In December 2008, John Palmer ordered some items from the online retailer KlearGear and never received them. His wife Jen responded to this poor service by writing a critical review about the company on a website called Ripoff Report. The incident eventually faded from Palmer’s memory until three years later when she received a demand from KlearGear to take the review down. If she didn’t comply, the company said, they would fine her $3,500 for violating a non-disparagement clause that they claimed she agreed to.
When she refused to pay the bill, KlearGear reported the debt to a collection agency. The Palmers’ credit score was hurt as a result, leading them to sue the online retailer for defamation as well as a violation of the Fair Credit Reporting Act. While the couple eventually won their suit, the case made such a splash that legislators began developing a bill to prevent future retaliation against negative reviewers. The result has been the Consumer Review Fairness Act, which prohibits companies from using “non-disparagement” or “gag” clauses against critical customers.
After passing the House of Representatives in September, the Senate unanimously approved the bill this month. “Reviews on where to shop, eat, or stay on websites like Yelp or TripAdvisor help consumers make informed choices about where to spend their money,” said Senator Brian Schatz. “Every consumer has the right to share their honest experiences and opinions of any business without the fear of legal retaliation, and the passage of our bill brings us one step closer to protecting that right.” Now all the bill needs in order to become law is President Obama’s signature, which he is expected to provide before leaving office in January.
- How did KlearGear’s plan to remove negative feedback backfire against them?
- Should President Obama sign the Consumer Review Fairness Act into law?
Source: Natt Garun, “It’ll Soon Be Illegal for Businesses to Punish Customers for Leaving Negative Reviews,” The Verge, November 30, 2016; Steven Nelson, “Retailer That Fined Couple $3,500 for Negative Review Hit With Lawsuit,” U.S. News and World Report, December 18, 2013. Photo by Laura Northrup.