from the self-inflicted-reputation-wounds-are-surprisingly-pricey dept
Geek gadget also-ran KlearGear gained internet infamy thanks to the following paragraph tucked away on its “Terms of Sale and Use” page:
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.
Tacked onto this absurd redefining of “fair and honest feedback” was a $3,500 fee. This was levelled at a couple who complained about the non-delivery of products it had paid for. This went to court, and the couple was awarded over $300,000 in a default judgement when KlearGear no-showed.
For the most part, this would seem to be a cautionary tale — something other companies would take into consideration when crafting their own terms of service. But some companies are still apparently willing to dance with the Devil Streisand by including onerous fees tied to the phrase “fair and honest feedback.” Not only will the enforcement of this clause likely result in large amounts of public shaming, but in some states, this may actually be illegal.
In the interest of discouraging future KlearGears from dragging their customers’ credit ratings through the mud in response to bad reviews, we present a list of companies that still maintain similar clauses on their websites, along with dollar amounts demanded if this clause is violated.
Textbooks on Park – “legal fees and court costs”
Textbooks on Park, a Glen Ellyn, IL, strip mall resident, claims to service College of DuPage students with discounted books and, obviously, textbook rentals. In its rental agreement, it claims the following:
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 rental contract prohibits you from taking any action that negatively impacts Textbooks On Park, Inc. its reputation, products, services, management or employees. Should you violate this clause, as determined by Textbooks On Park, Inc. 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 be billed for legal fees and court costs until such complete costs are determined in litigation. Should these charges remian 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.
It’s hard to see what legal fees Textbooks on Park could possibly claim, unless it was actually able to successfully pursue a libel claim — in which case, there’s no reason for any of this wording to be included. Winning a lawsuit would generally avail it of most of these costs, and uncollected damages would, of course, be referred to collection agencies, etc. The only reason this wording is here is to discourage negative reviews.
Reviews at Yelp are mixed, as are those collected by Google. There seem to be some discrepancies between its stated policies and actual behavior. There’s no indication anyone’s been sued over these reviews, but why take a chance? Textbooks on Park says “support local businesses,” but this clause says take your business elsewhere.
Vinotemp International – $2.500
This manufacturer of wine racks, cabinets, coolers and cellars doesn’t have its non-disparagement clause posted at its site. Instead, it’s hidden in the fine print of the Terms and Conditions sheet packaged with its products. Vinotemp includes a few tweaks, but otherwise the wording is nearly identical to similar offending clauses:
… acceptance of this sales contract prohibits you from taking any action that negatively impacts Seller its reputation, products, services, management or employees, unless you have:
(A) first communicated with Seller, and (B) your statement/claim has been substantiated or validated by a judgment. Should you not follow this process, Seller in its sole discretion, will provide you 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 US $2,500, as liquidated damages, representing a fair estimation of damages, for it would be impracticable or extremely difficult to fix the actual damages…
As usual, uncollected fees will be reported to credit bureaus, etc. Vinotemp’s site links to its A+ BBB accreditation, but the company has only been a member since June of this year and has zero complaints on file. A more complete picture can be found at the BBB listing for its previous address, which has 19 complaints and no accreditation. For a longer discussion about Vinotemp’s problematic products and service, see this forum discussion at Wine Berserkers.
Final Step Marketing – $2750
This company ostensibly provides marketing services for companies, but its internet footprint doesn’t extend past self-reference. Hidden away from many exciting pages filled with buzzwords is Final Step’s claim that negative reviewers may be slapped with a bill for $2,750.
3rd Rock Adventures – $3000
Atlanta’s 3rd Rock Adventures offers guided tours of points of interest around the world. It also offers you the chance to engage in some “open and honest public feedback” for the low, low price of $3,000. The usual 72-hour removal window applies as does the reporting to credit agencies. 3rd Rock may be a perfectly fine company, but reviews are nonexistent — not even the expected glowing testimonials most companies post to their own websites.
Various companies – $3500
Here’s a fun bunch, all of which seem to have copy-pasted KlearGlear’s deplorable clause, including the $3,500 fee. All they had to do is switch out the company name.
Merthyr Motor Auctions (UK) – $3902
Actual price is £2,500.00 GBP, so your bad review damages may fluctuate with the exchange rate should you happen to reside outside of the UK. Again, the inclusion of this non-disparagement boilerplate is inexplicable considering reviews of the company are overwhelmingly positive. (Or does it mean it’s working?)
Church Freedom – $5000
This organization aims to “free” churches from the normal non-profit status and reorganize them as corporations to allow them to escape certain aspects of regulation, including taxes. In addition to hitting negative reviewers with a $5,000 fee, Church Freedom also threatens to do the same to people who file disputes/chargebacks or issue refund requests improperly.
Cronus Corporation – $5000
Not entirely sure what this company does other than generate buzzwords (“Digi-DNA® is the application suite that provides unified marketing metrics, integrated marketing services, sponsorship ROI enhancement, metadata management…”) but its web footprint is dominated by companies that spell their names differently — and those companies don’t charge customers for negative feedback.
Ink 4 Cake – $5000
Edible ink purveyor which seems to have a few issues, although mileage seems to vary from product to product. Also: $5,000 non-disparagement fees.
Token Energy (UK), Axtexs Fitness (UK) – $5463
Both companies will charge you £3,500.00 GBP for discouraging words, but Token Energy shaves 24 hours off the usual timetable for disparaging review removal (from 72 hours to 48).
Portascope.com Inc. – $6000
Niche marketer specializing in video endoscopy systems for veterinarians. Nearly doubles the established KlearGear standard with its $6,000 non-disparagement fee, but still can’t find the time to fill out the boilerplate pasted into its Privacy page.
From time to time Portascope.com Inc. may use agents or contractors who will have access to your personal information to perform services for Portascope.com Inc. (such as DATABASE MAINTENANCE, FURTHER EXAMPLES)…
Now, we arrive at our grand champion of the non-disparagement clause wars. Or would be if its site hadn’t gone offline sometime in the past couple of weeks. Fortunately there are screenshots and cached versions.
Acer Capital Recovery – $100,000
Seeing is gaping in disbelief.
The money quote:
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 TOS prohibits you from taking any action that negatively impacts Acer Capital Recovery llc™, its reputation, products, services, management or employees. You hereby agree to liquidated damages of $100,000.00 USD plus costs and actual damages for violating this provision.
$100,000 minimum for negative reviews. That’s ballsy. Of course, you can write any amount you want into your non-disparagement clause as long as you a) never enforce it and b) don’t seem to exist outside of a (now dead) website.
Below are the offices of this collection company.
The simple fact is these clauses don’t work. If someone decides to enforce them, they’re going to have a hard time collecting on them, especially once they get taken to court for enforcing clauses bordering on illegality. If the review is truly libelous, the court system is on their side and damages will be awarded, so attempting to price this out in advance is nothing more than a really lousy intimidation tactic.
If the company is horrible enough, word will spread even with the policy in place. And if a company with a terrible reputation attempts to shut up its critics with sky-high fees, the Streisand Effect takes over, putting them in an even deeper hole, as negative reviews pour in from internet denizens.
The best defense against these clauses is a good offense: public shaming. Perhaps a little advance adverse notoriety will result in the yanking of these clauses, and those formerly deploying these will actually learn to engage in open and honest feedback using the original definitions of those words.
Filed Under: gag orders, negative reviews
Companies: 3rd rock adventures, acer capital recovery, axtexs fitness, church freedom, cronus corporation, eyeglass lens direct, fight dentist, final step marketing, for rent no credit check, ink 4 cake, kleargear, merthyr motor auctions, new wave energy, portascop