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How Godaddy profits from clients who suffer from cyberextortion

Saying NO to a $100 charge from a cyber extortionist has led to a near $400 bill from Godaddy.

godaddy cyber extortion scam
Image: KnowTechie

As the cybersecurity market approaches $260 million by 2025, one company, Godaddy, is already cashing in even if it comes at the expense of customers who find themselves in a predicament. The phenomenon of “cyber extortion” and hacking is ever-growing – thanks to the gigantic rise in both Wordpress websites and freelance service sites.

The gig economy has become the perfect breeding ground for a cesspool of hackers

A cesspool of hackers from Pakistan, Russia, India and elsewhere hang out on freelancing “gig” type websites to advertise cheap services such as server migration and “WP fixes.” This is actually where they generate their targets. They then disable critical functions and extort customers for additional money to fix it – often hitting the same target twice with cyberextortion.

I am going to share a recent experience that happened with a handful of Wordpress sites – and how saying NO to a $100 extortion fee, has led to a bill of almost $400 from Godaddy, the registrar and hosting provider.

How Godaddy profits from clients who are hit by extortionists

On the 27th of August 2019, one extortionist from Pakistan had hit 9 sites hosted on Godaddy and another three that are with the Godaddy registar, but pointed to another hosting provider. He got access when given a complex Wordpress migration task – a “lead” he generated via a freelancing gig.

Immediately both hosting providers were contacted: Godaddy, and another specialist Wordpress hosting firm. The latter quickly fixed the matter by restoring the server to a point in time and sites were up and running again in less than an hour.

In the case of Godaddy, I was informed that it would cost $100 per site to restore all the sites that are down. I asked whether there was any other option, and the Godaddy representative said no, this is the only way they can get the site back up – and referred to it as a “courtesy service.” After much complaining and informing them that this is worse than cyberextortion itself, they ended up lowering the fee to $79 per site plus an “essential website backup” of $17.94 per site.

Customers blamed for not following Godaddy updates on Twitter, or customer loyalty being penalized?

Not so sure whether the onus is on the customer to follow Godaddy on Twitter to make sure they know week after week what is the latest hosting plans Godaddy releases to try and compete with Siteground, Bluehost Hostgator, perhaps this is implied: When confronting a Godaddy representative – explaining that this is a loyal customer account that has been with them for almost 10 years – and who upgraded to the most expensive shared hosting plan available, he said that it is actually an outdated “old” hosting plan that does not come with the latest security and backup features.

In other words, if you were a new customer, you would have been covered, but since you’re an old customer who spent more than $4K with Godaddy – you’re not covered with simple backups? That doesn’t make any sense.

Why do very few consumers know about these problems?

The challenge is that this type of information never reaches the consumer, due to the big fat budgets that hosting providers apply towards promotion and online reputation management. This is because established hosting providers are highly profitable in recurring revenue and have no shortage in their digital marketing budgets. So fake hosting review sites across the web literally flood Google with disinformation which hides the challenges the industry face.

In reality, many hosting providers have crafted the perfect solution in their sales funnel to profit from what is the most obvious problem Wordpress users face: cybersecurity. When faced with a problem – this is one of the easiest converters: because sites remain offline unless people cough up and pay. Clearly this is a matter business owners need to address, after all, it is a growing phenomenon, and it is time to put ethics before profit in the tech industry.

The final takeaway

There are times when hosting providers can benefit from upsells. Then, there are other times, when aggressive upsells lead to high churn rates – for example when profiting from a customers’ predicament in the event of an already frustrating situation, such as a hack or cyberextortion.

The latter is where hosting providers like Godaddy fall short. There are other methods of upselling that is even more offensive that the GoDaddy upsell: Siteground, for example, uses a high number of contacts via standard Wordpress spamming, as an excuse to disable people’s hosting and insisting they upgrade to an even more expensive package than the “GoGeek”, which is supposedly suitable for professional WP users: they take the user offline and insist they get an upgrade to restore services again.

The hosting providers that can get the balance right between a useful upsell and a churn driver, will be the ones to take more business away from the two fat cat providers mentioned here.

Have any thoughts on this? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.

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As an analyst of global affairs and international marketing consultant, Adriaan has an MSC from Oxford, with diverse interests in the digital economy. He covers mostly topics related to his qualifications. He is a specialist trainer for Linkedin Learning (Advanced Analytics & Google Ads) - with more than 200 000 students! He also writes for Jpost.com and other media outlets.

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