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It's sad to read of folks having billing issues. I buy about a book a week at Kobo and have yet to have experienced a problem. I buy myself a gift card every couple of months, with Paypal or a credit card, and let the purchases reduce the balance.
I read most of the titles as kepubs (native Kobo format) reserving the epubs for backup. I still have not run into something I would call "horrible formatting" from any commercial title, although Penguin's Rumpole Omnibus Vol 1 was riddled with typos (obviously, not Kobo's doing).
There are formatting differences between Kobo's Android app, the Kobo Touch with an ePub and the Kobo Touch with a kepub title. I read mystery fiction, for the most part, so it's pretty tough to mess up the formatting as it's all just paragraphed text.
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