Once again, for latecomers to this story… Several years ago, some folks in Utah went to make a tiny, under $20 purchase from an e-tailer called KlearGear.com. Their order never came and they canceled the purchase. They then went online and wrote a negative review of the website. When KlearGear eventually got wind of this feedback — several years after it had been posted — it slapped the couple with a $3,500 Non-Disparagement Fee.
The company claims that this fee is disclosed in its Terms of Sale that must be agreed to before making a purchase. The couple says it was not in the terms when they placed their order — which, again, never arrived, which to us would seem to void any non-disparagement agreement.
Even if the clause was in the terms, we found it buried two levels deep on the KlearGear site, on a page that is separate from what comes up when the shopper clicks on the Terms of Sale button. Clicking on that button takes you to a “Help” page, and about halfway down that page there is another link to the actual page with the Non-Disparagement clause.
When the couple didn’t pay, KlearGear turned their alleged debt over to a collections agency, which reported the $3,500 to the credit bureaus, resulting in damage to the couple’s credit score.
Represented by advocacy group Public Citizen, the couple sued KlearGear in a Utah court. KlearGear never responded to the complaint and in May, the court issued a default judgement against the company.
KlearGear’s owners finally spoke up after the judgement, saying it didn’t count because the France-based parent company says it never received any notice of the suit. And in spite of the fact that the KlearGear site listed a Grandville, MI, address (and shows a photo of a building at that address) for its “Legal Department,” the parent company claims it has no presence in the U.S. and the court documents should not have been sent to that address.
But that company has not made good of any of its threats to have the judgement vacated. And so the case continued to the damages phase yesterday, with the court awarding the plaintiffs $306,750 in compensatory and punitive damages plus attorneys fees.
“Now we’re going to be figuring out where KlearGear’s assets are and how we can collect them,” Public Citizen attorney Scott Michelman, who has been representing the couple in this case, tells Ars Technica. “The French company that appears now to own KlearGear made a series of statements to the media in which they attacked this lawsuit and me in particular but they never made any kind of motion to the court so there was nothing for the court to rule on as far as their objections were concerned.”
In a statement to Consumerist, the couple explains that the purpose of the suit wasn’t about getting paid.
“The support we’ve received (and continue to receive) is far more of a win in my eyes than any amount of money,” they write in an e-mail. “If this means that any other retailer thinks twice before threatening a disgruntled customer, then we’ve done what we set out to do.”