Non-disparagement clause

cepheus

I'm surprised this is legal, surely criticism is one of the mainstays of consumer protection? Do you know of any companies which use it in the EU/UK?

A few years ago, Jen Palmer's husband ordered her some "trinkets" from US online retailer KlearGear.com. He hadn't received them after 30 days so tried to get in touch with the firm. After failing, PayPal refunded his money. His wife posted a bad review on consumer website Ripoff Report, complaining that "there is absolutely no way to get in touch with a physical human being" and accusing KlearGear of having "horrible customer service practices".

Three years later, Palmer's husband reportedly got an email from KlearGear.com demanding that the review be removed within 72 hours or they would be "fined" $3,500. The Palmers say the company's demand pointed to the terms of sale, including a non-disparagement clause preventing individuals "from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees".

The Palmers say that when they didn't pay the $3,500 "fine", the company contacted credit agencies who put a black mark against their credit score.

agrinnall

Yes, I saw it too and wondered the same thing. I suspect the stronger consumer laws in the EU would make that an unfair term, but I wouldn't be surprised if some unscrupulous companies started to get ideas from it.

jacques_chirac

I'm not sure that this would be enforceable in the US courts, I get the feeling it has not reached that stage, the retailer has chosen to rubbish their credit files instead?

whatmichaelsays

Reddit recently got hold of this story and all hell has broken lose at Kleargear.

First of all, the retailer broke the contract, so the non-disparagement clause isn't applicable. Secondly, it raises a pretty big first amendment issue.

Unfortunately, the way credit reference agencies generally work in the US is that the claimant sends the unpaid invoice to the CRA and, rather than checking that the debt is actually legitimate, the agent just thinks "hey, this guy isn't paying his debts" and amends the credit score accordingly.

Is it legal? Very probably not. Unfortunately, you have to be able to afford a lawyer to actually challenge it.... Land of the free and all that.....