Law Will Prevent Punishment for Bad Reviews

The state of California has passed a law that looks to avoid businesses from seeking to punish customers financially for a poor review online. The law is seemingly a response to several high profile cases wherein businesses, upset by the recent weight put on customer feedback online, tried to fight back.

Earlier this year, a hipster guest house within the Catskills made headlines over such a difficulty. A supposed policy charged guests $500 for leaving negative online reviews about their experiences on the establishment. The Union Street Guest House near Hudson, N.Y. allegedly went as far as to take a look at to fine wedding parties if anyone of their group posted a negative review while they were staying on the guest house.

The policy in question later mysteriously vanished from the guest house’s website. The removal appeared to coincide with negative coverage of the policy peaking in August. The guest house’s management eventually insisted the entire thing were a foul joke. In addition they claimed no fine had ever been levied against anyone. But few customers were laughing.

In a potentially weirder case, an eCommerce site called KlearGear allegedly tried to bill a Utah couple $3,500 . The explanation was a negative comment that they had posted concerning the company’s customer support. The couple claimed the corporate then tried to ruin their credit in addition.  KlearGear allegedly claimed the couple was in violation of a “non-disparagement” clause within the terms of service of its website. However, a federal judge disagreed.

Hopefully, most small business owners nowadays know better than to attempt to unravel customer support problems this fashion. For people who don’t, the hot California law makes things pretty clear.

California Assembly Bill 2365 updates the state’s rules on unlawful contracts explaining :

“This bill would prohibit a freelance or proposed contract for the sale or lease of consumer goods or services from including a provision waiving the consumer’s right to make any statement in regards to the seller or lessor or its employees or agents, or in regards to the goods or services.”

Once in place, the hot law would authorize the state Attorney General, a district attorney or city attorney to bring suit against any business that tried to violate the law. A business may be present in violation for either trying to place language limiting a customer’s speech right into a contract or for threatening customers over a negative review.

A business owner will be fined $2,500 for a primary offense and $5,000 for every follow-up. A $10,000 fine will be possible whether it is determined the violation is “intentional.”

Some might argue the hot law and those who will doubtless follow open small businesses to fraudulent claims besides. However the real lesson is probably just to be certain that your corporation is handling feedback correctly.

The new law is anticipated to enter effect in California by 2015.

Complaint Photo via Shutterstock

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