As online reviews become a larger part of consumers’ lives and decision-making processes, it’s no surprise that businesses are trying to take back some of the control. But suing or fining customers for posting negative reviews is not the best course of action, and Congress has proposed the Consumer Review Freedom Act to protect consumers from retribution for their negative reviews. The bill would attempt to prevent businesses from penalizing customers for sharing performance assessments and reviews. We here at Funding Gates encourage businesses to follow our suggested action plan in case they get a bad review, it. To help you stay in the know about what you legally can, and cannot do, after getting a bad review, here are the details on this new bill:
Why Do We Need This Bill?
Several high-profile cases have come to light in the past few years wherein businesses targeted customers who had posted disparaging comments, sometimes fining or suing them.
For example, John and Jen Palmer posted a negative review of Kleargear.com at the Ripoff Report for a trinket they had purchased for less than $20. When Kleargear.com fined them $3,500 for violating the site’s “anti-disparagement clause,” things got ugly. The resulting lawsuit ended, unsurprisingly, in the Palmers’ favor and resulted in a newly-passed bill protecting consumers in California.
Other examples include a hotel in New York State that deducts $500 from your security deposit for each negative review posted by your wedding party and a dentist suing her patient for $100,000 over a bad review. Yikes!
What Does the Bill Say?
The growing consensus seems to be that the best way to discourage negative reviews is to provide great customer service, excellent products, and timely response to problems. Fining or suing your customers for publicly expressing their views about your business is clearly not a way to win friends and influence people- but that doesn’t stop businesses from trying. Review sites are an increasingly important and valuable source of new customers, so some bad reviews can have quite drastic consequences for a business! The bill relates directly to a rising trend amongst nervous businesses- a review or disclosure contract.
The Consumer Review Freedom Act says that businesses do not have the right to offer contracts forcing customers to pledge that they won’t post negative reviews.
Contracts saying that customers must comply with some kind of modified non-disclosure agreement because they’re staying at your hotel, employing you to fill a cavity, or buying your products online will be strictly illegal.
The bill implies that customers could sue the offending businesses directly for breaking the law.
The bill does not, however, cover the “independent contractor” relationship. This could be a messy point of contention going forward, as long as the “independent contractor” role is not specifically outlined; some company/customer relationships could be construed as “independent contractor” relationships. Some companies use this relationship structure to their advantage, to maintain greater control over their online reputation.
For example, anyone who contributes to the invention of products at Quirky is technically an independent contractor. If that contributor reviewed another Quirky product (as a customer) negatively, the bill might not protect that customer since they are also an independent contractor for Quirky. Employees, be wary of reviewing your current or former businesses!
The Bottom Line
The current online review system might not be perfect, but it’s a useful system that provides overall value to the economy. If you want to keep your review record squeaky clean, offer the best services and products you can and hope the good reviews outweigh the bad. We have a whole “How To” for managing your online reviews on the blog!
You can also learn more from our blog section, Your Small Business’ Online Presence.