Choosing a Managed Service Provider (MSP) is a critical decision for any business seeking reliable IT support and security. Unfortunately, not all MSPs operate with transparency or in the best interests of their clients. In recent years, a growing number of organizations have found themselves trapped by predatory contract practices that prioritize the provider’s profits over the client’s needs.
These hidden practices can lead to unexpected costs, limited flexibility, and ongoing frustration; often at the worst possible time. Whether you work with us down the line or not, our goal is to educate and prepare you to be mindful of different shady practices that you might encounter.
This article highlights five of the most common predatory practices that MSPs may bake into their contracts. By understanding these tactics, you can better protect your organization, negotiate more favorable terms, and ensure your IT partnership truly supports your business goals.
High Termination Costs
Many MSP contracts include steep early termination fees, making it financially painful for clients to leave, even when the provider isn’t meeting expectations.
These costs can take the shape of a flat fee, or a “discount” that is suddenly due upon providing notice or terminating the contract.
Example: If you cancel, you owe us the full value of your contract, or must pay back all discounts.
Confusing Termination Windows
MSPs may bury restrictive notice periods in the fine print, causing contracts to auto-renew if clients miss a short, confusing window for cancellation.
Example: You must give notice exactly 90 days before renewal, or your contract auto-renews for another year.
Aggressive Renewal Practices
Automatic renewals can catch clients off guard, especially when reminders are vague or absent. Often times, these renewals will extend the contract for years longer than the original scope.
Example: Your contract just renewed for another three years, and you didn’t receive a clear reminder.
Unclear SLAs (Service Level Agreements)
Ambiguous SLAs leave clients guessing about what’s actually covered, making it difficult to demand accountability when issues arise.
Example: The contract says ‘reasonable response time’ but doesn’t define what that means.
Low Cost-to-Value
On the surface, low prices in an MSP contract may look appealing, but hidden fees and limited support often mean clients pay more for less. This is especially dangerous when paired with unclear SLAs, high termination costs, and other predatory practices.
Example: Basic support is included, but every meaningful service costs extra.
Conclusion
Understanding these common predatory practices allow you to better protect your organization, ensure you receive the support you deserve, and negotiate more favorable terms. If you’d like a free contract review or want to learn more about fair MSP agreements, reach out to our team!
I know it may seem like we have a bias, but whether you work with us or not, we seek to do right by others. That means we’ll approach your contract with an open and honest mindset and explain to you if you’re getting a good deal, or if there are any concerns.
