Online Retailer Says If You Give It A Negative Review It Can Fine You $3,500

from the yeah,-that-sort-of-thing-would-NEVER-backfire dept

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.

Nicci Stevens sends in this report from Salt Lake City’s KUTV, which details the actions taken by one company against a dissatisfied purchaser who left a negative review at Ripoff Report.

For Christmas several years ago, Jen Palmer’s husband ordered her a number of trinkets from the website kleargear.com. But for 30 days, Kleargear.com never sent the products so the transaction was automatically cancelled by Paypal, Jen said.

Wanting an explanation, Jen says she tried to call the company but could never reach anyone. So frustrated, she turned to the internet writing a negative review on ripoffreport.com.

“There is absolutely no way to get in touch with a physical human being,” it says. And it accuses kleargear.com of having “horrible customer service practices.”

That was the end of it, Jen thought, until three years later when Jen’s husband got an email from Kleargear.com demanding the post be removed or they would be fined.

Kleargear, unfortunately, was not simply bluffing. Up until August 2013 at least (the date of the last crawl by the Internet Archive), Kleargear had this atrocious bit of wording on its “Terms of Sale and Use” page.

Non-Disparagement Clause

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.

Nice. I’m not sure what part of “fair and honest feedback” includes threatening unhappy purchasers with a $3,500 fine for publicly expressing their displeasure, especially considering Kleargear has made the clause entirely “eye of the beholder” by including the phrase “in its sole discretion.” There’s nothing “fair or honest” about this policy or the people looking to enforce it.

It’s especially shady considering the page has now been yanked by Kleargear. It no longer exists in its sitemap and reroutes to its “Bestsellers” page if the URL is typed directly into the address bar. The “Terms of Use” link simply puts you right back on its generic “Help” page. The nasty clause is gone and it’s only gone because Matt Gephardt at KUTV started asking questions.

Why would Kleargear insert such a customer-unfriendly bit of wording into its “terms of sales?” Maybe because its reputation used to be atrocious. (I mean, more so…)

There are many posts in addition to Jen’s on Ripoffreport.com as well as other online consumer complaint boards. In 2010, the company was slapped with an “F rating” by the Better Business Bureau for “not delivering products purchased online in a timely manner,” says the BBB’s website. Kleargear.com today has a “B” rating.

This clause makes you question the validity of its shiny “B” rating. (Not that a BBB rating isn’t questionable in its own right…) If it’s been heading off complaints with borderline extortionary tactics, that “B” is worthless. When Gephardt finally got an (anonymous) response from someone with Kleargear on its “Smile or Get Fined” policy, the person reached defended the $3,500 fee, stating that the threat towards Jen wasn’t “blackmail,” but rather “a diligent effort to help them avoid the fine.”

Obviously, the company doesn’t truly believe this tactic is truly justifiable or it wouldn’t have memory-holed the page with the non-disparagement clause. Even worse, it’s made no move to undo the damage it has already done to this customer’s credit by sending the unpaid, completely bogus fine to collections.

According to the Internet Archive, that clause didn’t exist in 2008, when Jen wrote her review, so there’s no way the company can claim that charge is legitimate, even by its own shady metrics. It actually doesn’t appear until June of 2012, suggesting that its battle to raise its BBB rating wasn’t going as well as it had hoped, but rather than overhaul its customer service, it decided to bill its way back to the top at $3,500 a review.

Now, it would appear that if you’re dissatisfied with your Kleargear experience, you’re free to let the internet know about without getting hit with a $3,500 bill… for the moment. The clause may have been removed because the company’s currently feeling a little heat, but if it was willing to use this sort of underhanded tactic to quiet unsatisfied customers, then there’s a good chance it will put something like this back in its “Terms of Sales” once it feels the worst has blown over.

Or maybe, just maybe, it will finally, after a half-decade, make an attempt to fix the underlying problem.

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Companies: kleargear.com, ripoff report, yelp

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Comments on “Online Retailer Says If You Give It A Negative Review It Can Fine You $3,500”

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116 Comments
That One Guy (profile) says:

The stupid, it burns!

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.

So you’re welcome to post any review, opinion or feedback… as long as it makes them look good. That’s not ‘fair and honest public feedback’, that’s unpaid advertising, with one heck of a massive threat if you do otherwise.

Just like the other stories that have been covered on this site about businesses with similar clauses, this shows yet again that any business that feels the need to moderate or control customer feedback, is one that doesn’t trust the quality of their product or service, and almost certainly rightly so.

btr1701 (profile) says:

Re: The stupid, it burns!

The whole thing is beyond stupid anyway, because all someone has to do to avoid the fine is have a friend or relative post the negative review for them. Example:

“My best friend (or sister or wife or whatever) recently ordered merchandise from Kleargear.com and this is what happened to her…”

The person posting the review didn’t actually use the site so there can be no claim that they agreed to any bullshit Terms of Use, and they can’t be billed/fined for posting the review, yet the message still gets out about the company and its shitty service.

Sneeje (profile) says:

Curious

I’m curious how this holds up under basic commerce contract law. If the sale was never completed, I’m not certain how they can uphold any “terms of sale”.

Even so, I’m certain this would not survive the other tests of a valid contract in commerce such as the typical consideration of equal understanding and equivalent value… seems like incurring a liability of thousands of dollars simply from the purchase of small-dollar items would not fit that expectation.

Sneeje (profile) says:

Re: Re: Re: Curious

Well, that’s not an accurate characterization of what happened, and in any case, your explanation of defamation isn’t correct. There are many tests that must be passed for defamation, including: whether the entity allegedly defamed was actually damaged, whether the entity is a public figure, whether the individual had specific knowledge (not first-hand or second-hand), whether or not the statements made are opinion versus fact, etc.

You can be a third-party, with specific knowledge if you observed the results of the transaction. The statements here also almost certainly would be ruled as opinion.

Unfortunately the issue is whether or not the defendants can afford to litigate even if they have a high likelihood of prevailing or recovering some/all costs.

JustMe (profile) says:

Re: Curious

Exactly! There does not appear to have been a valid contract, and this is also clearly a warning about poor service – which is an opinion and therefore protected.

Both of those reasons let me say that I read somewhere that KlearGear.com has terrible customer service and is overly litigious. I wouldn’t mind, of course, but I just can’t stand it when I hear that sites such as KlearGear.com might be disreputable because they never delivered the merchandise and also have poor customer service.

Phbbbbb~~~

ltlw0lf (profile) says:

Re: Re:

Of course, I also won’t be buying anything from them ever.

There is one flaw in this plan. How will you ever know they are a service not to be trusted if you don’t hear about it from someone else and haven’t had any experience with it yourself?

I have complained before about vendors, mainly because I too wasn’t receiving the help I needed from the vendors themselves to rectify the problem I was having. I am tired of buying stuff that a vendor promised would meet my needs, only to find out that they lied or misstated their selling points. Usually I’d contact the vendor first, but in some cases, I couldn’t contact the vendor because they didn’t publish any way to get in touch with them.

In most cases, vendors will go out of their way to help, even when it is obvious that I am the problem in the equation, but I’ve run into vendors who don’t care; they have my money and even though their product never worked as advertised or has serious flaws which require much more effort on my part to fix, they aren’t interested in me any more. Putting poor reviews online which explain the problem, my steps to try to fix it, and how unresponsive the vendor is helps me air my problems and in some cases gets the right people to help me out, but it also helps the community to know what problems may exist with the product and/or vendor.

I’ve had equally good experiences with companies, and sadly, they tend to not get the praise because everything works fine or they help resolve the problem quickly. While each experience is unique, sometimes just having a heads-up helps when dealing with a company you’ve never worked with before.

madasahatter (profile) says:

Re: Re:

Everyone has a list of retailers they refuse to do business with because of very poor service they received. Smart retailers try to minimize if not eliminate bad customer experience knowing a satisfied customer will be a repeat customer. In any business, sales to repeat customers are always easier and cheaper than obtaining new customers.

For example I have 4 companies I regularly buy computer parts from because I have gotten good value and service (in my opinion) from them in the past. So if I am looking for a new part I will visit their websites for selection, price, and availability.

out_of_the_blue says:

Heh, heh. -- NOW you see why I say web-site TOS are NOT legally enforceable!

“Terms of Sale and Use” is just text on a page, NO legal force whatsoever. Corporatized CRAP like that needs gotten to a jury and put so unequivocally beyond “legal” that even lawyers will understand not to even have the page up. I’d go for not less than a thousand times this alleged “fine”.

[ If the rest were legal, then “that clause didn’t exist in 2008” is irrelevant because those always claim ability to unilateral change without notice, and no doubt retro-active as well. They’re TOTAL lawyerly baloney. ]

Anonymous Coward says:

Re: My theory...

I think I figured out why you are so pissed at Google and come here to rant about it so much instead of posting to your own blog. Tell us how close I get.

Before Google came along Yahoo was the king of search, but afterwards not so much. Yahoo’s initial success afforded them the ability to purchase GeoCities, where you hosted your site. But with Google’s success, Yahoo’s revenues were in decline and they needed to cut costs so they eventually shut down GeoCities and you lost your site, which you naturally blame Google for. So having no where else to turn, you come here to bash them every chance you get. Am I warm?

Sunhawk (profile) says:

Re: Heh, heh. -- NOW you see why I say web-site TOS are NOT legally enforceable!

Well, some terms can have legal force, but the courts tend to axe unreasonable terms or ‘small print’-type terms.

For example, a court would likely uphold a term that cancels a provided service if the customer performs a charge-back (see Steam), but would slap down a term that states, like here, that you cannot say anything negative about the company or face a fine.

Of course, the other directions of attack are just gilding the lily (terms not in effect at the time of sale, it being a third party who complained, the sale not being completed), but why not pile them all on as we mock them?

Don't Just Sit There says:

Re: Re: Heh, heh. -- NOW you see why I say web-site TOS are NOT legally enforceable!

In addition, as mentioned above, the couple that was “fined” should check the SLAPP laws in their state. Their state may have laws on the books, some states do, that protect people’s rights to discuss things that are in the public’s interest to know.

The Palmers should take a proactive stance against this company and file a complaint with their state attorney general for consumer fraud, and fraudulent credit defamation, or whatever.

Anonymous Coward says:

Re: Heh, heh. -- NOW you see why I say web-site TOS are NOT legally enforceable!

Yeah, no. Terms of sales on website can and have been legally upheld, but it’s difficult. In this case it would definitely not hold up. In order for tos or tocs to be legally binding, incorporation by reference, and signing must be used (like click wraps) each time a contract occurs. The parties also have to affirm original access and adequate notification and resigning every contract update. So, yeah, they can be enforced.

IrishDaze (profile) says:

Re: Re:

Agreed. Not only did I FB this post, I also opened a support account with these jackasses simply to tell them this (because if course they don’t have a way to email them):

Protip: Doing business this way will ensure that your business fails. When this was published, you lost hundreds of possible customers, including me and everyone I know.

http://www.techdirt.com/articles/20131113/06112425228/online-retailer-slaps-unhappy-customers-with-3500-fee-violating-non-disparagement-clause.shtml

Anonymous Coward says:

Re: Re:

“…prohibits you from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees.”

We, on the other hand, will freely exercise the right to point a loaded gun at the proverbial feet of our reputation and pull the trigger repeatedly until such time as we have run out of ammunition as is the obvious aim of enacting this policy.

Pat says:

Who?

Who the hell is KlearGear?

And I’m pretty sure there’s something in the constitution, AKA Politicians toilet paper, that supersedes whatever bovine excrement they added to the end of their terms of sales.

It’s right there at the top…hard to miss.

For a company selling on the Internet (I assume)… they pretty clearly have no clue how their medium actually works…

Sunhawk (profile) says:

Re: Re: Who?

IANAL, but I’m pretty sure that contract law requires all people to be adequately informed, and the clauses to not be unconscionable. I’m pretty sure that in aggregate, that clause fails those tests.

Yup; a speech restriction is acceptable in an employment contract (also because they’re generally of the “don’t say anything about projects in development/private information that you have access to as an employee” type), but in a sale.

The closest you can get that would be acceptable to the hypothetical court is a “if you behave badly in game/on forums/etc we reserve the right to cancel the service”.

Anonymous Coward says:

Hey of course this is perfectly legal! The Supreme Court ruled it’s perfectly legal for companies to force you to agree to arbitration for any legal disputes and ban class action suits in the same clause. Even if said dispute is about such a low amount of money ($30 in the court case) that no serious individual would sue over it despite the company clearly breaking the law with false advertising, and that the banning of class action lawsuits would mean no justice for the millions of customers screwed out of an extra $30.

So really, this kind of anti-consumer TOS is just a natural extension of the court’s anti-consumer logic. After all, arbitration is often already rigged heavily against you, since the company picks the arbitrator, and the arbitrator has an incentive to rule in the company’s favor so that the company keeps on picking them to arbitrate disputes.

Jaydee (profile) says:

Don't Fall for the Bullying Tacticts!

There must be two things for a contract, consideration (each side gets something) and a meeting of the minds (each side agrees as to the deal). Even if the contract is ultimately valid, this company isn’t the government – they cannot issue fines.

They would need to file suit, which includes serving the defendent, and then win a judgement in court. Until then this person would owe nothing. They are just trying to bully. The collection agency is a joke. Tell them not to call under the Federal Fair Credit Reporting Act. If they persist *they* can be sued. If they try to report to credit agencies simply dispute and you will win.

To avoid court there would have to be arbitration agreed to in the contract. They can not just arbitrarily impose fines.

They are hoping to scare people. Don’t let them!

And as far as any libel / slander, the truth is always a defense, and you are always entitled to your opinion. Neither are actionable.

That One Guy (profile) says:

Re: Re: Hilarious.

“I don’t know about you, but when I make a minor online purchase, I not only make sure to read the TOS first, but go back on a weekly, and sometimes daily basis, for years afterwards, to make sure I or a family member don’t violate that website’s TOS, either as they were when I made the purchase, or after any changes they may go through after that.”

-Said no one ever.

BDuty says:

Re: Re: Hilarious.

What’s hilarious is that you, who lecture to read everything, obviously didn’t read the story. The part of the TOS they are trying to enforce wasn’t in there until YEARS after she gave them a bad review. And it wasn’t even her who made the purchase, so she can’t be bound by a sales contract when she didn’t buy anything. And the sale was canceled, so there wasn’t a sale period. Who needs to pay more attention again?

staci says:

Paypal doesn't automatically cancel transactions

They have no idea if it’s completed or not, you have to explain when you request a refund. Paypal has to verify non-delivery to make sure customers don’t try and pull a scam.

I also think there’s something wrong with credit reporting companies being able to ruin a person’s credit by relying solely on a reporting business. Doesn’t there have to be verifiable proof of some kind? Otherwise, think of all the jerky businesses or unscrupulous employees acting on their own reporting FALSE INFORMATION. If this article is true and the customer didn’t receive any of the order, then the transaction wasn’t completed and no payment could be expected and no FALSE REPORTING to deliberately screw someone’s credit. Grrrrrr! THAT’s the most worrisome (terrifying) aspect of this situation, the thought that someone can deliberately ruin my credit by reporting false information to credit agencies. Yeah, I’m repeating myself, lol.

Chris says:

Not a valid contract...

As the company did not deliver on the order they therefore did not hold up their end of the contract and in that case it is null and void.

They are not in a position to fine anyone anything nor seek out a 3rd party to render a bad credit rating. If I were them I would immediately apologize, have her rating fixed and hope she does not nail their butts to the wall.

chilinux (profile) says:

TRUSTe fails us yet again!

techdirt has stopped short of covering a much larger issue this story points to which is that KlearGear has shown how little the TRUSTe program does to protect the privacy of online shoppers.

According to TRUSTe, a website displaying the TRUSTe seal must provide and *follow* a stated privacy policy. When you review all the other facts, it is clear that KlearGear did not honor it’s own privacy policy.

Consider the following:

(1) The person making the purchase did not agree to the June 2012 Terms of Sale and Use, they agreed to the Terms of Sale and Use at the time of purchase.

(2) The person making the post (his wife) did not agree to the Terms of Sale and Use as she did not make the purchase.

(3) KlearGear started displaying the TRUSTe seal around Janurary of 2012.

(4) KlearGear started providing notice of the $3,500 legal fee after April 2012 (after use of the TRUSTe seal had already started).

The basis for the fee would be if Mr. Palmer agreed to the terms of the fee and also had taken action in violation of the terms. However, we know those terms where not provided at the time of purchase and he wasn’t the one that submitted the post. Hence, not only is the fee invalid, but by KlearGear providing personally identifiable information to a third-party (the collection agency), KlearGear had violated the published privacy policy. KlearGear continues to use the TRUSTe seal even today on it’s website.

Normally, this should mean TRUSTe will “resolve” the privacy dispute through their feedback system. However, this situation is even worse and only goes to further highlight how useless the TRUSTe seal is–Kleargear.com does not even appear in the TRUSTe directory of companies authorized to use the seal! While the image search website tineye.com makes it easy to find Kleargear.com’s use of the seal along with that KG has used it for almost 2 years, TRUSTe has done nothing to enforce it’s trademark. There is no sign of an pro-active step taken by TRUSTe to address either use of the seal or violation of privacy policy. Instead, TRUSTe has published “TRUSTe Alert” asking people to file a report. But to fill out the fields of the report, you must first have a piracy dispute with the company. Simply misuse of the seal is not enough.

techdirt really should be investigating TRUSTe as part of this article. Why didn’t use of the TRUSTe seal protect Mr. Palmer’s private information from being disclosed to the collection agency when the fee was never agreed to? Why is KG able to use the seal for nearly two years without being part of the TRUSTe directory? What is TRUSTe doing *pro-actively* to keep situations like this from taking place? Why should anyone trust a website that has the TRUSTe seal anymore than they should “trust” KG?

That Anonymous Coward (profile) says:

Re: Anti-SLAPP Legislation

Except the company never filed a lawsuit.
They sent a demand, the couple didn’t give in, company sends demand for $3500, couple doesn’t pay, company turns the bad debt over to collection agency.
Now the couple has ruined credit, has to fight a collection agency & credit reporting company. They face all sorts of undue burdens before they can pay more money to bring a lawsuit against the company that seems to be cutting and running.

Artur says:

Fine to all those who don't do business with me

Please I want to fine all those who don’t do business with me but are friends or family of the ones that buy from me , want to Fine you $ 5, 000 dollars for loses with the help of the credit report agencies , yes, the same agencies that never will help you when you find something wrong in your credit report unless they jack you up with mo money , I must state that I will never be in the BBB as a good service provider so I will be my own Judge with authority to even garnish you virtual money in the future when no cash exist , yes , all this will come soon or later but if this company can fine persons for nothing ( family ) I must have to find a way of living also , even if all virtual world call me a Internet crook , please , all replays good or bad responses to this comments will be taking seriously with the mighty GOD only if are pay with biticons . Big brother is watching you .

frankelee (profile) says:

Lawyering

I don’t get why so many commenters are worried about finding way to lawyer out of this based on the fact that the transaction didn’t occur and the ToS didn’t exist yet and so on. It’s immaterial anyway, it wouldn’t matter if she had signed it, a judge is going to laugh such a clause out of their courtroom. Though for some reason I just imagine the people behind Klear Gear won’t be adequately punished in civil or criminal court for their actions.

That One Guy (profile) says:

Re: Lawyering

The problem is the company wouldn’t need to so much as talk to a lawyer to hit them with the $3500 fine, as they’ve already got the credit card number, and they can just charge it directly. Alternatively, the company could hand the ‘debt’ to a collection agency, and let them harass the couple over the almost four grand they ‘owe’.

At no point would the company have to bring lawyers into it, but if the two being shaken down wanted to fight back, they would have to get a lawyer to do so, and that gets expensive fast unless they could find one willing to work for free, even if the case was decided quickly.

History Goy says:

Why Utah?

Utah is full of scammers because in their cult they believe the entire world was given to them by their god and that it’s not a sin to cheat unbelievers.

Ironically, many cults believe the same – including catholics, jews and muslims. In fact, their holy books go so far as to condone slavery, rape and genocide.

But that’s religion for you.

Mike says:

She blogged on Ripoff Report

Palmer wrote on a rip off site, which she patently was not… She claimed that they refused to mail her items to her – without verifying why the transaction had failed to go through…
Obviously not answering phones or completing a transaction is bad customer service as well bad for them as an trading entity. But not a rip off as rip offs go… and they didn’t refuse her service, they failed to proceed, which is a break down of sorts…
She has the right vote with her feet and the choice of where it is that she chooses to spend her cash and on what…. but not to attempt to disaffect a traders viability simply because good help is hard to find…
So in short; everything costs, her – her husbands credibility for her spleen venting rant and probably the credibility of the vendor for their over reaction… as well my time for sitting here and engaging with you all, cheers;-)

Jared (user link) says:

It certainly seems to contradict the concept of unbiased reviews. The purpose is to provide customers with opinions from others – everyone has an opinion based on their own unique experiences. What readers do with those opinions is up to each individual and their perception of what they read. Negative publicity, to some companies, is better than no publicity at all because people are talking about you.

Steve R. (user link) says:

KlearGear, Judge, Jury, Executioner

“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.” (Emphasis added) Well, I guess there is no need for a legal system. I wonder if KlearGear has a private “police” force to carry out this dictate.

Mark Wood says:

Have you seen their returns policy?

IT GETS WORSE! Have you seen their returns policy? If they send you something fraudulently (or someone steals your ID and orders a bunch of stuff) they don’t have to refund your money ever. If they do elect to refund part of your money, they will still charge you a restocking fee.

Customer ‘service’ like this is what killed commerce in Michigan. I predict that Grandville will become another Detroit. All because of this company.

Robby (user link) says:

Real Reviews From Real Lawsuits

Nice review/article. There is a new solution, site called CaseTree.com. It is developed freely by consumers for consumers to provide real reviews of companies in accordance to actual lawsuits (completely free and public). No more fake online reviews, unnecessary posts, or reviews done by paid PR sites that provide a useless rating systems based on what they see fit and without having any experience with that entity. No more fake reviews based on “monthly” PAID memberships by various entities.

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