A critical ConsumerAffairs review

Last September, after California became the first state to make it illegal for businesses to put “non-disparagement clauses” in their contracts with customers, California congressmen Eric Swalwell and Brad Sherman, both Democrats, proposed a national version of the same law, the Consumer Review Freedom Act of 2014.

But last year's CRFA didn't pass, so yesterday Reps. Swalwell and Sherman, joined by Republican representatives Darrell Issa and Blake Farenthold, jointly proposed the Consumer Review Freedom Act of 2015.

The bill – available in .pdf form here – would “prohibit the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services that were the subject of the contract.” In other words, businesses can't penalize customers who criticize or express negative opinions about those businesses.

Though plenty of businesses have tried. Last August, for example, a New York State bed-and-breakfast called the Union Street Guest House gained unwanted media attention after the discovery of a non-disparagement clause hidden in the fine print of its customer contracts:

If you have booked the inn for a wedding or other type of event . . . and given us a deposit of any kind . . . there will be a $500 fine that will be deducted from your deposit for every negative review . . . placed on any internet site by anyone in your party.

Couple fined

In an even more notorious example from the previous year, the tech-toy company KlearGear ruined a Utah couple's credit rating by charging them a $3,500 “fine” over a negative online review they'd posted three years earlier. (KlearGear is still in business, though its non-disparagement clause is gone.)

Last September, after introducing the Consumer Review Freedom Act of 2014, Congressman Swalwell mentioned KlearGear's behavior as an example of why the law was necessary, and also said “It's un-American that any consumer would be penalized for writing an honest review. I'm introducing this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation.”

Scott Michaelman, an attorney for the consumers'-rights group Public Citizen, said in a press statement that Public Citizen supports the bill because non-disparagement clauses “deny consumers of the right to express negative opinions about the company”:

Too often, a consumer shares a negative customer service experience with others, then learns that according to the fine print in the boilerplate contract, he may not criticize the business publicly, including writing an online review. Companies use these unjust terms to bully dissatisfied customers into silence.

The Consumer Review Freedom Act would protect consumers’ right to speak out. The bill would protect individual consumers from hidden contract terms that forbid criticism. It also would help prospective customers avoid unscrupulous businesses by enabling them to learn from the experiences of their fellow consumers.

Both versions of the Consumer Review Freedom Act – last year's and this year's – would allow customers to criticize and express negative opinions about companies they do business with, but do not apply to customers who commit actual acts of “defamation, libel, or slander, or any similar cause of action.”

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