I had an account with 1dollarhosting.com (Webcountry) for several years to provide website hosting services. During that time, I was relatively satisfied with the service and did not have any major problems. All that changed after I cancelled my account. Approximately 10 months after cancelling my account, I received a call from a collection agency called Financial Network Recovery saying that I owe $84 for a year of service, $150 for a collection fee, and so money for interest. Note that I did not receive any communication from 1dollarhosting/Webcountry from the time I cancelled my account to the time I got the call from the collection agency. After doing some research about 1dollarhosting/Webcountry, I learned that my situation was not unique. Webcountry engages in unfair business practices and has a history of making up charges on closed accounts and sending them to collections.
Here is some history that I found about Webcountry:
1) Webcountry has a BBB rating of "F"
2) Webcountry is currently "Suspended" according to the California Secretary of State's website (http://kepler.sos.ca.gov/cbs.aspx). That
means that Webcountry's business entity's powers, rights and privileges were suspended in California. If you were to sue Webcountry, they cannot legally defend themselves. Also, any contracts that you have with a "Suspended" company like Webcountry can be voided.
If you are in a similar situation, try not to get scared and panic because that's what they want. They want you to give them some money to get them off your back. It's ok to be angry because there is an attempt being make to defraud you. Here is the basic Gameplan that I'd recommend:
Step 1: If you get a call from a collection agency, inform them that all correspondence should be done by mail. Also say that it is inconvenient for them to call at any time. I recorded their call and filed it. The collection agency must follow the FDCPA (Fair Debt Collection Practices Act) and failure to do so results in you being able to sue them for ~$1000 per infraction. Read the FDCPA here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
Step 2: You will get a letter in the mail from the collection agency.
Respond with a letter sent via certified mail saying that you dispute the debt and tell them to validate it. Basically you are telling them to prove that you owe the debt. If the letter from the collection agency was their first contact, you might also include that it is inconvenient for them to call you at any time. Here are some sample letters from creditboards: http://creditboards.com/forums/index.php?showtopic=18802
Step 3: Send a copy of your debt validation letter to the Credit Reporting Agencies (Experian, Transunion, and Equifax)
P.O. Box 740241
Atlanta, GA 30374-0241
P.O. Box 2104
Allen, TX 75013-0949
Trans Union (www.transunion.com)
P.O. Box 1000
Chester, PA 19022
Step 4: Since the debt is fabricated by Webcountry, they will not be able to validate the debt. Most likely you will be sent some old invoices which basically show they know your name, phone number, address, credit card number, website name, etc. This is NOT validation of the debt and they certainly won't be able to produce a signed agreement unless they forge your signature (easy $$$ for a violation so you should hope they do). You will need to send another letter via certified mail to the collection agency that what they provided is not validation and that you consider the matter to be disputed. They will probably
continue to send you some bs validations, but nothing that proves that you actually owe the debt. I would send them something like "Since you have failed to validate the bs debt, I consider this matter closed and expect no further attempts to collect. I also expect any reports made to the credit reporting agencies regarding this bs debt to be promptly deleted." You can also add that you'll might sue them failing to follow the FDCPA, defamation of character, mental anguish, etc., etc., but that's probably not necessary since you just go ahead and sue them if you need to.
Step 5: IF the collection agency failed to follow the FDCPA and committed violations (which you kept track of because you recorded all phone conversations and kept all mailings), consider turning the tables on the collection agency. Write them a letter detailing their violations of the FDCPA and offer them a settlement. Maybe offer them $600 per violation to settle with you. You can always take them to small claims court (up to $7500) for the violations. Even if it's only 1 violation, it is probably still worth it because I don't know many people that make $1000 per day.
If you do end up suing or being sued, here is a little more useful information regarding the "terms and conditions". They have likely changed since the time you first signed up for an account, but the collection agency will likely cite the current "terms and conditions" on 1dollarhosting.com. You can see what the "terms and conditions" used to look like by using websites like: http://wayback.archive.org/web/ You are not bound by the changed "terms and conditions" unless you have been notified (which 1dollarhosting did not do) and agreed to them. Furthermore, all "terms and conditions" can be considered void if they claim they can be changed at any time. This is supported by the following cases:
1) On April 15, 2009, a Texas federal district court held that an arbitration provision in Blockbusters online terms of service was
illusory and unenforceable because Blockbuster had reserved the right to change the terms of service at any time. Harris v. Blockbuster Inc., No. 3:09-cv-217-M (N.D. Tex. April 15, 2009).
2) I also found another case that says a company cannot change "terms of service" without notification. Douglas v. Talk America No. 06-75424 (July 18, 2007), service providers should not be able to change their terms of service arbitrarily without notifying their registered users, according to the judges in the US Court of Appeals for the Ninth Circuit.
Sorry for the long post, but Webcountry is bascially a scam company and people should not be bullied by them and their tactics.