Charter Communications accidentally deleted the contents of 14,000 customer email accounts last week. Charter spokesperson Anita Lamont said, “There is no way to retrieve the messages, photos, and other attachments that were erased from inboxes and archive folders across the country…. We really are sincerely sorry for having had this happen and do apologize to all those folks who were affected by the error.” Charter has decided to apply a $50 credit to the bill of each affected customer. Charter deletes inactive email accounts every three months. This error happened during this normal maintenance operation.

Now, for those of us geeks in the know… we know that these service providers do not typically backup this kind of data. Even web hosting providers, while the perform backups, don’t guarantee the integrity of those backups. Charter and many other providers are making a colossal business mistake here.

A Slashdot commenter figured the numbers for a backup system to handle this email system to be in the neighborhood of $500k yearly expense with a $1 million initial investment. Now, I’m no backup engineer but I have feeling that the numbers are out of whack a bit. For instance, he doesn’t take in to account that Charter likely has an enterprise backup system in place.

Business Mistake #1: Charter and many providers simply don’t tell their customers about this no-backup policy. It is almost always hidden in a length Terms of Service. I used this clause in a Terms of Service once when I ran a web hosting company and had a customer’s database and backup become corrupt. But, it is a nasty business practice. Why do they hide it? Because telling customers up front would cause a lot of questions and flack.

Business Mistake #2: Charter may have saved a ton of money by not providing a backup of email for their 2.6 million broadband customers. They lost 14,000 email accounts and that is less than 1% of their total broadband customer base. But the money saved may very well be lost in goodwill. The Associated Press picked up the story and to non-technical customers this is going to be a major turnoff. In an industry where no customer ever seems to be happy with their broadband provider, maybe Charter should look at spending a little bit of cash to avoid these issues.

In reality, business is all about the money. I’m sure some very well paid accountants crunched the numbers and determined that a backup system would cost more than it is worth to them. Maybe someone in marketing should start telling customers up-front what exactly customers agree to when they sign-up. Stop hiding it in a lengthy contract!