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Online retailer sued by couple it fined $3,500 over disparaging review

Posted Dec 18, 2013 4:08 PM CDT
By Mark Hansen

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An online retailer is being sued for fining a Utah couple over a negative review and damaging their credit rating when they refused to pay the fine.

The suit, which seeks at least $75,000 in damages, accuses KlearGear.com of defaming customers John and Jen Palmer and violating the federal Fair Credit Reporting Act, Business Insider reports.

"Companies like KlearGear.com that engage in abusive consumer practices need to be deterred," said Scott Michelman, a lawyer for Public Citizen, which is representing the Palmers.

The suit alleges that John Palmer bought several trinkets for his wife from the online retailer for Christmas in 2008. When the order didn't arrive, Jen Palmer tried to contact the company to find out what went wrong.

Frustrated that she couldn't reach anyone at the company by phone, Jen Palmer posted a negative review about KlearGear.com on Ripoffreport.com.

"There is absolutely no way to get in touch with a physical human being," the review said. It also accused the company of having "horrible customer service practices."

More than three years later, the suit says, the Palmers got an email from KlearGear.com demanding that the posting be removed or the couple would be fined $3,500. It cited the company's terms of sale, which it said included a non-disparagement clause prohibiting customers from taking any action that "negatively impacts" the company.

When the Palmers refused to pay the fine, the suit alleges, the company reported them to several credit bureaus, damaging the couple's creditworthiness.

Michelman says the consequences to his clients have been "quite serious." He says they have been denied credit, had loans delayed, and had to go without heat for three weeks because their furnace broke and they couldn't get a loan to buy a new one.

Business Insider could not reach anyone at KlearGear.com for comment.

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