• by Wendy Davis , Staff Writer @wendyndavis, December 18, 2013

KlearGear's decision to charge customers $3,500 for negative reviews recently made the company a poster child for poor business practices. Now, that could be the least of KlearGear's problems.

Today, the company was hit with a lawsuit by John Palmer and Jennifer Kulas, a married Utah couple who say their credit was destroyed by KlearGear's attempt to collect on its bad-review fee. “KlearGear attempted to punish a dissatisfied customer for his wife’s criticism of KlearGear, then abused the credit reporting system in an attempt to extort money that the customer did not owe and could not possibly have owed,” they say in their lawsuit, filed in U.S. District Court for the Northern Division of Utah.

The couple's saga with KlearGear began in 2008, when they ordered an item that they say never arrived. Kulas then posted a negative review of the company on RipoffReport.com. More than three years later, KlearGear contacted them -- and demanded that they remove the review or pay $3,500.

KlearGear said that the review violated a non-disparagement clause in the company's terms of service.

But that clause -- which is no longer online -- reportedly wasn't part of the terms of service when Kulas wrote the review. It was present in 2012, according to the Internet Archive.

The couple didn't pay KlearGear, after which the company allegedly reported John Palmer to at least one credit agency. When he and his wife protested, the retailer not only repeated its demand for the money, but also charged the couple an additional $50 “dispute fee.”

Last month, advocacy group Public Citizen got involved in the matter. The organization sent a letter to KlearGear's representative, demanding that the company pay the couple $75,000 for allegedly filing a false report to credit agencies.

When KlearGear didn't respond, Public Citizen filed suit on behalf of Palmer and Kulas. The lawsuit accuses KlearGear of defaming the couple and violating the Fair Credit Reporting Act, among other counts.

The couple argues in its legal papers that KlearGear can't enforce a non-disparagement clause that didn't exist in 2008, when they attempted to make a purchase. They also say that KlearGear's attempt to restrict consumers' speech would be invalid even if the company had included the non-disparagement clause in its 2008 terms of service.

The complaint alleges that KlearGear's report to credit agencies that Palmer owed a $3,500 debt amounts to defamation, given that the company “knew or should have known that it was invalid.” They add that the company “acted with malice and willful intent to injure John Palmer in retaliation for his wife Jennifer’s critical review of KlearGear.”