, but they obviously don't. Perhaps their view is that it's your job to keep tabs on names that you've registered. I'm a reseller with Heart Internet, and I have to say that I do remind clients about name expiry dates, but then I don't have a million cients.

This entire problem seems to revolve around the fact that you say you didn't receive an email warning you about your card expiry date. The company will no doubt say that their system generated an automatic reminder, and they'll probably have a log of the fact. Whatever the situation there, it's in the past, and as you say, you've voted with your wallet and left 1&1 altogether.

  hrushenka2000 23:56 07 Oct 2006

Thank you again for your reply.
This not just a question of not receiving an Email upon the expiry of my card, it is a case of not receiving any Email prior to the renewal date of the domains. You stated that, and I quote: “You may well feel that 1&1 should issue reminders about name expiry dates”, well yes I do. In fact, it is not just a case of what I feel they should do, it is a case of what they SHOULD and are required to do. 1&1 Internet are ICANN accredited and under the terms of the accreditation agreement the domain name holders have to be sent an Email reminder prior to a domain expiring. 1&1 did not do this, and have admitted their ‘automated’ system sent only 1 Email, on the date of the card expiry 6 months before, which I did not receive. The only contact I received was after the renewal, and of course, once charged, monies are not refundable. You can find this on the ICANN ombudsman’s FAQ page here: click here
If you choose a registrar who is ICANN accredited, one would assume they would follow the rules as laid down by ICANN.
Would you not agree?
I have just received an Email from uk2.net. They are introducing an automated renewal system, here is an extract from the Email:
Find out about the UK2 Auto Renewal Process
We've just introduced a new process to make it much easier for UK2 customers to ensure continued service, if the contract on your Domain Name, Web Hosting or Dedicated Server is about to expire.

It's called Auto Renewal, and here's how it works...

For every UK2 service that you have, you'll be able to select whether or not you want it to be auto renewed when the contract ends
· Two weeks before a contract is about to expire we will send you a reminder email with all the details of the service and the amount that is due
· You can then choose a) to let it auto renew or b) to let it expire
· If you want the service to auto renew then you don't have to do anything!
· All we will do is charge the credit card that you used for your initial purchase a week before the service is due to expire
· If you want the service to expire, then simply log into your UK2 control panel, and disable the auto renew function
· It's as simple as that!
What a fair system! You are correct about voting with my wallet! Goodbye 1&1 forever…

  Forum Editor 00:35 08 Oct 2006

that ICANN requires that the person or organisation listed in the WHOIS as the administrative contact must be notified prior to the expiration of a domain name registration - and in the case of names registered via 1&1 you might find that they're listed in this capacity.

In any event, you're constantly skirting around the central point here, which is that 1&1 clearly told you that they will automatically renew names on your behalf, unless you tell them to do otherwise in advance. The mention the fact in several places on their website as well.

You've moved, so it's over, but please don't keep harping on this notification thing - you're wrong, and it's because you failed to read the terms and conditions before you signed up.

  bfoc 23:02 09 Oct 2006

An important point here that we can all do to be reminded about is it is vital to read and understand the full terms and conditions before entering a contract.

I can understand frustration at automatic renewals if you aren't expecting it, but equally I know people who were devastated when they forgot to renew a domain they had held for many years and within days found that it was now a porn site. They blamed the provider they used for NOT renewing automatically!

The lesson surely is we all need to know the basis of the contract before we sign up, and that really is our responsibility.

  hrushenka2000 01:27 10 Oct 2006

Thank you bfoc for your reply. I appreciate automatic renewals can be a good thing for many, however, when my domains were taken out with 1&1, I really can not recall seeing anything relating to automatic renewals. You are correct in what you are saying, but in reality, T&Cs are often pages and pages of legal jargon and I wonder how many people actually read every clause and assess all the potential pros and cons written within? I would imagine, in reality, very few.
My argument is not just down to the auto renewal, it is the lack of a notification reminder. As I had stated before, 1&1 are ICANN accredited and under this accreditation agreement, they are obliged to issue a reminder prior to the domain expiring. They do not do this, nor as I have recently discovered, is it their policy to do so. I would welcome 1&1s explanation regarding this and as to why they do not honour this part of their accreditation agreement, which in my case has been to my detriment.
Forum Editor, to answer your question, I am in the capacity of Administration contact and have been for the entire duration of the registration period. To answer your second question, do not assume that what is advertised today was there yesterday.
In closing, and with reference to your final statement, I shall ‘harp on’ no longer nor shall I do so again on this forum.
I shall leave the readers of my posts to make their own judgements and drawer their own conclusions and I thank all for their participation.

  ChrisWasItFree 09:17 10 Oct 2006

Dear Forum Editor,



I run an affiliated site to Bankraid.com and I note your reasonable assumption that all customers signed up to a clearly defined set of terms and conditions. In my own personal case, and that of the majority of 1&1 customers that contacted both BankRaid.com and my own site WasItFree.com for advice have no recollection of the auto renewal term, despite a thorough reading of the T&Cs. I did check for this personally, as I would have issued the cancellation for the end of the year at a similar time I took out the contract, so to avoid such autorenewals.



ICANN, the governing body, quotes the following rules that are relevant to my argument;



"3.7.4 Registrar shall not activate any Registered Name unless and until it is satisfied that it has received a reasonable assurance of payment of its registration fee. For this purpose, a charge to a credit card, general commercial terms extended to creditworthy customers, or other mechanism providing a similar level of assurance of payment shall be sufficient, provided that the obligation to pay becomes final and non-revocable by the Registered Name Holder upon activation of the registration."



"3.7.5 Registrar shall register Registered Names to Registered Name Holders only for fixed periods. At the conclusion of the registration period, failure by or on behalf of the Registered Name Holder to pay a renewal fee within the time specified in a second notice or reminder shall, in the absence of extenuating circumstances, result in cancellation of the registration. In the event that ICANN adopts a specification or policy concerning procedures for handling expiration of registrations, Registrar shall abide by that specification or policy."



"3.7.7.2 A Registered Name Holder's willful provision of inaccurate or unreliable information, its willful failure promptly to update information provided to Registrar, or its failure to respond for over fifteen calendar days to inquiries by Registrar concerning the accuracy of contact details associated with the Registered Name Holder's registration shall constitute a material breach of the Registered Name Holder-registrar contract and be a basis for cancellation of the Registered Name registration."



Automatic renewals are not fixed term contracts, they are an indefinite contract, are as a result are non-compliant with ICANN regulation 3.7.5.



At the end of the first year contract I received no email from 1&1 to inform me that the payment on the contract was due. This procedure departs from all other registrars that I have had dealings with and is not compliant with industry best-practice. I note your comment about having to inform only the administrative contact, and if this is the case then it constitutes a loophole and should be addressed by ICANN. I feel that in not providing an email notification, customers are not given opportunity to review whether or not they wish to renew.



Additionally, in my personal circumstance the credit-card that 1&1 held on file had been cancelled due to my losing it some months prior. I had not updated that information as despite a thorough reading of the T&Cs had not been aware of the auto renewal. Despite my credit card not being current, and what should have been a material breach of contract and the basis for cancellation, 1&1 opted to renew and then pursue me through a debt collection agency, whom might I add when presented with all the facts apologised to me and give personal assurance that I would not be hearing from them again. This is a contravention of ICANN regulation 3.7.4 and 3.7.7.2.



The issue of customer acceptance of T&Cs is a thorny issue, as you know 1&1 employ an electronic registration procedure. In my case, I disputed the automatic renewal procedure clause in the contract, and asked 1&1 for clarification. This is the response that I received;

  ChrisWasItFree 09:18 10 Oct 2006

"Dear Chris xxxxxx, (Cust: 7848xxx)



I would like to take this opportunity that inform you that the article relating to the auto-renewal of domains and packages has been in effect for at least the past 4 years and has been printed in our terms and conditions.

I cannot send proof by any means that you did acknowledge this particular term in our T&C?s, however, in order to proceed you would need to have checked a small tick box stating that you have read and agree to our terms and conditions, without this, your order would not have been processed.

The fact that you have an account means that your order was processed, and thus would indicate that you checked the box stating that you had accepted our T&C?s.



As BFS are the company separate to us, you would need to contact them to see which bureau they would send any credit information to.



I hope that this helps, many thanks indeed.



If there is anything else that you would like to discuss further regarding this case then please do let me know.



Regards



Sami Kubba

Complaints Department

1&1 Internet"



It seems that we can all agree that we accepted the T&Cs as in force at the time of entering into the contract, however it seems 1&1 has no proof of the content of those T&C's at any particular point in time.



I note from your emails to Chris H of BankRaid.com you seem to regard the affiliated sites as a vendetta. Please be assured we are only attempting to assist customers who feel they have been wronged. You may wish to see the member pages of WasItFree.com to get a flavour for customer difficulties in this area. In closing, we are no more a vendetta site than your own consumer watch forums.



I hope this serves to clarify our position.



Kind regards,

Chris B.

WasItFree.com

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