Retailer loses case over critical online review
The case is not that unusual in many respects. A consumer orders a product from a retailer and, after failing to receive the item from the merchant, posts a negative review.
What makes a case in Utah different is that the retailer, KlearGear.com, charged the customer (and her husband) $3,500 for violating a "non-disparagement" clause in its terms of service. When the consumers refused to pay the fine, KlearGear reported the failure to pay to credit bureaus, which promptly lowered the couple’s credit rating, making it impossible for them to get a loan to fix a broken furnace. The result, as you might expect, was that the couple took KlearGear to court.
The U.S. District Judge in Salt Lake City, Dee Benson, ruled in favor of the plaintiffs, John and Jen Palmer, when KlearGear, which is based in Michigan, failed to respond to their suit. The company was found liable for defamation, intentionally inflicting emotional distress, interfering with prospective contractual relations and violating the Fair Credit Reporting Act.
- Utah couple win against company that charged for bad online review – Salt Lake Tribune
- Judge rules against Michigan-based retailer over critical online review – The Associated Press/Detroit Free Press
Generally speaking, how should retailers respond to negative reviews posted online about their products or services? Are you aware of any other retailers that include non-disparagement clauses in their terms of service?