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November 18, 2013

Kleargear.com: Complain About Them, Get Dinged $3500

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:10 am

An Internet seller of novelties, gadgets, and toys found a unique way to discourage customers from writing negative reviews about the company. It threatened to bill customers $3,500 for taking any action that negatively impacted the company’s reputation or products.

Jen Palmer and her husband found out about this policy the hard way when she posted a complaint about the company online after waiting over 30 days for her order:

KlearGear story
Watch KUTV TV news video

Three years after she posted the complaint, her husband received a bill for $3,500 as a penalty for his wife having posted the complaint online, and his nonpayment of the “fine” was reported to the credit bureau.

How did the company make known to customers they could suffer these consequences for exercising their constitutional right to free, truthful speech? The provision was tucked in the “terms of use” section of the website.

*MOUSE PRINT:

KlearGear terms

The company defended its practice to the TV station, but curiously that penalty clause has now disappeared from the company’s website.

Nothing like a little media attention to an outrageous practice to bring people to their senses.

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8 Comments

  1. It’s amazingly ridiculous that a company can get away with a contract like that and hurt a person’s credit. Companies should not have more access to a person’s credit than the person has. When the “typical” person tries to make a case to credit bureaus they are “typically” ignored.

    I am curious as to how Kleargear’s Better Business Bureau record improved. Is there an expiration date on bad ratings? Did the company change its ways? Did the company successfully dispute the bad ratings to the BBB? Details are in order.

    Based on the report it seems like Kleargear retroactively applied that clause to this person’s account and interesting enough, since Kleargear never delivered the product it is unclear whether the rules of the sales contract should apply. Kleargear broke the contract first by not delivering a product.

    Comment by Wayne R — November 18, 2013 @ 7:47 am
  2. I’m curious why the couple didn’t report this to the BBB. Not that the BBB ever does anything – but complaints are publicly displayed. Kleargear would have been hard-pressed to fine the couple for a report made to a well-known business watchdog – particularly since its “F” rating seemed to hint that the company had a less-than-stellar reputation responding to consumer complaints.

    Honestly, I am no fan off the BBB (from an F to a B? That is supposed to take years) – but I’d more likely turn to the BBB than I would to Rip-off Report.

    Comment by CindyM — November 18, 2013 @ 8:47 am
  3. I would think that since the items were never delivered and the order cancelled because of non-delivery that the company actually breached the contract. Therefore, the Palmers would no longer be bound to the other terms in the contract. Of course, I’m not an attorney. That is simply my laypersons opinion.

    Comment by Tim — November 18, 2013 @ 11:25 am
  4. So they want to ensure the feedback is “fair and honest” by requiring everyone to post only positive feedback? Yeah, no thanks. I won’t patronize a company that is so insecure that they feel they need to build a SLAPP into their terms of use. It’s only libel if it’s not true.

    Comment by Patrick — November 18, 2013 @ 11:31 am
  5. A lot of companies are finding ways to make money with total disregard for the customer. This is yet another example of why you should at least scan the fine print before buying anything these days.
    And if they say it in the TOS they mean it.
    We have little control over the big companies, cable, cell phones etc. We have a lot of control over companies like this.

    Comment by Hal — November 18, 2013 @ 6:49 pm
  6. The company had the guts to try it. Now how many more years go by before a new company tries it.

    I agree with Tim. If the product was not delivered the company blew it.

    Comment by Richard Ginn — November 19, 2013 @ 11:51 am
  7. partly relevant- (1)i purchased a hp laptop and immediately had problems. I posted a lengthy reply on the hp website customer feedback section. The next day my bad review was deleted and i was sent a email from hp that my account was closed. (2) a major credit company requested my cell number for credit card fraud alerts. sounded ok until i read the fine (mouse) print agreeing that also release my cell number to third party advertising vendors. keep up the good work, mouseprint

    Comment by tom gauvin — November 19, 2013 @ 7:32 pm
  8. To: Comment by CindyM — November 18, 2013 @ 8:47 am
    I guess I was lucky enough to have some success with the BB several times, but the process is pretty painful.

    As for this $3500 charge, it seems like it’s easy enough to dispute the charge and if the company tries to “prove” that they were right, taking them to court should prove that the clause was not legal in the first place, but that’s a pretty painful way to have to keep your credit rating clean. This is where class action lawsuits would be useful since the consumer would “gain” nothing (which they never really do in class action suits) but at least we wouldn’t “lose” anything (like a good credit rating.)

    Comment by RobS — December 7, 2013 @ 8:22 pm

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