EU 14 day cooling off period vs. Hosting Services
A client recently pulled out the EU Law card, for a full refund, citing the mighty EU law for a VPS service which they customized to their liking and used for 7 days already.
https://europa.eu/youreurope/citizens/consumers/shopping/guarantees-returns/index_en.htm
Did you know that while EU law grants a 14-day cooling off period for online purchases, there are exceptions to this rule?
This cooling off period doesn't apply to goods or services that are made to order or clearly personalized.
The law exempts tailor-made services—just like the one-of-a-kind suit you can't return once it's crafted to your exact measurements.
Here is our conversation -
Client -
I would like to proceed with ordering vps as we talked about. But i would like this :
600mbit unmetered
2 cores
2gb ram
20gb disk$40 per month
600mbit, so i can use the vps as vpn for my own pc and phone aswell.
Traffic wont be hitting 600/600 at all times. It is just a good to have, and peace of mind thing.If all good, go ahead with this. Thank you.
Me -
I've added Invoice #1428 to account , kindly confirm once paid.
Client -
Hello sir. Are you still here?
Me -
Please advise how you'd like to proceed.
Client -
Since you are running a rather small business, i would like to have a invoice showing the specs agreed upon. Please delete the current invoice, and state all specs on a new one instead.
2 cores
2gb ram
20gb disk
600mbit unmetered connection with no limitsOnce this is done, please go ahead and provision the vm. I will pay the invoice asap.
Me -
Invoice sent.
Client -
I tried to reach you via live chat.
Me -
I've set the invoice as per your request.
Paid & activated, client uses the service for next 7 days.
Client -
Hello sir. Just one question for you :
Are you DMCA ignore?
Me -
If we receive any report we will forward it to you.
Client -
Can we lower the price if i want 400mbit unmetered instead?
Me -
I understand that pricing is an important consideration, and we appreciate your interest in exploring different options. However, I believe that the current plan you have, with a 600Mbit unmetered connection, offers the best value.
With the 600Mbit plan, you have a higher bandwidth capacity, allowing for multiple connections.
400Mbit will cost you around $35 with the same vps specifications.
Client -
In that case, i would like to cancel at the end of this billing period.
Client -
Since there has been less than 14 days, i would like to use my right for refund for my server on IP x.x.x.x
Reason being it is from time to time getting some packet loss, and i got a better deal for cheaper, thats why i asked about the pricing. Feel free to take it down any time and perform the refund. If you want, you can paypal me $30 (or send litecoin for $30 instead of refunding $40 back to my card.
paypal : ...
LiteCoin : ...
Me - Issues a prorated refund of $30.
Refund has been issued
Please allow 3-5 business days for the refund to appear on your original payment source & feel free to
let us know if there's anything else we can help you with
Client -
By eu law i have the Right for a FULL refund within 14 days for any online service or items. Please issue the rest of the money.
Me -
We understand that you believe EU law grants you the right to a full refund within 14 days for any online service or items. However, we would like to clarify the applicability of the law in your specific case.
As per EU law, the 14-day cooling off period does indeed provide consumers with the right to request a refund for certain online purchases. However, there are exemptions to this rule, and one of those exemptions includes goods or services that are made to order or clearly personalized, such as our customized plan.
In your situation, the plan we provided was tailored specifically to your requirements and preferences, making it a personalized service. Therefore, the standard 14-day cooling off period does not apply in this instance.
However, we value your satisfaction as a client, and we strive to maintain a positive business relationship with you. Considering this, we issued a prorated refund based on the number of days you had utilized the customized plan. This refund amount accurately reflects the portion of the service that you did not use.
Please refer https://europa.eu/youreurope/citizens/consumers/shopping/guarantees-returns/index_en.htm
Client -
It is not like you cannot resell those resources. Give full refund, or i will take this furter.
In the spirit of fairness, we issued a prorated refund, deducting only for the days the customized service was used. A fair compromise, don't you think?
What's your take on applying this to Hosting services ?
Are you a firm believer in the right to a full refund within 14 days?
Maybe you have a unique perspective to share!
Cheers! 
Comments
"Have your lawyer call my lawyer - they'll do lunch. By the by, I've revoked your pro-rated refund to cover legal expenses."
I wish.
That would piss them off,
https://webhorizon.net
Not perfect, but I'd say it falls under:
But yeah that customer was always gonna be a problem...you can tell from the conversation right from the start. Hard to tell exactly what but something was off
You can add a checkbox, which basically says "I expressly agree that the execution of the contract will begin before the cancellation period has expired. I am aware that I will lose my right of withdrawal from the beginning of the execution of the contract."
Some providers are using that, apparently legal.
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Ah, some people ...
"Bring it on!"
Are you even incorporated in the EU?
So what you are saying is I can book a hotel online in EU, arrive the next day, checkout after staying 10 days, and I can quote the law you stipulated above so as to not pay the hotel ? /j
I am not familiar with EU law but my opinion would be that the tailor-made services exemption would not apply for hosting services in the same way that it would apply to goods like a suit, or a service like catering.
That said I also can not see how the law could reasonably be enforced after the buyer had used the service for 7 days. I think that your decision to offer a prorated refund was the fair and reasonable thing to do.
The client requesting $30 via PayPal or crypto raised some red flags for me so I might expect something else is going on here.
EDIT: spelling
Same! When they said
https://webhorizon.net
yeah, in the UK
https://webhorizon.net
Cuntstomer.
"The imitator dooms himself to hopeless mediocrity." — Ralph Waldo Emerson
i am not an expert in law. This guy is a dick. I hope he is not a LES member.
just close his account and add blacklist him.
EU is a sinking ship!
This is insulting.
The client is an arrogant asshole.
Just leave him into the void and don't waste any of your resorces and energy on him, any more.
PS: He can shove those EU grandma tales up his ass.
You already went above and beyond and refunded him.
I thought you said you were incorporated in the EU. ;-)
I believe the tailor-made goods exemption only applies to goods, not to services.
However, for service contracts, Article 14(3): "Where a consumer exercises the right of withdrawal after having made a request in accordance with Article 7(3) or Article 8(8), the consumer shall pay to the trader an amount which is in proportion to what has been provided until the time the consumer has informed the trader of the exercise of the right of withdrawal, in comparison with the full coverage of the contract. The proportionate amount to be paid by the consumer to the trader shall be calculated on the basis of the total price agreed in the contract."
Guidance from 2021/C 525/01: "For example, a consumer who withdraws from a contract for mobile telephone services after using the service for 10 days would have to pay the trader one third of the monthly subscription plus the price of any additional services received during that period."
I am not a lawyer and this is not legal advice.
Bbb..but, UK isn't part of the EU anymore :P
this customer is just a whiny little bitch so dont worry about it.
I bench YABS 24/7/365 unless it's a leap year.
No, you can not. The law applies to goods, not services.
If I check in, use the hotel room and then try to cancel, you as a provider can not resell the time I spent in that room to recoup the costs.
The idea behind the law is that if the seller can resell the goods as unused and not lose money, then you have the right to a refund.
Thank you for the clarification.
I was joking [/j] because that was what the client in the OP was expecting to do.
I buy a non-customized shirt from EU website, do 100 push-ups wearing it, and then return the sweaty shirt.
This doesn't seem to fall in an exception.
PS. in USA such returns are allowable by most brands, but each customer can only return four sweaty shirts per year.
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if the goods are used (and smelly) the refund price will be reduced.
Except Amazon which kind of accepts all returns within 14 days. At least I have always received the full price back.
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Sweaty shirts can be sold for higher price than new shirts, because fetish.
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But, you just increased the shirt value.
Some people enjoy other people sweaty undergarment.
Look over my video archives and pick any item you want.
$69/each excluding shipping.
I'll make sure it's hot and sweaty.
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You're offering the wrong person.
@ehab is the right prospect for this.
"The imitator dooms himself to hopeless mediocrity." — Ralph Waldo Emerson
@Abdullah just deadpool that will teach them
The Yeti has left the building.
@Abdullah
Take a look at the TOS of Contabo:
https://contabo.com/de/legal/right-of-withdrawal/
As @Neoon said: You need to have a checkbox which explicitly states that they must agree that the 14-day right of withdrawal expires as soon as the server has been provisioned - and else not let them sign the contract.
Just check with Netcup or Contabo to see how they do it.
I'll give @ehab a discount: sweaty shirt + pants + undies + socks for $189/set, a $276 value.
Simply bid $189 or more on my next domain auction, and send me a UPS shipping label.
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In my opinion you should let this one go. For you it'd only be a difference of 10 euros (30 vs 40 euros). Use it as a learning experience and incorporate the changes proposed in this thread to prevent it from being an issue again in the future.
Would save you a lot of headache, and the advise gotten in this thread as a result of it is already worth more than what a lawyer would give you for 10 euros.
Then again, that client is/was a dick.
Hey teamacc. You're a dick. (c) Jon Biloh, 2020.
I sell online services similar to web-hosting,
here's what my lawyer has crafted clause on our TOS:
EU & UK CONSUMERS: YOU HAVE A STATUTORY RIGHT TO CANCEL PRODUCTS AND SERVICES WITHIN 14 DAYS FROM THE DATE OF THE CONTRACT. HOWEVER, WE ARE ENTITLED TO CHARGE A REASONABLE AMOUNT FOR THE SERVICES THAT WE HAVE ALREADY PROVIDED TO YOU AS AT THE DATE OF CANCELLATION. THEREFORE, A FULL, OR ANY, REFUND MAY NOT BE DUE. PLEASE NOTE THIS DOES NOT AFFECT THE "PRODUCTS WITH SPECIAL REFUND TERMS", WHERE FULL REFUNDS MAY BE GIVEN, AS APPLICABLE. THIS REFUND POLICY DOES NOT AFFECT YOUR STATUTORY RIGHTS.
Generally, I deduct reasonable amount for the services we already performed within first 14 days. This includes any provision charges, man-hours invested, or percentage of work completed. Rest amount I refund them.
Now in OP's case if a customer uses a $5 VPS for 14 days OP can charge a reasonable amount for services like bandwidth utilized, server provisioned, etc.
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Lucky you do not have a nuisance fee cause in that case, he may need to pay extra on top of what he already paid
My country is not in the EU, but we also have that law for "online purchases."
How it works in practice:
I buy a HDD in a brick-and-mortar store and it makes clicking sounds.
Technically, it has no bad sectors, it reads and writes normally.
The warranty-claim service guy knows it's going to go bad. I know it's going to go bad. But it is technically OK (for now).
I'm fucked.
I order a HDD online.
I don't like it, for whatever reason (or no reason at all). I can ship it back and get a full refund on my account (I only pay for the shipping).
The same goes for buying monitors. Many manufacturers claim that one dead pixel (even if it's in the middle of the screen) is considered good by them and will not honor a warranty. If I order a monitor online, I can still get my money back.
I've never ever bothered abusing that system. It's a hassle (having to pack and ship stuff back to the manufacturer, fill out the paper forms etc.). However, anything that costs more than a few dollars, I buy online nowadays. Because otherwise, refunds in case of faulty goods can take over 30 days and are not always guaranteed.
As a seller, I'm happy to give full refunds, and if the warranty claims are not reasonable, I cross that customer of the list of people I'm willing to work with. Of course, in EU, one is not allowed to store customer data even for such a blacklist (as emails and cards can be changed). That sucks.
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Honestly, there are times when you can sense problems incoming right from the beginning when interacting with a client.
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I get a few of these. They only have the right to be refunded for the part they didn't use. As long as you prove they used it for 7 days and there was a cost to you during that 7 days, the customer needs to pay for those 7 days. Many get confused because others will fully refund, that is their choice to do that, it's not required.
Indeed, but we kept all the rules/regulations/laws. So we largely still act as if we are still part of the EU. That will change over time but Governments and speed...
we say spring is noticed from far away.
guess you have your share of crappy clients.
The EU law is similar to that of Brazil, with a specific focus on intermediate consumers. In the EU, it is permissible to reject refund requests for intangible services meant for public use or services that generate profit for the intermediate client.
https://purplehost.com.br - Reliable, secure and affordable game hosting.
LET?
https://lowendtalk.com/discussion/comment/3665140/#Comment_3665140
I don't think that's the correct exemption. If I were you I'd just get proper legal advice ... get a group together and pay for it and share it, simple. Anyway let's have a look at the actual EU directive which forms the basis for the legal texts:
https://eur-lex.europa.eu/eli/dir/2011/83/2022-05-28
Chapter III is what to look at.
Okay so Article 6 is highly relevant here. Many online companies do not properly provide all the information they are required to. It's a shall not a may. So they must fully identify themselves which means ensuring they have their full trading name, legal name, business number/s, address, phone number and contact email address all clearly displayed on the website. Missing any of that information may mean you've not met your business obligations for selling to EU customers, and they they may be entitled to a full refund for that reason alone. There are further things that shall be disclosed by a vendor prior to sale, I encourage you to read it as many more bits are relevant. Disclosing the complaints handling process is also required as an example.
Self-explanatory.
In short, on my reading of a vendor must have it in writing that the consumer has agreed to forego their 14-day cooling off period, if you don't have that you are probably obligated to refund the consumer.
Now the exemptions, this is what you're relying on:
Exemption (a) would likely apply in my reading of it, but only if you have it in writing with the consumer's prior express consent.
You could potentially rely on this clause as you appear to be doing so.
This is the clause I think is most likely to apply to VPS and other hosting products, although if you make a custom product then as mentioned you could potentially rely on (c) instead of (m). However if you want to protect yourself in the future from someone lawfully claiming their 14 day cooling off period buying an off-the-shelf hosting product then you'll need to (a.) get proper legal advice not just rely on your own reading or my reading of the directive and then (b.) ensure that you meet ALL of your obligations under the directive.