How one bad @Yelp review completely wrecked a couple's credit score via @ChrisGayomali via @AlexGoldmark @NewTechCity

How One Brutal Online Review Wrecked A Couple's Credit

WNYC's New Tech City takes a close look at the curious case of KlearGear vs. The Palmers.

Sticks and stones might break some bones, but a few hundred-word Yelp reviews could deal some serious damage to a small business's reputation.

Sometimes the results make for can't-miss entertainment. (See: What Reddit-abetted Yelpers did to Amy's Baking Company after a particularly brutal episode of Gordon Ramsay's Kitchen Nightmares.) On the other hand, some Yelp reviewers feel like they should be paid—seriously!—for their contributions.

Then there's the frightening and very real possibility that a thoughtless post on something like Yelp can land a reviewer in a thorny legal nightmare they never saw coming. WNYC's New Tech City aired a fascinating show this week that takes a close look at some of the ways navigating the Wild West of online reviews can land both the reviewer and reviewee in hot water.

The story kicks off with what by all appearances seems to be a shady online business called KlearGear. Here's the episode:

You might have heard of KlearGear before. If you haven't, the case involves a woman named Jen Palmer and her husband, John. In 2008, Jen purchased a few small tchotchkes—things like a smiley-faced keychain—from When she didn't receive them, she left what she described as a "scathing" review online, calling KlearGear "at best completely irresponsible and unacceptable, at worst pure fabrication and a thinly-veiled attempt to cover your own ineptitude." Yeouch.

This is where things get interesting. KlearGear claims it had hidden a non-disparagement clause in its terms of service, and since Palmer used the site to purchase stuff, she had implicitly agreed to it. (It's eventually revealed that the clause was added to the terms of service long after Palmer hit the buy button.)

Long story short, KlearGear asked that Jen take the review down. She refused. Palmer and her husband were then charged a $3,500 fine by the business, which the couple refused to pay. Ninety days later, KlearGear treated the fine as an unpaid bill, wrecking the Palmers's credit, leaving them unable to pay their heating bill. As New Tech City producer Alex Goldmark tells Fast Company, "That's not something most unsatisfied customers will be willing to go through to defend one review."

The KlearGear case highlights one of the fundamental tensions currently plaguing today's reputation economy. On the one hand, you have honest reviewers who should not feel hesitant to say what they think about a business. On the other—as New Tech City highlights later on in the episode—Yelp has to do what it can to protect honest businesses from trolls and dishonest reviews, without infringing on a reviewer's right to free speech. After all, Yelp obviously wants—and needs—users to contribute reviews of local businesses in order to thrive.

It is all very messy. Compounding the situation is the fact that our current laws are still catching up to the current state of technology. "There's a sense from users of sites like Yelp that the sites would be improved if they could weed out the bad comments before it gets to this level," says Goldmark. "Clearly Yelp can't be expected to personally validate every comment with a human fact checker, but there can be some auto-checks, like if an IP address uploads multiple bad comments about a single business, or if one person only posts one-star reviews, maybe that commenter should be hidden."

In the end, it's in the best interest of a service provider like Yelp to figure out where that line should be drawn, or if it should be drawn at all. "The more they can do to make the reviews trustworthy, the more people will rely on their site, and the more business Yelp will get," adds Goldmark.

You can listen to the series on WNYC over here.

[Image: Screenshot]

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  • You use an example of FRAUD by a company against a dissatisfied customer as a reason to not speak out against companies. You should use it as an opportunity to discuss the use of credit as a means of attacking consumers and that there is no open, available recourse for those being abused by these practices. Yes, bad reviews can hurt companies, but bad reviews are just reviews and people make up their minds with other information. And Amy's Baking Company are horrible people.

  • I find this article rather odd. The onus was never on Yelp, and no litigation, penalty, or legal proceeding on record reflects that it was. The review was aimed at KlearGear, and KlearGear sought to penalize the Palmers. Though Mr. Gayomali may have wished the point of his article to be a caution for the Yelps of the world to protect themselves, doing so at the expense of the full truth of the narrative he presented does not make good journalism. The denouement was that the Palmers sued, and with the help of the public (whose outcry was huge) and a citizens' advocacy group's counsel, they won court cases clearing their name, their meritless debt, and judged for payment from KlearGear. Alas, KlearGear management made themselves scarce, not appearing for the proceedings, and have not paid any of THEIR penalty, though richly deserved. In a legal sense, they are in hiding. The insult to this injury is that is still up and running, their faulty TOS clause again in place.

  • Robert Brunetta

    Businesses need to protect their brand, huge money is spent building a brand and no one should be able to damage that brand through on line slander, no different than copy write infringement, no one should be able to replicate that businesses name anywhere without the express permission of the owner of that brand, why is it that anyone can take someone's hard work and damage it though on line slander without accountability?? I agree with punishing those that defame and damage another persons hard work and efforts, and if you were in the position where you put your hard work and money into something then have someone else rear it down from behind a keyboard you would definitely agree, those who don't agree almost always have never been subjected to this which hunt of an injustice. The review system needs a code of conduct and governing laws.

  • Jason Gerard Clauss

    Long term solution: The law needs to make clear that stupid clauses are completely unenforceable and that fraudulent bills will be treated equally to grand larceny, meaning the owners of the company will go to jail and get butt-raped by Bubba.

    Short term solution: The Palmers should find out he personal information of Klear Gear owners, and send it on over to Anonymous.

  • Jamil Voss

    It's just one review. As someone who reads reviews, I am aware that people lie or exaggerate and one learns to detect when people are doing that. It's unfortunate that the review site did not have a reply to review option -- eBay does that with a good effect. I feel something was left out of this story.

  • Brandon Reeves

    Why is there no commentary or quote in the story regarding the poor behavior or lack of responsibility on the part of the companies at the core of these "questionable" comments and feedback? KlearGear might not have had to take this odd step (clearly, a pre-meditated act on their part that they were waiting to inflict on a reviewer I feel) of defending itself. Defense in this case may be a misnomer. Companies with a commitment to quality of service and unquestionable intent of superior customer care don't have to take such extreme measures. Hacks, thieves, and fly-by-night operations are the breeding ground for illicit and litigious behavior exhibited by KlearGear. No mention was made of the fact if they did or did not ship the product ordered by Jen Palmer. This lends an unnecessary slant to what should be an unbiased piece on a problem that has long existed in business/consumer relations, long before the rise of the internet. Reputation management is not new, only intensified.

  • Adam Tenhouse

    Someone levies a BILL -- not a lawsuit seeking damages, a BILL -- for a negative review on a couple who cannot even redact the comment, wrecking their credit, and it's "messy"? It's shooting fish in a barrel.

    It should be made clear the site they used is not Yelp and does not 'take reviews down' unless it's a clear violation of their ToS, usually "inciting racial hatred" or the like.