Couple Fined $3,500 By KlearGear For Bad Review Fights Back

When Utah couple John and Jen Palmer didn't receive an item they ordered in late 2008 from the online retailer KlearGear, they canceled the order and Jen Palmer posted a negative review of the company on RipoffReport.com.

Four years later, the company responded by demanding that the Palmers pay the company $3,500 for allegedly violating KlearGear's terms of service. KlearGear allegedly said its terms of service included a non-disparagement clause.

The Palmers didn't pay, following which KlearGear allegedly reported John Palmer to at least one credit agency, resulting in a hit to the couple's credit rating. When the Palmers tried to contest the “debt,” KlearGear allegedly insisted that it was owed the money -- and an additional $50 “dispute fee.”

Among other consequences of KlearGear's report, the Palmers say they were denied credit to pay for a new furnace when their old one broke and denied a credit card.

This week, advocacy group Public Citizen took up the Palmers' case. The group is demanding that KlearGear pay the Palmers $75,000 for allegedly filing a false report to credit agencies. Public Citizen says the report constitutes defamation, intentional interference with economic relations and intentional infliction of emotional distress. Public Citizen also says that KlearGear's refusal to correct the information provided to credit agencies violates the federal Fair Credit Reporting Act.

Attempts by Online Media Daily to reach KlearGear were unsuccessful.

Public Citizen says in a letter to KlearGear that its terms of service in 2008 didn't include the non-disparagement clause. Techdirt reports that the clause wasn't included in KlearGear.com's terms of service until 2012.

That clause is no longer on KlearGear.com, but the Internet archive shows that the site's terms recently included the following language: “In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees.” The company goes on to add that violations result in a bill for $3,500 “for legal fees and court costs.”

Public Citizen says in its letter that even if KlearGear had included the non-disparagement clause on its site in 2008, the company still didn't have the right to report the Palmers to credit agencies. “The non-disparagement clause is substantively and procedurally unconscionable because it constitutes unfair surprise in a take-it-or-leave-it contract, and the terms themselves -- prohibiting 'any action that negatively impacts KlearGear.com [or] its reputation” -- are so one-sided in their broad, restrictive impact as to oppress an innocent party,” Public Citizen lawyer Scott Michelman writes to KlearGear.

In addition to $75,000, the Palmers are asking KlearGear to inform credit agencies that the debt was reported in error and to promise that it won't again include a non-disparagement clause in its terms of service.






5 comments about "Couple Fined $3,500 By KlearGear For Bad Review Fights Back".
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  1. Thomas Siebert from BENEVOLENT PROPAGANDA, December 2, 2013 at 9:11 a.m.

    Love to learn more about this company, its executive leadership and who was making these decisions. It's all bad and stupid, but the most insane part was thinking they could get away with a retroactive fine that wasn't even part of the original agreement! That takes a special kind of self-deluding megalomania.

  2. Khalid Low from Kerwin Communications, December 2, 2013 at 9:36 a.m.

    This is very typical with corporate America. Either they are too big to be touched by the common citizen or they have all these loop-holes to force (reporting your to credit agencies, unbreakable contracts, termination fees etc) people to pay.
    Banks, Insurance corporations, cell phone companies, etc are equivalent to third world dictators who rule with impunity.

  3. Clinton Gallagher from virtualCableTV, December 2, 2013 at 2:42 p.m.

    This is not a story about "corporate" America but some cockroaches who should have hired competent counsel -before- trying to write contract language themselves they then used to abuse our laws and push people around.

    Now with many states publishing open records laws the recorded results of the legal recourse will be made known to the general public who will forever more know the names of the cockroaches who will find it very difficult to stay in any type of business.

  4. Kelly Smith from The WebSmith Group, December 2, 2013 at 5:09 p.m.

    In a world where the consumer is king, this company committed the most egregious of errors in making claims that the customer was to live up to some sort of demand that they not defame the company, which rules were posted long after the original TOS were agreed upon in 2008.

    This is a perfect example of how NOT to treat a customer. It had better pay them the $75,000 real quick and get back on track to save the thousands of potential customers who have read about this incident. It needs to take an immediate about face and plead for forgiveness from the masses and admit they messed up and will never treat anyone like this again.

    The reality is that an incident like this can kill this company. Any business that treats customers that way will not succeed in today's world of instant communications. They have a really big black eye right now and if not corrected, will result in a knock-out punch.

  5. Jennifer Finger from KeenReader Inc., December 2, 2013 at 7:08 p.m.

    If ClearKear wants to get rid of the consequences for its bad decisions here, it should pay the Palmers the $75,000, notify the credit agencies, and lose the non-disparagement clause, and consider it getting off easy. By trying to bully their customers after not fulfilling its original contract with them, they're ultimately throwing millions of dollars back out on the table.

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