When the Palmers wouldn’t pay, KlearGear reported the supposed “debt” to the credit agencies, and has refused to remove it. More than a year later – after the Palmers have been turned down for credit, had their car loan delayed, and worst of all went without heat in their home for three cold weeks this fall after their furnace broke and the Palmers couldn’t get a loan to pay for a new one – this phony debt still mars John Palmer’s credit. Now they are hoping to move, but this debt is a continuing obstacle to selling their home and buying a new one.
Public Citizen is representing Jen and John Palmer in seeking redress from KlearGear. Today, we sent this demand letter seeking three actions from KlearGear: first, clearing up John's credit; second, paying $75,000 in compensation for the Palmers' ordeal, which has lasted more than a year; and third, agreeing to stop using this non-disparagement clause to extort money from their customers.
KlearGear's conduct is part of a troubling trend of businesses trying to deter negative reviews by muzzling their customers. Another example is Public Citizen's case against a New York dentist who tried to make her patients agree, as a condition of treatment, that they would not criticize her. And TechDirt has reported about the use of such a clause in vacation rental agreements.
As our letter explains, KlearGear's actions violate state tort law and the federal Fair Credit Reporting Act. If KlearGear refuses to comply, we'll file suit to enforce the Palmers' rights and send a message to unscrupulous corporations that they cannot muzzle their customers, extort money from them when they post critical reviews, or ruin their credit when they refuse outragous demands for payment.