KlearGear is getting back into the pay-to-complain business. Despite being forced into hiding after news surfaced that it had (fraudulently) attempted to extract $3,500 from a negative reviewer using a bogus non-disparagement clause hidden in its "Terms of Sale and Use," the company continues to limp along, avoiding taking responsibility for its actions.
As KUTV.com notes, the impossible-to-locate representatives of KlearGear were no-shows in court. (h/t to Techdirt reader Howard Robinson)
The court clerk declared kleargear.com to be in default on March 11, 2014. Eight days later, Michelman proposed a default judgment which reads, "kleargear.com is liable to [jen and her husband] for violating the fair credit reporting act, for defamation, for intentional interference with prospective contractual relations, and for intentional infliction of emotional distress."
Michelman told Get Gephardt Thursday that he expects the judge will sign the motion and order kleargear.com to pay restitution to John and Jen.
The proposed default judgment does not say how much kleargear.com will be asked to pay. Rather, Michelman has asked for a future hearing where the judge would determine the penalty. A letter sent to kleargear.com by Michelman before the lawsuit was filed said John and Jen would ask a court to award $70,000.
So, for the want of $3,500 (via a BS clause hidden in the terms of sale and not even active when the suing couple purchased [but did not receive] an item from KlearGear), the company is now potentially out $70,000 (thanks to Public Citizen's efforts
on the Palmers' behalf). That's if anyone can get ahold of the company's owners. So far, these principals have managed to avoid being smoked out by the internet heat.
But there's even more to this story. The original non-disparagement clause, which was pulled down shortly after KUTV's Matt Gephardt started asking questions, has now resurfaced
. The gotcha clause has been placed back in its original spot in the "Terms of Sale and Use" (albeit under a slightly different url -- "termsofuse1," rather than "termsofuse").
Also making a return is KlearGear's horrible "chargeback" policy, which similarly disappeared briefly along with the non-disparagement clause.
[S]hould Klear Gear receive a chargeback (a sale reversal that occurs when a customer contacts his or her credit card-issuing bank or credit card company to request a refund for any part of a purchase that they or someone else made on their credit card) or other reversed charge from a third party (e.g., PayPal), credit card company or bank on your behalf before Klear Gear has been given a chance to resolve the issue as provided in this section, Klear Gear has the right to collect on the shipped products or rendered services and any fees associated with those disputes.
Klear Gear charges a $50.00 Dispute Fee per above-described Dispute should KlearGear.com not be given an opportunity to resolve any dispute as provided in this section, and the offending customer's personal information (with the exception of sensitive payment method details) will be provided to BadCustomer.com to limit the customer's ability to purchase from other retailers and service providers. The Dispute Fee is not refundable, even if Klear Gear wins your dispute or if you later cancel your dispute. By making a purchase through KlearGear.com you expressly authorize KlearGear.com to charge to the credit card you have provided to purchase the goods or services in dispute.
If Klear Gear is unable to charge the Chargeback against this credit card, Klear Gear shall have the right to otherwise collect the Dispute Fee from you. If Klear Gear is unable to collect the aforementioned Dispute Fee within 30 days of first attempting to charge you under this agreement, Klear Gear will forward your account to our external collections agency and assess an additional $500.00 Collection Fee. The original Dispute Fee and Collection Fee are subject to 2% monthly interest until the balance is paid in full including associated collection fees, legal fees, and costs of court as assessed separately by our collection firm. As a customer of KlearGear.com, you hereby expressly agree to these Terms.
Not only is this a lousy way to treat customers, it's an absolutely abhorrent way to "provide" customer service. Not only will KlearGear hit you with an immediate $50 charge, it will forward this charge to a collection agency within 30 days and tack $500 on top of it. As if the pocketbook hit weren't excessive enough, the company will also spitefully drag your name through the mud via Badcustomer.com should you have the gall to dispute a charge. The use of Badcustomer.com points to more disreputable actions on Kleargear's part. The whole clause has been reinstated, apparently blissfully (or evilly) unaware that the website was shuttered by the FTC in 2011, after being found guilty of participating in a "cyberbullying billing scam" that "siphoned $275 million"
from credit card users' accounts over a period of 4 years. I guess if you're a bullying company, you partner with other, equally-bullying "colleagues."
There's a bit of history to this policy as well. For the first few years of business, neither of these godawful clauses existed
. KlearGear ran like a normal, reputable business. The $50 fee/chargeback policy didn't show up until May 2007
. In July 2007, the policy remained the same, but the wording now referred to a company called "Havaco Direct"
which had the "right" to hit customers with a $50 chargeback fee. By October, "Havaco Direct" had vanished from the policy's wording
It wasn't until December of 2009
that KlearGear threatened to notify Badcustomer.com about customers who dared to exercise a chargeback. It wasn't until June 2010 that it added the $500 "collection fee."
Syncing this timeline up with KlearGear's BBB troubles is enlightening.
By May of 2010, KlearGear was sporting a gaudy "F" at the Better Business Bureau
, the same entity that has given a terrorist organization an "A"
simply because it followed all the rules. This suggests that KlearGear's customer service has been abysmal for quite some time. (The BBB site notes that 95 of 123 complaints over the previous three years had gone unanswered by the company.) As the chargebacks and complaints mounted, the company apparently decided to address the issue by making it financially unwise to dispute charges and, after being outed in 2012 by the BBB for fraudulently awarding itself an "A" on its website
, it added the non-disparagement clause (in June of 2012) as further disincentive for unhappy customers to make their complaints public. KlearGear was stripped of its BBB accreditation in November of 2012.
Now, with its failing to show up in court and having reverted to its customer-punishing ways, KlearGear appears to be more than happy to take money from unwitting chumps and have every incentive not
to take care of these blissfully ignorant customers. Why fulfill an order when you can collect anywhere from $50 to $3,500 for treating them poorly?
With its nonexistent staff, numerous address changes
and unwillingness to confront any of these issues, its bizarre, abusive "terms of sale" seem to indicate the owners (whoever they are) are willing to run this business into the ground and walk away from the wreckage. Trying to apply logic to its business practices leads one to speculate that it's actually not an ignorant man's ThinkGeek, but rather an elaborate front for something shadier, like money laundering.
KlearGear very likely isn't a front, but rather, a business run by combative people with lousy business acumen and even lousier customer service skills. It's one thing to take someone's money while burdening them with bogus (and supposedly binding) clickwrap Terms of Sale. It's quite another to actually fulfill your end of the bargain and provide them with their purchased items.
Until someone actually outs those responsible for this debacle d/b/a KlearGear, about all anyone can do is spread the word about its abhorrent policies and hope that no one they know is putting their money into clearly undeserving pockets.