In 2008, John Palmer placed an order with Kleargear.com that never came. The transaction was cancelled by PayPal, and his wife Jen Palmer called the company to investigate, but could not reach a customer service agent.
Frustrated with her experience, Jen wrote a negative review on Ripoffreport.com, explaining that she was never able to get in touch with a human being.
The review sat for three years, until Kleargear.com caught wind of it and sent John an email demanding that the post be removed within 72 hours, or he would face a $3,500 fine. Kleargear cited a non-disparagement clause in their terms of sale:
“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.”
After receiving the notice, Jen attempted to comply, contacting Ripoffreport.com to have the post removed, but removal is against the website’s policies. When her 72 hours was up, Palmer was fined $3,500 by Kleargear, and, after not paying the fine, her delinquency was reported to the credit bureaus.
The Palmers have disputed the delinquency, but Kleargear insists the charge is valid. As a result, they’ve faced rejection letters from lenders as they make home repairs and attempt to buy a new car.
“This is fraud,” says Jen. “They’re blackmailing us for telling the truth.”
But the Palmer family hasn’t gone down without a fight. Now represented by Public Citizen Litigation, the Palmers demanded $75,000 in compensation for the incident and damage to their credit. They also demanded that Kleargear throw out the ridiculous clause they’ve used to put the Palmers through the wringer. Public Citizen promised to file a lawsuit with significantly greater exposure if Kleargear refused to meet their demands.
Since sending the letter, Kleargear has removed the clause in question. Public Citizen points out that the clause wasn’t even in effect when John attempted to make a purchase from Kleargear. And even if it was, the clause is invalid due to one-sided, broad, restrictive, and opporessive terms.
It looks as if the law will be on the side of the Palmers. Early in 2013, the Virginia Supreme Court ruled that businesses can’t censor online reviews until they are able to prove that the statements are defamatory or libelous. If Jen Palmer’s statements are true as they appear to be, Kleargear’s actions won’t hold up against the lawsuit. But in the court of public opinion, it appears that the online retailer has already lost.
Negative stories about Kleargear have appeared on high profile news sites including BusinessWeek, CNN, TechCrunch, and Slate. In November, when the story first broke about the $3,500 fine, Kleargear had to go into social media lockdown. The company’s Twitter account has disappeared, and their Facebook page is an unusual privately managed ghost town — but still features negative comments from users. And Kleargear is under investigation for using the names and logos of the Better Business Bureau and TRUSTe without permission to do so.
Due to a quasi-legal and questionable fine, Kleargear’s online reputation is now forever tarnished. The damage done by the Palmers’ story is far worse than the damage done by the original review. Kleargear’s mistake offers a lesson to businesses: though the customer isn’t always right, if they are, it’s public relations suicide to attempt to bully them into removing a bad review that you’ve earned. Next time — if there is a next time — Kleargear should follow the advice of Yelp: respectfully contact customers who have posted bad reviews, apologize, and do what you must to make it right. Encourage dissatisfied customers to give you another chance, and then politely request a revised review. Even simply ignoring a bad review is better than slapping customers with a lawsuit. What was Kleargear thinking?