
Woman Facing $3,500 Fine For Posting Online Review - cdodd
http://www.popehat.com/2013/11/15/new-from-kleargear-free-speech-only-3500-plus-shipping-and-handling/
======
crazygringo
> _But a lawsuit isn 't at the heart of KlearGear's despicable tactic. Ruining
> the credit of its critics is. ...If that fine is not paid, the delinquency
> will be reported to the nation's credit bureaus._

Question: what ability do most companies have to report something to credit
bureaus? I mean, selling my stuff with just Stripe and a DBA, I certainly
can't, as far as I know. Credit-card companies themselves certainly can, on
the other hand.

Is there a way for "normal" small businesses to affect your credit score based
on any kind of non-payment of bill? How do businesses "acquire" this ability?
Can anybody just tell a credit score company, "X didn't pay me money, knock
their score down"?

I'm just wondering if this is a bluff, which it probably is.

[Edit: Googling it a bit reveals that there are two methods. One is to hand
the debt over to a collections agency -- you'll receive less of it, but
they'll automatically report to a credit bureau if it's not paid. The other is
to become a member of the three main credit organizations, but that involves
membership fees etc., so presumably only makes sense if you deal with a lot of
consumer billing already where this is a regular occurrence.]

~~~
D9u
The article states that Kleargear hands off delinquent accounts to a
collection agency... Kleargear generates a fraudulent invoice for the alleged
breach of contract, and if no payment has been remitted in the 30 day interim,
the account goes to collections.

You, and I, could do the same. (hopefully without the fraud)

~~~
omarali
Can a collection agency affect your credit without having your ssn? Credit
card providers ask for ssn. So do utility companies. But buying something from
a company doesn't involve providing an ssn.

------
tokenadult
As the blog post kindly submitted here points out, the company's conduct
appears to be fraudulent, and there isn't the tiniest chance that the woman
who made a legitimate factual statement about the company in an online review
will have to pay even one cent to the company. Good on Popehat and other sites
for spreading the word about how scummy that company is. (By the way, the
title of the submission here is misleading, and is not the original blog post
title. Popehat's title is "New From KlearGear: Free Speech, Only $3,500 Plus
Shipping And Handling," and that even fits the length limit imposed by Hacker
News.)

You can find TechDirt's coverage, which prompted the blog post submitted here
with additional legal analysis, at the TechDirt site.

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

The TV news report that got this story rolling:

[http://www.kutv.com/news/features/gephardt/stories/vid_474.s...](http://www.kutv.com/news/features/gephardt/stories/vid_474.shtml)

AFTER EDIT: To answer the question that has come up, which I think is
adequately answered by the submitted blog post, companies can report consumers
to credit bureaus for nonpayment, including nonpayment of civil judgments. But
when those reports are fraudulent, as here, the consumer can also dispute the
report, and the consumer should be able to come out with a clean credit record
in the end. MANY years ago, my wife ordered a product by mail order, and we
discovered the product was defective, and returned it. The company still
wanted to bill us, and sent us a letter threatening to report us to a credit
agency if we didn't pay. I simply wrote that the product was defective and
that we had returned it and we disputed the company's point of view on the
company's demand letter, and sent that back by return mail. That was the end
of the matter, back in those days. We have a very clean credit history. I
speak my mind whenever I think I have been ripped off.

~~~
sillysaurus2
_But when those reports are fraudulent, as here, the consumer can also dispute
the report, and the consumer should be able to come out with a clean credit
record in the end._

This isn't what happened. See here:
[http://m.kutv.com/article?id=106632](http://m.kutv.com/article?id=106632)

Specifically: _Jen and her husband also disputed the ding with the credit
bureaus but because Kleargear.com says the charge is valid the the ding
remains._

I've personally experienced what it's like when credit bureaus decide to
mistreat you, so I believe this. She likely has no recourse to dispute it
short of hiring a lawyer, which is effectively impossible if she happens to be
living paycheck-to-paycheck. (It's hard to grok the mental burden placed on
you merely to survive, let alone repel an assault from a big, faceless company
unless you've been in a situation like "I have to choose between buying
groceries or paying for my dying cat's medical treatment," for example.)

If the reported version of events are true, then what this company did to her
is reprehensible and should be punished. Otherwise it will set a dire
precedent for other companies to try this in the future.

~~~
aagha
If only there was a way to "punish" such companies.

------
jlgreco
This story has the stench of meltdown on it. Like when Jack Thompson slowly
lost his sanity, when Charles Carreon lost his marbles when dealing with The
Oatmeal, or basically the entire Rightshaven situation...

I have the strong suspicion that this has the potential to get much uglier and
more bizarre. Going after this woman _three years_ after she left her comment
is not something that a sane company/legal representative in a good position
decides to do.

------
AnIrishDuck
Ugh... if a HN title ever needed a change (the current one is "Woman Facing
$3,500 Fine For Posting Online Review"), it's this one.

Jen Palmer is not _facing_ a $3,500 fine any more than I'm "facing" the threat
of being struck by a meteor on my birthday. She'll pay this horrible company a
dime the day Eskimos need to worry about tigers, and I actually can think of a
good analogy.

This title seems intended to gin up outrage where there should be none. To be
sure, I'm outraged at this company's terrible ethics. But in this case our
legal system actually works. News at nine.

~~~
corresation
They reported it to credit bureaus, destroying their credit. They should be
sued and penalized for that (in normal dealing that would be fraud if not
extortion), however the threat and consequence is very real.

[http://m.kutv.com/article?id=106632](http://m.kutv.com/article?id=106632)

~~~
sillysaurus2
For anyone who hasn't experienced it: Credit score literally determines your
quality of life in America. I couldn't get internet for a new apartment at age
21 because I was "unknown risk" since I'd never bothered to use credit very
much.

To be clear, I hadn't missed any bills. I just hadn't used much credit, so
they had no data by which to calculate a score for me. Therefore AT&T
completely refused to do business with me.

It's crazy how much power these institutions have over your life. That this
company was able to ruin her credit for posting a negative review is a _huge_
deal. If they're not penalized for this, then this will set a terrible
precedent.

~~~
harshreality
Credit score (and stable credit history, utilization, limits) determines your
quality of life when your quality of life involves post-paid credit-based
services. And whether and on what terms you can get a car loan or home
mortgage or margin on an investment account.

If that's surprising I don't know what you're thinking.

I'm surprised though that AT&T didn't let you post a security deposit in lieu
of good credit.

------
x0054
It is my understanding that the company has actually sold the fraudulent
$3,500 debt to a debt collector. The woman in this case has an excellent
defamation case against the companies and a claim for treble damages (I
believe) and attorney fees under FDCPA. She should contact an attorney and
file a claim against this company. Between that damages and attorney fees,
they may be looking at a $50-80k bill at the end of this all, plus the bad
publicity. And I hope they are made to pay, because this is outrageous.

------
300bps
They reported her refusal to pay the $3,500 "fine" to the credit bureaus. A
common way of dealing with such a thing is to file a small claims suit for the
maximum amount in your jurisdiction for defamation. For example, in my
jurisdiction the maximum is $8,000. The fact they are saying negative things
about her is undisputed since it is in black and white on her credit report.
So the next thing is for them to prove that the negative things they are
saying are true. They won't be able to prove their one-sided contract that
never offered consideration is valid. Then they'll move on to damages and she
states in the article she was repeatedly denied credit and offered credit at
less favorable terms.

This little stunt of theirs should cost them a lot of money.

------
freshhawk
"In an effort to ensure fair and honest public feedback ... this sales
contract prohibits you from taking any action that negatively impacts
KlearGear.com"

That's some great doublespeak right there.

------
crazygringo
New: over the past couple of hours, the woman herself has posted a number of
comments on Reddit clarifying:

[http://www.reddit.com/user/kaett](http://www.reddit.com/user/kaett)

------
guyht
Reviews are a tough spot. On the one hand, reviews can be very damaging to
businesses, so it is important that some measures are in place to ensure that
the review is honest and genuine, and on the other hand its important that
consumers can openly review a product/company without being scared of
reprisals.

Clearly, in this case, KlearGear are in the wrong, but I also think that there
are cases where legitimate businesses have been seriously damaged by
competitors, or just difficult customers writing unfair bad reviews.

Unfortunately the only solution to this I can think of would be a review of
reviewers, which would just confound the problem.

~~~
throwaway420
> I also think that there are cases where legitimate businesses have been
> seriously damaged by competitors, or just difficult customers writing unfair
> bad reviews.

This is a big problem for small businesses and people alike, but the actual
solution to this is the opposite of what most people's first instincts would
be. Ironically, it's the existence of laws against libel/slander that makes
fake reviews and false negative content online such a big deal for people
going forward.

Because these laws exist, people are conditioned to believe that most of what
they read online is true because otherwise legal action would be taken and it
would get removed. But few people and small companies have the resources to
track down every false review or fake negative comment and find out who did it
and make legal challenges.

If you're an average small business, you don't have an easy way to mount a
serious challenge against a site like RipOffReport when an unknown competitor
starts writing nasty fake reviews about you online that you never shipped a
product or whatever. If you're an average person, you have very little
recourse if somebody goes and falsely writes that you have an STD on a site
like Dirtyphonebook or whatever. People and companies with large amounts of
resources are protected by libel/slander laws, but the average person or small
company isn't really.

In a society with no laws against libel and slander, people would be a lot
more skeptical about the veracity of negative comments that they see online
and do a lot more research before buying a product or believing some negative
comment was false.

We can talk a lot about better reviews and reviews of reviews but all of these
are susceptible to the same issues.

~~~
maxerickson
My instinct is that online reviews are wildly unreliable and suspect. I
certainly don't think they enjoy any sort of legal oversight.

I will take a large plurality as reliable, and someone able to write in the
correct tone could certainly mislead me (that is, I will look at an individual
review on its apparent merits), but I sure don't expect a couple of good or
bad reviews to mean anything.

Also, the encyclopedia I ordered did not contain any murder mysteries, one
star because I can't put no stars.

------
tzs
The title should be changed to match the title at the site, which is "New From
KlearGear: Free Speech, Only $3,500 Plus Shipping And Handling".

Their ridiculous non-disparagement clause purports to apply to all forms of
communication (or perhaps to all forms of communication that are "published",
depending on how you read the thing). In this particular case, they are trying
to enforce it against an online review, but that's an irrelevant detail. The
title here emphasizes that irrelevant detail too much.

------
antonius
As this picks up more media attention, the total number of customers that this
will deter will greatly offset the $3,500 fine the company may end up
receiving. Karma will prevail.

~~~
greenyoda
Also, having to hire a lawyer to defend themselves against criminal fraud
charges will cost them a lot more than $3500.

~~~
bhartzer
Where did they come up with the amount of $3500?

~~~
jrs235
Probably just an amount they thought was high enough to scare most people yet
low enough that if they tried this stunt an amount people they thought might
actually possibly pay just to make the harassment go away quickly.

------
kbenson
Isn't there yet _another_ way the contract is invalid (since they go through a
few already)? It's stated in the article that the customer never received the
item they paid for. Isn't the contract contingent on both parties following
through (the customer paying, the business delivering paid for service or
goods)?

~~~
incongruity
Also, according to one of the original news reports, the _husband_ ordered and
(supposedly/arguably) agreed to the terms - but it was his wife who posted the
review. She never agreed to the terms and thus cannot be bound by them.

------
pan69
Just because you put a bunch of crap in your T&C's doesn't make it law and
legal regardless whether or not someone agrees to it or not.

------
NonEUCitizen
How about finding out which lawyer wrote that TOS and getting him/her
disbarred?

