Yesterday, while I was checking my inbox I was surprised when I got an email from Dreamhost saying that they’ve already billed me for the next cycle. As far as I know my next bill wasn’t due until like 3 months from now and I also noticed in the email I received that the date was wrong – today’s date: 2008-12-31, so I knew it was an error. I immediately sent an email to Dreamhost’s billing department telling them about the error.

A few hours later, I received an email from them admitting that there was an error and that they’re fixing the problem and that I will be refunded as soon as possible. It turns out, they were having billing issues and I wasn’t the only one who was “mistakenly” billed but nearly everyone who had an account in Dreamhost. Guess how much the total billing cost? $7,5000,000!

Here’s their official announcement/statement regarding the issue posted at Dreamhost Status:

We are currently aware of some billing inaccuracies which we will be resolving later today. All of these issues will be resolved, and any billing errors corrected. We sincerely apologize for any hassle this has created.

Scripts are still running to correct the original problem. Last night, this guy ran a standard billing cycle to clean up stragglers from 2007. Unfortunately, the biller was run for 2008 (December 31st, 2008 to be exact). This caused everyone to be billed as if today was 2008-12-31, wreaking the havoc that we are so sorry you had to be put through.

We’re going through and fixing everything right now, but it may take several hours before all affected accounts are corrected. You will receive an email when yours is fixed, and if your credit card was charged, the charge will be refunded automatically.

We’re very very very sorry about this! There is a blog.dreamhost.com post explaining in more detail how this happened..

Also, you needn’t contact us or your credit card company/bank about this.. we’re fixing it right as you read this (and maybe already have for your account)! The best move for you is to just sit back and pretend you never got those weird billing email(s) talking about owing lots of money!

This post will be marked as resolved once (we believe) we’ve fixed everybody’s account.

Once again, we are all *extremely* sorry for the mishap. Thank you for your continued patience while we clean up our mess.

Btw, Dreamhost published a different version of their apology and explanation on their blog which in my opinion was a bad way to apologize given the type of situation involved. If you have time you can also check out TechCrunch’s post regarding this issue.

Good thing the order wasn’t processed right away and that it didn’t cause any overdrafts cause if it did, I’d demand that they not only refund me but also pay for other bank fees that could’ve been charged to my credit card. This is not as bad as the security breach last year but it’s definitely worse than a 24-hour downtime.

Anyone else hosted in Dreamhost? Did you also get charged? What was your reaction?