DreamHost Accidently Bills Customers $7,500,000

As you have probably seen by now – since it appears the story is all over the internet right now – DreamHost accidently billed customers for totally over 7.5 million dollars last nigh.

The error was first reported on the status blog and later an explanation was posted on the official blog.

The billing glitch happened when Josh was manually running the billing script for the last two weeks. Instead of inputting the billing date as 2007-12-31, he ran the script for 2008-12-31! This implied that any account which was going to be billed in 2008 was billed instantly and for at least one year of charges – and up to several thousand dollars! A total of more than $7,500,000.

DreamHost started to try to fix the error and refund all erroneously charged accounts as soon as they discovered it, but the error had already caused severe problems. People had their hosting accounts automatically disabled because of non-payments, bank accounts and credit cards were overdrafted (with overdraft fees as a consequence) and some even missed their mortgage payments because of this error.

Of course all this caused an outrage: More than 5,000 support messages, 1000+ comments on the status blog and currently 200+ comments on the official blog.

DreamHost has posted a long explanation on their blog: Uh, Whoops. If you’re not up for Josh’s usually funny style, the most important piece is here:

A new service is running right now (in parallel on all the controllers) that fixes all those future charges, re-enables your account if it was erroneously suspended, and if your credit card was automatically rebilled, refunds the payment automatically. You don’t have to contact us or your bank, and you’ll get an email when your account is finished fixing up. It’s going to take several more hours to complete. There are (or were, after this incident) a lot of you these days!

If, because of this billing mistake, you somehow incurred some fees from your bank or credit card company, please let us know after tomorrow (today we are just replying to all 10,000+ billing messages with a generic explanation) and we’ll do our best to make it right for you.

The story has already hit Digg’s front page, Blaugh made a fool out of DreamHost and Lunarpages took the opportunity to get revenge over DreamHost.

6 Responses to “DreamHost Accidently Bills Customers $7,500,000”

  1. John says:

    Absolutely the worst host ever?

  2. Kestas says:

    Didn’t affect me or my site, so it’s not site wide, but yeah that’s a pretty bad mistake. I wouldn’t want to be Josh right now

  3. Linked from: DreamHost 大乌龙事件及众生相
  4. Linked from: Worst Typing Error in History?
  5. Tim Linden says:

    Well my thoughts on this whole thing.. You really should have a separate credit card for your online purchases. Fraud alone should be a factor, but errors like this can happen too. If you start passing around your main bank account information (debit card) online it really is asking for trouble.

    (I actually wasn’t affected by this because I used Google Checkout when signing up, but I also used my business credit card to pay for it)

  6. Linked from: DreamHost Overcharges Thousands of Customers - Blog Tipz