The online backup service Livedrive is facing legal action from discontented customers after it shut down hundreds of UK users’ accounts, the Guardian has learned.



Paul Parkinson, from London, says his account was deleted despite a warning to Livedrive from his lawyers warning against such a move. He is now considering legal action against the US-owned company, which also provides online backups for PC World under the Knowhow brand.

Another former user, Amar Patel, who runs Reminisce Photography, started his trial on 19 January 2014 and signed up for a two-year service by the end of the month. Patel is also considering legal action after his account was terminated and family pictures of his young child deleted.

Livedrive’s UK chief operating officer, John Eikenberry, told the Guardian that fewer than 400 people have had their accounts cut off for “excessive bandwidth/storage” use in the past year.

Eikenberry declined to specify precisely what constituted “excessive” use. “This is information we would not make public,” he said.

Livedrive says it provides online backup “for all of your computers, from just £3 per month”, and that its Pro Suite offers as much as 5TB of cloud storage including “unlimited backup for five PCs”. Its terms of use say that it can terminate accounts for those who “use the Services in a manner that results in excessive bandwidth usage, as determined by us”.

Livedrive is a UK company owned by J2 Global, an American company which provides a number of virtual services such as faxing, e-receptionists and hosted email services.

In the second quarter of 2014 J2Global reported pre-tax profits of $63.7m on total revenues of $144.7m, setting a new revenue record. Its online backup business, which includes Livedrive, is now approaching $60m in annual revenue, according to the company’s financial statements.

The latest financial statements say each Livedrive customer generates roughly $100 per year in revenues.

Insufficient explanation

Livedrive’s angry customers say they were cut off without sufficient explanation or any option to rectify the problem.

“If they had simply said ‘you’re a big user of our service, here’s a business or high volume package for larger customers’, we’d have paid up and been happy,” said Parkinson told the Guardian.

Customers also complained that the Livedrive support phone line was extremely busy and gave no further explanation. “Telephone support? Is there any?” asked Andy Sharp, who saw his Livedrive account cancelled for an unspecified breach of terms and conditions. “I’ve not spoken to anyone, nor been able to reach a human.”

He said that he asked for clarification in reply to the initial email from Livedrive notifying him of the breach, and received an answer assuring him “nothing was going to take place with my data or account before receiving any further communication”.

There was no further communication - and then he found his login blocked and account closed.

“It could be that Livedrive has looked at their forecast and have thought that it’s time to make a cull,” suggested Sharp. “Big storage, high speed, low ROI [return on investment], get rid of them. No refund, any complaints read the terms of service. I doubt that I have the patience to see if there is any legal course to take, put it down to a bad experience and move on.”

Eikenberry admitted that Livedrive has not handled account closures well. “I’m not 100% satisfied with how the communication unfolded following the identification of the accounts [deemed to be in breach],” he said, adding that the services gets “thousands” of signups every day and that “we only needed to close a very small percentage of users due to misuse”.

A number of customers who have got in touch with the Guardian have complained that Livedrive had cut them off even though they have not changed their use of the service.

One email giving 30 days’ notice of account termination said: “Unfortunately as the breach relates to actions that occurred during the tenure of your account ownership rather than an individual event or action, it is not possible for you to continue your account with us.”

Asked why Livedrive had not previously contacted customers who it claimed were “disrupting” the service over an extended period of time, Eikenberry responded: “I agree that we should have acted sooner on these issues, though the correlations to bandwidth were drawn only recently as part of a more detailed reporting requirement.”

Patel is angry at what he sees as Livedrive’s cavalier approach, in which the impending deletion of his stored data was communicated by email in which he was told he had breached the terms of use - even though he had specifically checked that his use would be compatible.

“Before I signed up for the Livedrive service I spoke to Livedrive sales about what I’ll be using the service for, how much data I would backup to Livedrive and if there was any limitation that I needed to understand or be aware of,” Patel told the Guardian. “I was told none. I also explained that I have a fast fibre internet connection which means that I’ll be uploading data at a fast rate. I was advised that the £3 backup service was sufficient and that the Livedrive IT Infrastructure is sufficient to be able to handle the upload speeds and the data that I would be uploading to their servers - I was told: ‘that’s exactly what Livedrive was designed for and hence Livedrive offer unlimited storage as well’.”

‘Excessive bandwidth’

However Livedrive subsequently said that Patel had used “excessive bandwidth” and told him it would delete his account.

The same reason of “excessive bandwidth” use was given to Duncan McClymont, of Wiltshire, who also had his account deleted, despite having signed up for the “Unlimited” service.

McClymont, who says he has stored a total of 5 terabytes (5,000 gigabytes) of data on the service since signing up more than three years ago - which would equate to nearly 3.5GB of data per day - said he was surprised about the abruptness of the company’s move.

“On an unlimited service?” he said, questioning the reason for the deletion. Despite repeated requests, McClymont says he has not been given any detailed explanation of how he had exceeded Livedrive’s bandwidth restrictions - which, he says, he did not know existed.

Of the threat of legal action, Eikenberry told the Guardian “We are satisfied that the actions which we were obliged to take in this instance were carried out in accordance with the terms of our agreement with these customers.”

Sharp, who signed up in December 2012 and was thrown off the service in June 2014, told the Guardian: “Obviously, I’m not very pleased with the level of service from Livedrive. It all comes across as a rather expensive waste of time.”