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  • From: Barry Shein
  • Date: Thu May 29 12:36:24 2008

On May 29, 2008 at 09:07 [email protected] (Al Iverson) wrote:
 > On Wed, May 28, 2008 at 11:08 PM, Barry Shein <[email protected]> wrote:
 > > I am a big, big fan of assessing charges for AUP abuse and making some
 > > realistic attempt to try to make sure it's collectible, and otherwise
 > > make some attempt to know who you're doing business with.
 > Just out of curiosity, what stats can you make available as far as:
 > - How often you assess this AUP abuse fee?
 > - How often it is successfully collected?
 > - How successful are chargebacks against that fee?

I'll just say we have certainly assessed AUP abuse fees and in most
cases collected those fees.

The most common fee is a $50 per incident charge for spam complaints
after a stern warning or two which depends on frequency, a few per day
is very different than one or two per month, and what to do with those
phony AOL TOS complaints which almost always mean "I asked to be on
this list but I forgot how to get off so maybe if I keep clicking the
spam button..."?

These are not generally for all-out spamming in our experience. I
don't think that's even happened from here in this century. But I've
had people who sold services and harvested addresses from, e.g.,
usenet groups or mailing lists they joined specific to those services
(kinda like the router salesman you sometimes hear about on nanog)
which generated complaints. They got a lecture and a warning. In a few
cases their persistance got them billed, as warned, which usually put
a stop to it.

One time very early on I remember someone did some more egregious
spamming and I shut him down and added a $1500 clean-up fee and he
paid it. I was a bit shocked. I've billed a few others like that and
of course they just disappeared.

One advantage of AUP abuse fees, from a business point of view, is
that if you've done your homework (in the AUP, customer clearly warned
on first offense, response received) you can then shut them down
pending a significant deposit or payment of abuse fees on your terms.
You can, e.g., say this is too much for a credit card if you doubt
their trustworthiness, credit cards aren't legal tender, and demand
some more trustworthy payment method.

Let's be frank, once you're pretty sure they're willful spammers
you're not losing a lot of sleep over keeping them happy, you're
mostly trying to get rid of them unless this is really something
they're willing to give up entirely.

Should they try to come back at you legally this is a lot more
understandable ("I never extended them a credit relationship of $1500
on a $20/mo account!") than just "we didn't like what they were doing
with their account". Anyone can understand non-payment, even a court,
so claims of "business damages" etc mostly go out the window ("but if
it was so important to your business why didn't you just pay the
fees??? it was in their AUP, didn't you read it?")

Obviously the fees have to be steep enough to discourage even someone
who might otherwise be willing to pay the fees. And for the way
spammers work that doesn't have to be very high, they mostly shoot for
"free" as an overhead goal, even the semi-legitimate types who would
claim they're just doing direct email marketing and sell products a
little more credible than herbal body enlargement pills.

At any rate I'll admit all this begs the zombie bot spammers and
others whose businesses are entirely built on crime and fraud but we
were talking about computing clouds.

As to chargebacks, over almost 20 years we've punched millions of card
charges and I'd say the number of chargebacks is small enough that it
usually gets mentioned when it happens, "hmm, we had a couple of
chargebacks this month", very few, certainly not one a month.

We have what I'd call a normal number of "card invalid" (closed, over
limit, expiration date wrong, etc.), you get a steady stream of those,
but nothing I'd call serious and in most cases gets straightened out
with the customer...before someone (as usually happens in these
discussions) re-defines those as "chargebacks" and uses the
redefinition to question my credibility/sanity. By chargebacks I mean
a disputed charge, they're clearly distinguished in your merchant acct
from just "bad" cards.

        -Barry Shein

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