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Woman Fined For Bad Review Striking Back In Court 249

Posted by Soulskill
from the jury-to-be-fined-for-unfavorable-verdict dept.
An anonymous reader writes "Here's an update to the earlier Slashdot story about KlearGear.com 'fining' a couple for a bad review left four years earlier on RipoffReport: Not only did KlearGear report this as a bad debt to credit reporting agencies, but KlearGear is hiding behind a DomainsByProxy domain name to making finding their real identities harder. Now Public Citizen is representing the couple and is going after KlearGear for $75,000. The TV station that broke this story, KUTV, now reports that RipoffReport will likely be on the couple's side. The BBB and TRUSTe say their logos were used by KlearGear.com without permission, and credit reporting agency Experian is also investigating."
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Woman Fined For Bad Review Striking Back In Court

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  • Good (Score:5, Interesting)

    by jason777 (557591) on Friday November 29, 2013 @06:10PM (#45557921)
    I hope they put them out of business. What a scumbag company.
    • Fret not (Score:5, Funny)

      by smitty_one_each (243267) * on Friday November 29, 2013 @06:13PM (#45557937) Homepage Journal
      All of the company staff will get IRS jobs. They've shown the proper mindset.
      • They'll just pop up again somewhere else like bad mushrooms.

      • Re:Fret not (Score:5, Insightful)

        by DavidClarkeHR (2769805) <david DOT clarke AT hrgeneralist DOT ca> on Friday November 29, 2013 @06:36PM (#45558053)

        All of the company staff will get IRS jobs. They've shown the proper mindset.

        IRS? Nah. Wall street. We never did fix those problems.

    • Re:Good (Score:5, Insightful)

      by FlyHelicopters (1540845) on Friday November 29, 2013 @06:30PM (#45558015)
      I don't normally wish doom to a private company, but in this case...

      Yea, based on the facts as offered, they can go rot...

    • I find it interesting that they're already blocked by the proxy server where I work... but, nice.

      Your request was denied because of its content categorization: "Business/Economy;Suspicious"
      GET "http://www.kleargear.com/"

      • Re:Good (Score:5, Informative)

        by jonfr (888673) on Friday November 29, 2013 @09:32PM (#45558765) Homepage

        They say on the front page that they are experiencing unexpected and sharp increase in volumes of orders. That means they are delaying all shipping for 48 business hours. Since working hours are around 8 hours normally, this means 6 days delay at least on shipping when people order from this website. But that is something they should not do, since it is unlikely they are going to get what they did order.

        They are also faking reviews and other such things. Claim and information on the fake reviews can be found in the comment on the site I am linking to.

        Details: http://www.sitejabber.com/reviews/www.kleargear.com [sitejabber.com]

        • Re: (Score:2, Interesting)

          by Anonymous Coward

          There's probably a good chance that they are planning to go out of business in the next few weeks. Take money from people, ship out whatever you don't think you can sell to others, sell whatever product you have on hand to others for cash, then sweep everything out of the company coffers and let the company get sued into oblivion.

          Since the company doesn't own anything, you can't squeeze blood from a turnip.

          The people who own this company might be evil but their not dumb.

        • I'd certainly find it difficult to imagine Kleargear would see an upsurge in orders. Google results for Kleargear are overwhelmingly negative, and they're swiftly picking up poor reviews in WOT and similar site ranking tools.

          The 48 business hour delay is odd. In addition to this, their order status site is down.

          http://www.kleargear.com/orderstatus.html [kleargear.com]

          The order status page is now directing customers to their "Kleargear Customer Care Centre" which is this:

          https://kleargear.zendesk.com/home [zendesk.com]

          It's a "knowledge b

    • Re:Good (Score:5, Interesting)

      by linuxrocks123 (905424) on Friday November 29, 2013 @09:13PM (#45558705) Homepage Journal

      Question for anyone who knows: how the hell did KlearGear report a debt to a credit reporting agency in the first place? The credit reports are indexed by SSN, and they only have other identifiers like credit card numbers to go by if you don't have that. They paid by PayPal. Doesn't PayPal hide your credit card number from the merchant? With just a name, how did they report it? Does anyone know?

      • Re:Good (Score:5, Informative)

        by tysonedwards (969693) on Friday November 29, 2013 @11:21PM (#45559139)
        Easy... They had the person's full name and address, probably more relevant contact information.

        Think of it this way... a call to Equifax, Experian or Transunion to submit a complaint saying "This person placed a very large order with us, but then reversed payment after the fact. Here is their name, address, phone number, email, dog's middle name, ..."
  • Waiver of rights (Score:5, Insightful)

    by Anonymous Coward on Friday November 29, 2013 @06:23PM (#45557977)

    The main claim is that the puchase was a contract that imposed the condition of "never acting to harm KlearGear". That could encompass pretty much anything you do. Did you consume a resource that resulted in higher costs to them, did you loan the item to a friend and the friend did not like it. So many accidental ways to breach the "contract"

    We the people need the right of fair dealing. We can't have weird contractual conditions imposed. I am not a lawyer so don't know how to put it.
    Normal actions, including criticism should not result in violations.

    • Re: (Score:3, Insightful)

      by arbiter1 (1204146)
      that "never acting to harm KlearGear" clause is not legally binding IMO. Since in this case it violated her first amendment right to say that she had bad service from KlearGear. For them to say in a contract she couldn't do that is complete BS. as for suring for 75grand, i would sued for a lot more then that.
      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Unless KlearGear is run by either the Federal or a state government, how can they be violating the First Amendment?

        • Re:Waiver of rights (Score:5, Informative)

          by Zeinfeld (263942) on Saturday November 30, 2013 @10:12AM (#45560697) Homepage

          The contract clause is unenforceable for multiple reasons. The first amendment has a bearing on one of them.

          First there is no contract, The goods were never delivered, KlearGear failed to perform its obligation, there was never an exchange of a consideration. Therefore no contract.

          Second, the original agreement was with the husband, the comments were made by the wife.

          Third, the contract terms were added after the original agreement as is demonstrated by the Way Back Machine archives

          Fourth, even if there had been a contract it would be a contract of adhesion. The seller defines the terms and the buyer has a weak negotiating position. In such cases civilized jurisdictions (i.e. not necessarily a corrupt jurisdiction) generally strike out clauses that are surprising or contrary to normal practice absent clear proof that the buyer was aware the term existed. A line of text in a fifty page contract in 6pt type is not normally enforceable.

          Fifth, the term in question was unconscionable which means that it offends the basic principles of commerce and/or society. Constitutional precedent and in particular the first amendment is frequently used to establish that a clause is 'unconscionable'. Kleargear is not 'violating' the first amendment but the courts are not going to enforce a contract term whose purpose is to take away constitutionally protected rights.

          Sixth, even if all the above were not so, the claim for $3,500 is a liquidated damages clause and thus invalid. As a matter of public policy, corporations are not allowed to set fines.

          Seventh, the amount was clearly in dispute. Thus the reporting to Experian was in breach of the fair credit reporting act.

          I am sure that there are weaker claims out there, but I can't think of one offhand.

          • Re:Waiver of rights (Score:4, Informative)

            by Zeinfeld (263942) on Saturday November 30, 2013 @10:40AM (#45560831) Homepage

            Oh and there is an eight:

            The claim to be rated by the better business bureau has been shown to be false. KlearGear makes several such claims that have been shown to be false for the purpose of gaining business. That meets the legal definition of fraud. In addition to creating the possibility of criminal sanctions, fraud voids a contract.

      • by BronsCon (927697)
        Even moreso, my understanding is that the transaction, upon which the contract was reliant, was cancelled by KlearGear, which would render the contract null and void, would it not?
        • Re:Waiver of rights (Score:5, Interesting)

          by Anonymous Coward on Friday November 29, 2013 @07:12PM (#45558217)

          I seem to recall it beeing seedier than even that.

          IIRC, at the time the transaction was said to take place, KlearGear had not yet even PENNED that clause in their contract, and as such any such term was never a term even presented to the customer at the time of said transaction.

          In the venerable wors of Darth Vader: "I am altering the deal, pray I don't alter it further."

          Essentially KlearGear is claiming a breach of contract that was never even presented to the customer, as grounds for their dickishness.

          If true, the woman's lawyers are going to can their spammy asses.

          • Re:Waiver of rights (Score:5, Interesting)

            by mysidia (191772) on Friday November 29, 2013 @08:11PM (#45558463)

            IIRC, at the time the transaction was said to take place, KlearGear had not yet even PENNED that clause in their contract, and as such any such term was never a term even presented to the customer at the time of said transaction.

            That is even worse for KlearGear; as it changes the violation from harassment, FCRA violations (for reporting a false loan, from which no goods or services were exchanged) and FCBA violations --- into fraud.

            Changing your "terms" after the fact, and pretending as if your new terms apply to a previous sale, so you can extort your customer, is fraud.

            • Re:Waiver of rights (Score:5, Informative)

              by Mr. Shotgun (832121) on Saturday November 30, 2013 @04:41AM (#45560019)
              Oh it gets even better than that, the husband was the one placing the order. Meaning Kleargear is trying to assert a contract that was never fulfilled ( never delivered the product) using a term that was not present at the time of signing (Non-disparagement was added after) based on the actions of the wife, who didn't agree to anything. IANAL, but I am pretty sure that is against the law, fraud being at least one.
              • by mysidia (191772) on Saturday November 30, 2013 @12:22PM (#45561473)

                based on the actions of the wife, who didn't agree to anything.

                Ah.... that is indeed another wrinkle. Marriage does not give a spouse the ability to legally sign and bind the other spouse to contracts. Utah is not even a community property state. Therefore, any value from the Kleargear contract would be separate property --- the wife would not be party to the agreement, and would have received no consideration from it. The husband is legally unable to bind the actions of the wife.

                Clearly, they would have known that the order was not placed by the reviewer, by examining the contents of the order form. The fact that Kleargear chose not to, can only be attributed to an attempt to maintain a false pretense (deception); for the purpose of damaging another individual, by impeding their rights, and/or eliciting financial gain ("defrauding the husband out of $3500").

                Read: 18 U.S.C. 1343 Wire fraud [cornell.edu]

                Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

      • by tgd (2822)

        First amendment is about what the government can't restrict you.fromdoing, not anyone else.

        • by mysidia (191772) on Friday November 29, 2013 @08:13PM (#45558465)

          First amendment is about what the government can't restrict you fromdoing, not anyone else.

          The government includes the courts, and all the laws passed by the federal government and state legislatures ---- including contract law.

          No contract that purports to accomplish something, that is illegal or outside the government's power in the first place, has the force of law.

        • by jonbryce (703250)

          This company is asking the government, in the form of the courts, to stop someone from saying bad things about them. If the court were to grant this request, it would violate the 1st amendment, therefore it can't grant this request.

      • Re:Waiver of rights (Score:5, Interesting)

        by meerling (1487879) on Friday November 29, 2013 @08:16PM (#45558475)
        Courts have already declared that those kinds of 'agreements' (this includes EULAs) can not remove rights, no matter what the agreement says.
        They're allowed to talk about it, and in a negative fashion, so long as they stick to facts and their opinions. (NDAs are a bit different.)
        For that matter, the clause saying you can't badmouth them apparently didn't exist at the time those people interacted with that company. So the company is trying to retroactively change the agreement, which is illegal.
        The threats the company sent, sure look like blackmail, or at least some form of illegal attempt to influence imo. (ianal)
        Don't forget that the company never delivered the contracted goods, so the contract was invalidated by them for failure to fulfill the contract. Heck, even the credit card company agreed to that and revoked payment.
        That company also used the logos of the Better Business Bureau and TRUSTe improperly, without permission, and I believe, illegally. I know of know other reason to fake having endorsement by such "trust" organizations as those for any reason other than to run a con. Add that with the companies attempts at avoiding contact and keep as many details secret as they can, and you really have to wonder about their motives. In my case, it's more of a just how extensive and widespread their guilty actions are rather than a more common question of their guilt.

        By the way, if that company were to legally prevail, it would be a horrible precedent. It would probably by about 3 seconds before most companies had the same kind of B.S. 'agreements' employed. You wouldn't be able to say or do anything bad about any company lest you be 'charged' a huge penalty. You probably couldn't even recommend a competitors product or store to a friend, since that would be an action that negatively affects a company. And when it comes to abusing laws, it's it's not a matter of if, it's only a matter of when.
      • Re:Waiver of rights (Score:5, Interesting)

        by Solandri (704621) on Friday November 29, 2013 @08:49PM (#45558617)
        Contracts restrict the first amendment right to free speech (which only applies to the government) all the time. A non-disclosure agreement is a perfect example.

        The problem in this case is that KlearGear failed to fulfil their part of the contract (didn't deliver the goods), but then are trying to say the other party is still bound by the contract terms. You cannot hold the other party accountable to a contract while you willfully ignore it. There is no longer a valid contract because KlearGear broke it. The negative reviews are basically the woman saying KlearGear broke the contract.
      • by Pinhedd (1661735)

        The first amendment has nothing to do with this. It simply prevents the government from creating any law which abridges the freedom of speech. The freedom to speak about certain matters is something that the government cannot take away from you without a damn good reason, however the freedom to speak about certain matters is something that individuals can sign away on their own.

        Non disclosure agreements are incredibly common contracts in the business world that in effect are in effect unilateral or bilatera

        • by eWarz (610883)
          both myself and the courts would beg to differ. While it's true that the Constitution of the United States DOES only cover government, it also covers cases of abuse by corporations. Remember that the court system itself IS an arm of the government...
      • that "never acting to harm KlearGear" clause is not legally binding IMO. Since in this case it violated her first amendment right to say that she had bad service from KlearGear. For them to say in a contract she couldn't do that is complete BS. as for suring for 75grand, i would sued for a lot more then that.

        Bad but correct reviews are not harmful. To the contrary, they force the company to improve their products and services, which can only improve their profits in the long term.

    • by cirby (2599)

      The problem with that line of attack is... KlearGear apparently added that part after this all happened.

      No, you can't take action against someone for a "contract" you put up after you did something wrong. They also deleted the web page with the "contract" after someone pointed that out.

      Not to mention that KlearGear never actually sent the items in question, and PayPal cancelled the purchase automatically.

      • by russotto (537200) on Friday November 29, 2013 @06:53PM (#45558145) Journal

        Yeah, the "fine" fails on so many levels. A contract term added after the formation of the contract, enforced based on a contract that KlearGear breached (by not delivering), enforced on someone who was not the contracting party (the person posting the review was not the person who made the purchase), and unconscionable to boot.

        Based on all this and my knowledge of the integrity of the legal system, my bet is the Palmers will lose their suit and KlearGear's fine will be upheld, with the Palmers paying KlearGear's attorney fees.

    • by mysidia (191772)

      We the people need the right of fair dealing. We can't have weird contractual conditions imposed. I am not a lawyer so don't know how to put it.

      My understanding is: while the buyer placed an order and paid: the retailer never delivered their order. Therefore, the order was unfulfilled, AND, there was not completion of the "contract" as agreed; therefore, if true, then there was no contract, or the retailer was in breach, because:

      Certain elements must be met for a contract to exist:

      • An offer
      • Acceptanc
      • by Kjella (173770)

        Playing the devil's advocate here, I'd see many situations where it'd be reasonable to ask that the details be kept secret even if the transaction is not completed, for example if you're negotiating a buyout under an NDA. What if you're negotiating the sale of the entire inventory? A big part of it? A small part of it? A single item? I can sort of understand companies that want to say we want this resolved by the terms of the agreement and in court if necessary, but you can't try to publicly blackmail us by

      • by nomadic (141991)
        Ehh, sort of. A contract certainly existed because the consideration was memorialized in the order form, any email receipt, etc. There was just a breach.
  • As with some EULA tied to software than can have stuff it in that says if you don't follow our rules then you are licensed to use this site.

    Now under the unauthorized access to a computer network law that can make it an felony.

    also the ACTA / TPP can set the bar real low as well.

    • by ledow (319597) on Friday November 29, 2013 @06:40PM (#45558071) Homepage

      Nothing trumps basic consumer law and contract fairness.

      Too many people forget this.

      The EULA's can say what they like. If it's deemed unreasonable, especially if it's one-sided, courts will just ignore those portions of it.

      I think commenting your own opinion on a product/service you used can't really ever be deemed unreasonable until it becomes harassment, and that's relatively easy to determine and prose cute for.

      Fact is, all this company have done is said they'll sue their own customers unless they never have a problem and/or never tell anyone about it. It's a perfect way to lose customers.

      They can claim anything they like, but that doesn't mean that a court will back them - especially not when they breached the contract themselves first (thus making all the other party's obligations under that contract null and void).

      Just because someone says "But you signed/agreed to this", it doesn't mean that you are bound by it. It's a complete fallacy. It just means that you have to prove it's unreasonable rather than, in the case of not signing it, do nothing.

      There was a lot of cases about whether automatic "if you park here, you are agreeing to pay a £100 'fine'" signs put up by private landowners. Loads of people ignored them and paid fines. And then courts said that it was unreasonable and not legal. And now those landowners are having to pay all that money (and expenses) back.

      A contract has to be fair and reasonable, or it's not a contract at all. And yet you can still be held by your side of the contract (e.g. providing the damn service you were required to) while having all your provisos (e.g. NDA's or termination clauses) rendered void. It all depends on the balance of contract law.

      But, honestly, don't agree to such things in the first place (this person says they didn't, for instance), and don't let people get away with such things when they can't keep their own side of the agreement.

      • by Nerdfest (867930) on Friday November 29, 2013 @06:47PM (#45558123)

        Well, it used to be that nothing trumped the Constitution, but that seems to have changed too.

      • by mysidia (191772)

        The EULA's can say what they like. If it's deemed unreasonable, especially if it's one-sided, courts will just ignore those portions of it.

        It's true, but the EULAs also typically require binding arbitration, and preclude class actions ---- the courts tend to respect those terms.

        Also; the arbitrators used to conduct the binding arbitration, tend to be more sympathetic to the business than to the consumer.

        While consumer law may always win in theory ----- it becomes more muddled, when the big co

      • by Arker (91948)

        There are a lot of protections built into contract law here.

        Unfortunately they all seem to be ignored lately. No way is a EULA a valid contract on its face, yet courts have enforced them nonetheless.

  • Not that many people check or even know what it is, but why would any sane person give money to a website who uses domainbyproxy?

  • in the case, it seems to me, is that they never delivered on their end of the sale, yet still seek to enforce the other side of the contract.

    Of course, it's a BS, should-be-unenforceable clause of the contract that may not have even been in the contract at the time. The above seems like the easiest way to win the case, but hopefully Public Citizen can get some precedent set for it as unenforceable.

  • asdf (Score:5, Informative)

    by BradMajors (995624) on Friday November 29, 2013 @08:18PM (#45558489)

    "KlearGear is hiding behind a DomainsByProxy domain name to making finding their real identities harder.

    KlearGear.com Legal Department
    2939 Wilson Ave SW
    Grandville, MI 49418-3502
    Phone (866) 598-4296

    • by Anonymous Coward on Saturday November 30, 2013 @12:48AM (#45559427)

      The Kleargear.com address at 2885 Sanford Ave. SW in Grandville MI is really a mail forwarding/disguised address popular with companies doing horrible things to people, and is run by a company called Mailbox Forwarding, Inc.: The mail-forwarding service is not unfamiliar to the BBB. “Over the years, we’ve had many issues with businesses that use that address” [mlive.com]

      Here's another address for them, thanks to this press release through United Business Media's PRNewswire [prnewswire.com]. If they try to retract it, here's a copy at The Sacramento Bee [sacbee.com]:

      Christophe Monette, CEO of Kleargear parent Descoteaux Boutiques, has been pleasantly surprised...

      Margaux Banet
      2885 Sanford Ave SW #19886
      Grandville, MI 49418
      United States

      Descoteaux Boutiques
      ZAC Paris Rive Gauche
      118-122 Avenue de France
      75013 Paris
      France

      And this press release also says "Kleargear is donating 2% of net sales between November 17th and December 17th to The American Red Cross in support of our friends and neighbors affected by Sunday's devastating tornado outbreak across the Midwest." Who wants to bet any of their money gets to anyone who's ever seen a tornado? Best to check on the legitimacy of these charity solicitations of course. Michigan Attorney General Bill Schuette has been making charity fraudsters one of this pet projects lately: See "A Michigan Crackdown On Charity Fraud" [blogspot.com]. I'll bet Schuette's office would be more than happy to hear about any problems from companies that happen to officially give their state of residence as Michigan and claim to help Michigan tornado victims. The Michigan Attorney General has a specific phone number for Questions About Charities [michigan.gov].

      Of course, maybe the French address is fake too. They're a bit pickier about that in France though, I think. Anyone have the contact info for the corporation regulators or charity regulators in Paris?

      Also: The BBB gave Kleargear.com an F rating, [bbb.org] before Kleargear.com inserted this ruin-your-customers-lives clause in their terms and then faked the A+ rating on their website. For those of you who can't see popups on the BBB site: As of November 28, 2012, the BBB became aware that the company's website is displaying a BBB Accredited Business logo and BBB Rating A+; however, the company is not a BBB accredited business and the BBB rating is not A+. The BBB contacted the company regarding these issues and this matter is pending the company's response. As of November 28, 2012, the BBB discovered that some pages of the company's website display the BBB Accredited Business Logo and state "BBB Rating A+", when neither is true. The BBB contacted the company at the Michigan mail drop address instructing the company to immediately remove the incorrect BBB logo and reference from their site. This matter is currently pending.

  • Any publicity is good publicity! we're talking about the drink, right? oh crap.
  • gets replaced.

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