Online Retailers Fight Negative Reviews – What’s the Cost?

Online Retailers Fight Negative Reviews – What’s the Cost? image Online ReviewsCustomers today have a sense of freedom and power they didn’t have a decade ago when social media was still in its infancy. But as social media has become a part of people’s daily lives, more people are turning to business review sites like RipoffReport.com and Yelp.com, as well as social sites like Facebook and Twitter, to post comments about a company or product.

Many purchasers will often read customer reviews before purchasing a trip, a toy, a smartphone or even making a reservation at a local restaurant.

There is an ongoing debate about the limits of consumers’ free speech rights and companies’ efforts to quash negative online reviews due to a recent incident over a customer review about KlearGear.com. KlearGear threatened to fine the customer $3500 if she didn’t take down a negative posting about their company. She had written the critique on RipoffReport.com.

According to a recent article in TechDirt, “Lots of quasi-legal action has been taken over negative reviews left by customers at sites like Ripoff Report and Yelp. Usually, it takes the form of post-review threats about defamation and libel. Every so often, though, a company will make proactive moves (usually bad ones) to head off negative reviews.”

In the Kleargear imbroglio, a consumer complained that her husband had ordered a number of products from Kleargear.com and 30 days later the products allegedly had not yet arrived. The consumer tried to call the company to check on the status of her order but was allegedly not able to reach anyone, so she wrote about her experience on RipoffReport. After the company saw the post, the consumer was threatened to either take the negative review down or be fined.

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Palmer ignored the threat by Kleargear but there were serious ramifications: The ABA Journal, a legal journal published by the American Bar Association, reports, “Although Kleargear apparently didn’t sue to force [the consumer] and her husband to pay the $3,500 fine after its takedown demand several years ago was ignored, it did report her as delinquent to credit agencies, which has made it impossible for the Utah couple to get loans for a car and to fix their furnace, according to the station. The couple has disputed the negative credit-report entry to no avail.”

According to TechDirt, Kleargear had “non-disparagement clause” in place – which they now say has been yanked from Kleargear (probably due to the negative publicity over the current issue) that reads in part:

In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees.

Should you violate this clause, as determined by KlearGear.com in its sole discretion, you will be provided a seventy-two (72) hour opportunity to retract the content in question. If the content remains, in whole or in part, you will immediately be billed $3,500.00 USD for legal fees and court costs until such complete costs are determined in litigation. Should these charges remain unpaid for 30 calendar days from the billing date, your unpaid invoice will be forwarded to our third party collection firm and will be reported to consumer credit reporting agencies until paid.

The ABA Journal writes that other companies are adding anti-disparagement provisions to their terms of service but the legal issue is whether these provisions are really enforceable and the ethical question of whether they should be.

Of course, if you intend to enforce an anti-disparagement clause against a customer for non-delivery of a Christmas present, you also should be prepared for hundreds of news articles and blog posts disparaging your company for its Scrooge-like policy. You also might expect a lawsuit (filed this week in Utah federal court) suing your company for violating the Fair Credit Reporting Act, defamation, intentional infliction of emotional distress and more. It’s going to be a very expensive fight over $3,500.

Discuss This Article

Comments: 7

  • John Palmer says:

    To clarify:

    We didn’t ignore it, we tried to work with Kleargear and RipoffReport, we even posted up an addendum on the original report, but that wasn’t good enough for Kleargear, and they fined us despite our efforts.

  • Jenny says:

    If I’m not mistaken, the clause in question was not in their TOS at the time of the order, either. So how does it even apply to their order?Did George Lucas retcon it in? He’s good at that sort of thing. Moral of the story: if a company tells you they will fine you for complaining about them, its a good sign that they KNOW you are going to have complaints.

  • Phil says:

    I think Kleargear is nuts if they allow this to go to a jury.

  • Peggy says:

    If the Palmers did not “slander – definition: saying something that is not true”, about the Kleargear company by simply leaving an honest and truthful review then the Kleargear company does not have a case. However, if the Palmers have had “their” reputation and credit “allegedly” slandered and damaged by the Kleargear company, then they themselves should continue to pursue a law suit.

    Freedom of Honest Truthful Speech is a right to ALL here in America and should be respected.

  • Suzy Homebody says:

    The Ripoff Report is a BS company that feeds trolls, anyway. They hide behind Freedom of Speech, which is great, however, when comments fall into defamation territory and lies, even with proof of the lies, they allow the falsehoods to remain on their site.

    They are a playground for trolls, and if you file Ripoff Reports about the site itself, they won’t print them, meanwhile the out and out fabrications about people and companies are allowed to remain.

    I hate the Ripoff Report and hope the entire site gets removed from the internet someday. It began as a good thing, but morphed into a bastardized version of itself and us now just a place for peoples’ lives to be ruined.

  • Jerry says:

    Seems pretty dumb and petty to fine someone for a bad review. The bad press Kleargear receives far out ways any review posted on a website no one has ever heard of. Ill never buy anything on their website.

  • Rod says:

    if Kleargear cancelled the purchase order then the terms of service for that order obviously do not exist since there is no contract remaining… I would not only sue them I would file charges for extortion.

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