The Consumer Review Fairness Act, recently signed into law by President Obama, prohibits non-disparagement, or “gag” clauses, in consumer contracts designed to discourage negative online reviews. Kin Cheung AP
The Consumer Review Fairness Act, recently signed into law by President Obama, prohibits non-disparagement, or “gag” clauses, in consumer contracts designed to discourage negative online reviews. Kin Cheung AP

Teresa McUsic

New federal law offers consumer protection for negative online reviews

Teresa McUsic

January 13, 2017 12:05 PM

Consumers have a new law to help protect their right to complain about a company in an online review — but advocates say it’s wise to still stay away from hateful words.

The new protection is provided in the Consumer Review Fairness Act, passed last month by Congress and signed into law by President Obama.

The law prohibits non-disparagement, or “gag” clauses, in contracts with consumers. These clauses, often overlooked by consumers, typically say that a consumer agrees to not say anything negative about their experience with the company and agrees to penalties if they do. They can also include language that gives the business copyright control over whether a review can be published.

“This is an important victory for consumers,” said George Slover, senior policy counsel for Consumers Union, in a statement. “This new law helps protect the fundamental right of consumers to make their voices heard in the marketplace and hold businesses accountable for the products and services they sell.”

The issue of a negative review came to a head locally last summer when a Plano couple was sued for up to $1 million in damages after they complained and gave a one-star review on Yelp about a Dallas pet sitting service. Prestigious Pets sued Michelle and Robert Duchouquette, claiming the contract they signed had a “non-disparagement” clause and the review and a subsequent television report resulted in a loss in business.

The couple used the Texas Anti-SLAPP statute, which allows judges to dismiss frivolous lawsuits, as a defense and a Dallas district judge threw out the case Aug. 30.

Now such clauses will be illegal, said Richard Alderman, director of the University of Houston’s Consumer Complaint Center and author of Know Your Rights: Answers to Texans’ Everyday Legal Questions.

Consumers Union and other advocates have been working for years to get this legislation passed, as online reviews became an important tool for consumers.

The 2016 consumer review survey by BrightLocal said that 84 percent of consumers trust an online review as much as a personal recommendation and 91 percent read online reviews either regularly or occasionally.

“The internet can be a powerful tool for consumers to educate each other, and this bill will help make sure the internet can live up to that promise,” Slover said.

The new law “is a great step in the right direction,” said Angie Hicks, founder of Angie’s List, an online service for finding local companies that also includes reviews. “It sends a sign to companies that this isn’t a great practice.”

Hicks testified in writing before a Senate committee in November 2015 to encourage Congress to pass a law prohibiting such clauses.

“We’ve been talking about these clauses for eight years now,” she said. “We saw a lot of it in 2009 in healthcare contracts. That went away after we talked with one company that was offering these contracts to physicians. Then we started to see it pop up in random categories of businesses.”

While the new law should eliminate such clauses from contracts, it does not mean the company cannot still sue a client over a negative review, said Alderman.

“The law voids contract provisions that prohibit, and try to punish, individuals from asserting their First Amendment rights to express an opinion about goods or services,” he said. But “a person could still be subject to suit under our defamation and liable laws if what they say is false. An honest opinion is, however, protected.”

Alderman and Hicks both advise consumers to stay focused on their own experience and avoid any heated emotional language when giving a review.

“Make sure that what you say is expressed as your opinion or states facts that are true,” Alderman said. “Do not go ‘overboard’ on your review.”

Alderman said consumers can be protected by the law when they say something like “the goods were never delivered, and they were very rude when I tried to get a refund.”

But they may not be protected if they say: “The company is a total rip-off. I have never dealt with anyone who cared less about consumers and treated them like dogs. Keep away!”

Hicks said she always advises both consumers and companies to take a step back before responding to a problem.

“Before you go and write a review, calm down and take out some of the emotion involved. Stick with the facts,” she said. “Companies may take it personally, but I tell them if it’s something they can fix, go fix it.”

“Neither side wins when emotions are involved,” she said.

Angie’s List, which became free to the public last July, has more than 10 million customer reviews on its website. Hicks said her company has an extensive review policy in place that includes confirmation of the reviewer being a valid customer, prohibits anonymous reviews and uses technology to screen for red flags of someone trying to manipulate the system.

Angie’s List had just four companies that it excluded from its list in the past four years because of the clause — two dentists, a property manager and a lawn irrigation company, according to Cheryl Reed, a company spokeswoman. One of the dentists dropped the clause and is back in good standing on Angie’s List, she said.

Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net

Online reviews

  • Don’t write while you are upset.
  • Be reasonable. Avoid words like “best” or “worst” and exaggerated descriptions.
  • Discuss the entire experience, including both good and bad if there is are both aspects.
  • Leave out names. Focus on what happened, not who was involved.
  • Add your credentials. Discuss if you are experienced in this matter or are a novice.
  • Include the other side. Offer a possible reason for your experience from the company’s perspective.

Source: Better Business Bureau

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