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There's a (legitimate) company called Cloud-at-Cost that sells virtual machines for an (extremely cheap) one-time payment. However, users are encountering multiple problems:

  1. After a year or so they suddenly tacked on a yearly fee and made users accept new terms with this fee included in order to access their VMs, even though this wasn't in the original contract.

  2. The machines are frequently down and impossible to use.

  3. The company is notoriously hard to reach and frequently closes tickets without even responding, and apparently if you initiate a chargeback for a service that was not rendered, they shut down your account altogether.

The question is, what can you legally do when dealing with such a merchant?

Given that they promised a perpetual service for a fixed cost, but don't deliver and don't respond, and that they also forced you to accept new terms (which you had to do in order to access your data), can they be held responsible legally speaking?

Note that I'm not particularly asking about lawsuits here, I'm just wondering what the legal options options are in such as situation. For example, how would you initiate a chargeback for the one-time payments when the service is indefinite and you've already "partially" been rendered the service (but now you might be reasonably worried that they'll soon stop delivering on the other parts too)? Or maybe for the yearly fee you've "accepted" and paid, considering that you had no other choice and it was against your initial contract? Or if you did sue them, which portions of the fees can you reasonably be expected to claim as the damage, and which parts would already be services rendered? How would an arbitrator decide a case based on a fixed payment and indefinite contract?

  • Can you provide a link to the original contract? – user6726 Jul 13 '17 at 19:40
  • @user6726: I think this should be it. I think the main crux of the issue is that they frequently do not respond at all. Everything else is probably covered in some disclaimer in the contract, but when they don't even respond and don't even seem to be trying to hold up their side in good faith, how much of the contract is still in force and what options do you have at that point? – Mehrdad Jul 13 '17 at 19:54
  • Without really addressing the merits, lawsuits are pretty much your go to solution when somebody otherwise blows you off. – ohwilleke Jul 13 '17 at 21:06
  • @ohwilleke: I'm surprised. Lawsuits are the only solution? Not e.g. chargebacks? – Mehrdad Jul 13 '17 at 21:25
  • Chargebacks can be a solution but there is a time limit on chargebacks that is fairly short, it only applies when payments are made by credit card, and chargebacks can be ineffective in a case like this one where some services have been provided. – ohwilleke Jul 13 '17 at 21:27
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This is a case of "Caveat emptor" (let the buyer beware) if someone offers you something that will "last forever" but don't ask for money "forever" and you can't take possession of it is very silly to think that business is "legitimate".

Legally you can probably sue them, but good luck recovering your "extremely cheap one time payment" if the company is already struggling to do business. You might be able to do a class action, but same as above and you will have lawyers take a portions of your recovery.

You might be able to get a states attorney to charge them with fraud if it rises to that level, but that seems pretty unlikely considering the issue.

  • Yeah I'm not sure this caught anyone by surprise, but I'm still wondering what recourses people have. If you expected it to happen that doesn't make it any more okay or take away any of your options, does it? You still paid for a service that you were supposed to receive, and it wasn't rendered properly... – Mehrdad Jul 13 '17 at 21:32
  • With advances of technology and business tactics it may be hard to be sure non-standard arrangements are 'too good to be true'. – user4460 Jul 14 '17 at 15:12

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