Dreamhost screws up; screws its customers out of money

It isn’t often that we’ll write about hosting companies here at TNW. For the most part, they don’t do many things that we consider to be news-worthy, but when they do we’ll certainly let you know about it. This story, however, isn’t news-worthy in the positive sense of the term. Rather, this is more a story about how Dreamhost has messed up, and its customers are having to take the fall.

Dreamhost, for those not familiar, has stood as a cheap and easy choice for website hosting for a number of years. Though the company has had its share of problems with up time, it has generally been a solid choice. The company also plays  host to a referral program that, for some, has proven to be quite lucrative. It is that referral program, however, that is proving to be the issue at hand.

Here’s the gist: If you refer a customer to Dreamhost, you’ll get a $97 referral reward. You can then choose to give part of that reward back to whomever you referred, via a credit to their account. There is a bug in the system, though. Apparently, if you choose to give over $50 of credit to someone else, Dreamhost would still pay you the remaining $47. Clearly, yes, that’s a bug. What’s not so clear, however, is why Dreamhost would then turn to you and expect you to re-pay for their mistake:

Now, the argument of course could be that a customer might be able to scam the system by working with referred friends in order to get more money. Even with that in mind, however, the mistake was still on the part of Dreamhost and it doesn’t seem right to make someone else pay for your screw up.

Or am I wrong? If you think so, would you still feel the same if you were on the receiving end of that email? What if the charges that Dreamhost was trying to recoup were in the thousands of dollars? Let us know your thoughts. We reached out to Dreamhost for comment over the weekend, but have not gotten a reply as of yet.

A tip of the hat to John Saddington of 8bit for the story.