Online Appliance Shop Makes Customers Sign Agreement Threatening Criminal Libel Suits For Negative Reviews

from the that's-called-lying dept

Tue, Feb 15th 2011 4:31am — Mike Masnick

We've seen all sorts of retailers and service providers trying to cope with the fact that anyone can post reviews of their service online. In fact, we've seen doctors try to use contracts that assign the copyright (ahead of time) of any review over to those doctors, so they can issue a DMCA takedown on any review they don't like. Apparently, some others are simply making up laws. The NY Times covers how an online appliance retailer called Full House Appliances, has not only added a long, and legally questionable, terms of service to anyone who makes a purchase, but it also threatens those who make a negative review with felony libel charges.

Of course, as the article notes, these terms of service are all bark and no bite. Washington state, where the retailer is located, does not recognize libel as a criminal issue, so there is no "felony libel" there, despite the claims to the contrary. Furthermore, just because you agree to a terms of service like that, it still doesn't make a negative review libel unless there's actually libelous statements in the review.

The guy who runs the site (who wouldn't give his real name to the reporter) doesn't seem to care. He's just trying to scare off anyone who writes a negative review. Of course, all that should really do is scare off anyone from bothering to order from him. If someone presents you with a terms of service that threaten you with criminal charges for writing a negative review, it seems that would be a pretty clear sign that it's time to find a different retailer. Those terms seem like a bigger negative review than anything else out there. Of course, I'm also wondering if he's violating the law himself in threatening people with criminal charges based on absolutely nothing...

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Filed Under: defamation, libel, online reviews

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xenomancer (profile), 15 Feb 2011 @ 4:50am

Internet Justice
This guy should be on the look out for the pile of bad reviews he just asked for. Childishly limiting the actions of others tends to backfire, spectacularly in many cases.
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Skippy T. Mut, 15 Feb 2011 @ 5:10am

I wonder how...
...the current copyright holders of the TV sitcom "Full House" feel about "Full House Appliances"

Not that I believe they should have any rights over that name, but I think we've seen enough of those cases.
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Cloksin (profile), 15 Feb 2011 @ 5:15am

It makes you wonder, if a retailer is so concerned with negative reviews that they'll threaten you with a lawsuit in their terms of service agreement for a negative review, then they're probably not offering a level of service that is worth your time.

It seems to me that they are more interested in attempting to make money through lawsuits than from offering a service or a product that the public wants. My advice, avoid this retailer altogether and let them experience bankruptcy, at least then they won�t have to worry about any negative reviews.
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Anonymous Coward, 15 Feb 2011 @ 5:23am

I have never been a customer of fullhouseappliances.com, nor would I ever be. The web site is amateurish and the "about us" page looks like it was written by a 13 year old...

A: You got it. We have seen firsthand how selfish and unreasonable these consumers may become simply because they felt they could hide behind a computer. This false sense of invisibility and invincibility led them to be very aggressive. You know the second you are on-line, you leave "digital footprints" behind you... We confronted them. We told them Internet is not a "Wild West". It is just another form of media. They still need to play the game by the rules. Otherwise, we will assert our legal rights to protect ourselves from libels. Libel is a prosecutable felony in many states, (update: In the jurisdiction over our operation, it is no longer a felony. We apologize for the blunder.)

:::eyeroll:::
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Anonymous Coward, 15 Feb 2011 @ 5:24am

Seems like a good argument for a preemptive review.

I might have tried this service but they threatened me with libel if I didn't like it and told someone. This seems to be an admission that they know their service stinks.
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Anonymous Coward, 15 Feb 2011 @ 5:28am

Also from the "about us" page:

Q. I see that.. It is very informative. But I need to go now. Good luck.

A: Thanks

I can't stop laughing!
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abc gum, 15 Feb 2011 @ 5:33am

It is not libel if it is true - amirite?
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Colin, 15 Feb 2011 @ 5:39am

For what it's worth, they've updated their information now, including:

(update: In the jurisdiction over our operation, it is no longer a felony. We apologize for the blunder.)

The whole FAQ section is still pretty silly if you're looking for a good laugh, but it looks like this coverage has at least had some impact.
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Bastid (profile), 15 Feb 2011 @ 5:40am

My kid wrote my about us section
They apparently got the message, sort of

Q:Does this mean bad reviews are more trustworthy?( An important update is added on 2/14/2011, please read it below)

A:That is an intelligent question. I would say, yes, if a bad review has sufficient underlying facts to back it up. Otherwise, you have to be careful here. So far the "sell side" of the bad behaviors have been well publicized. But you know media is biased in that the "buy side" of the bad behaviors have been under-reported. Update on 2/14/2011: We are glad that it has finally received some media attention. The core message is loud and clear: OBJECTIVE reviews, good or bad, are always welcome; Libel is not. There have been intensive debates on the free speech on the internet. But if you drill down to the core of these discussions, there lies a fundamental philosophy: Man Vs. Machine. Internet or computing technology in general can NEVER replace human intelligence. When we apply human intelligence, it is not that hard to dissect the so-called "free speech" doctrine. Free speech is not the same as responsibility-free speech. The "Free speech" argument is a logical fallacy because it "conceals" the embedded premise: Free speech is not an absolute right. For every right, there is responsibility or obligation. Absolute power or right corrupts absolutely. "The internet bully" has been and will be the hot button issue until we begin to recognize the importance of human intelligence. With that, one can see that the difference between libel and an objective review is profound: The former is not based on facts; the latter is. To achieve objectivity, both the seller and buyer have to hold up their end of the bargain: The seller has to disclose as much as possible what it does and does not. A buyer has to read the disclosure. Contrary to what some media describes as "draconian" terms and conditions, ours are very much in line with the e-commerce standard, with one notable difference: we only have return for replacement policy. Intentional buyer's remorse is not welcome. Most of all, there is nothing that beats human contact. If you share the same philosophy, please call us AFTER you have done your reading. A 3-minute human to human conversation is all it takes and matters in the end.
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Kadinza (profile), 15 Feb 2011 @ 6:15am

Tech Dirt mistake
I have to question the article. When i looked the the company information it showed an address of Round Rock, Tx. That's near Austin in central Texas. Have they changed something because the article says Washington state.
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Prashanth (profile), 15 Feb 2011 @ 6:22am

It reminds me of how Ben Stein's movie "Expelled" was only screened for selected reviewers just to garner "praise" (which was all manufactured from the start). Once it got released to the public at large, it flopped both critically and financially. (I also strongly disagree with the stuff presented in that movie, but that's entirely another story.)
It's true that the service must be pretty bad if the owners are that concerned about poor reviews.
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Anonymous Coward, 15 Feb 2011 @ 6:33am

They get glowing reviews at resellerratings.com. The only negative rating says:

"Comment deleted at the request of the posting party. 01-24-2011"
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theangryetailer (profile), 15 Feb 2011 @ 6:42am

I feel his pain
Without a doubt, threatening to sue over bad reviews is over-the-top and does not promote a good image, however, I feel his pain.

If only there was a universal review method that everyone used that was editable to account for poor reviews that had been addressed by the company in question.

If the guy sells a stove and it later has a recall, does this constitute a bad review for his store?

If so, and customer leaves one, and the seller replaces the stove, this should be reflected in the reviews.

Also, this is a Yahoo! store, so.... Sort of like reporting on some dumb terms in an eBay auction.

The guy has good reviews on reseller ratings
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Mr. Smarta**, 15 Feb 2011 @ 7:00am

What else is next...?
"By reading these forums, you are hereby not allowed to post any words that may represent negative views or condemnations of our company's poor service. Just by reading these lines, you hereby give up all rights currently held under the US Constitution, the Bill of Rights, the Declaration of Independance, the Monroe Doctrine, or any other government ever created, revised, edited, killed off, voted down, voted up, or re-established. By reading these lines, you are now prohibited from saying anything negative about our company, any affiliates we may work with, have worked with, or will work with. You are prohibited by law from reviewing negative feedback on other websites, reviewing reviewers, or reading anything deemed negative on any federal, state or existing website found anywhere on the internet.

Furthermore, you expressly commit that you are deemed federally, state, and personally liable for any and all comments you may or may not post on this website or any other website with the name of our company, our partners, our affiliates, our neighboring companies down the street, or any other company who's name contains alphanumeric letters or numbers in any language including, but not limited to, English, Spanish, German, Greek, Romanian, Lithuanian, Russian, Swahili, and Pig Latin. By clicking below, you assert that you give up all rights to legal counsel or any possibility of winning any court case you file against us, we file against you and/or any family member who may or not be involved.

This document is a legal binding document that specifically prevents you from stating anything negative against our company, prevents you from suing us and winning in court, suing us and charges being dropped, prevents you from visiting our building or any land we may own, prevents you from holding your rights as an American, a human being, or a member of any other country or entity, prevents you from talking about us behind our backs or to our faces, prevents you from talking to friends or strangers about us, prevents you from parking on our parking lot or any side streets around our buildings in no less than 300 mile radius, prevents you from getting a good night sleep knowing you visited our website, prevents you from changing the settings on your refrigerator or freezer, prevents you from parking in your own garage, prevents you from turning on any major appliances or making a cup of coffee as you see fit (in fact, you're not allowed to 'see fit' either), prevents you from using your phone to call numbers we deem inappropriate, prevents you from saying, seeing, smelling, hearing, touching, or tasting anything we deem to be negative to our company, prevents you from wearing nothing but an athletic supporter and running down the street screaming 'The Madagascarians are coming!', prevents you from using a curling iron in any fit or unfit oriface not dictated by the manufacturer, and prevents you from doing anything else we may add to this list later.

Failure to follow this terms of service, as you agreed by reading, automatically removes any rights you have as an individual, person, member of people, member of corporation, company, sex-related website, or national ruling body. You give up the rights to any and all amendments, and this automatically qualifies us to sue you at any time we see fit to which you must automatically pay up without fighting as outlined by recording industries, movie industries, or any other organization, for no less than fifteen times your gross lifetime salary, two cars, your computers and all hard drives, and half that blueberry pie you may have in your refriderator."
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Anonymous Coward, 15 Feb 2011 @ 7:05am

This is not actually that uncommon. Some time ago I went to an emergency vet. I had the worst treatment and ended up spending 200 dllrs for some "vet"(yoga instructor mind you) to say stupid things. I had to ask the guy to check her eyes and gums. They made me sign some shit and I ask the clerk who was obviously clueless why they make people sign, she said they get lawsuits all the time from pissed off customers.
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kenari, 15 Feb 2011 @ 7:12am

Here's what their policy says:

=========================================================
"There have been precedents where some customers threaten to post libelous feedback on Full House Appliances (FHA for short hereafter) as a means to pressure the seller to meet their unreasonable demands. I understand that libel is illegal in the state where FHA operates. I agree that If I intend to provide negative feedback, the only legitimate one is based solely on verifiable and documented facts, i.e. the email, live chat transcript and all the terms and conditions in the "About Us" section of FHA's web site, referred to as three sources hereafter. These are the only ways of my interactions with FHA as the bases for my feedback, besides the non-interactive facts such as a shipment tracking No. or any other 3rd party objectively documented fact. Phone conversations are excluded. Such negative feedback must be accompanied by the fact that my experience falls below the promises or the standards explicitly and objectively indicated in these three sources. Personal opinions, perceptions, emotions, interpretations, feelings, boilerplate language or any other subjective expressions are not allowed. I understand there are two types of feedback by nature. One is subjective such as a movie review. The other is objective. My negative feedback, if there is any, on FHA must be the latter. If an initial email is not responded to, I will use the "Request A Read Receipt" feature on my follow up email. Only a non-response from FHA after 72 business hours from the time it is read, can be used as a basis of negative feedback in the lack of response category, unless there is a specific time requirement for response in my email due to the time sensitivity. A voicemail accompanied by an email notifying us of such a voice message that is deposited at a specific time, after it is read with proof described above, is also regarded as the same and only evidence aforementioned. An unanswered live chat request is excluded from such a lack of response. I agree any breach of the above constitutes libel. FHA will seek damages against me, which include without limitation $20,000 or the lost profit of 2 orders per day on an annualized basis calculated specifically as the average profit margin of all orders in last 12 months x (times) the average order size in the last 12 months x (times) 2 x (times) 30 x (times) 12, whichever is greater. I also understand the majority of FHA (98.5% by FHA estimation) customers do not have any intent to libel. Usually a simple call/email/live chat is enough or even no follow up inquiry is needed. FHA's well documented reputation in all aspects of order execution has one important premise, i.e. FHA must minimize distractions and stress to their well established system. Libel is the key source of such."
=========================================================

What they don't realize is that a negative or bad review against a company or service isn't libel. It's just that, a negative review based upon a negative shopping experience. You can post all the negative reviews that you want about their company but how would they ever know who posted it unless they knew the real identity of the poster?
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Overcast (profile), 15 Feb 2011 @ 7:17am

"Online Appliance Shop Makes Customers Sign Agreement Threatening Criminal Libel Suits For Negative Reviews"

To me... ^^^^^^^^^^^ That is a negative review. Big time.

There is a very easy way to avoid this however; don't buy anything from them. Done deal. No worries.
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velox (profile), 15 Feb 2011 @ 7:19am

Re: Tech Dirt mistake
It looks like the mistake was made in the NY Times article which refers to WA State.
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Danny, 15 Feb 2011 @ 8:04am

A missed opportunity...
You know instead of trying shut out people who give bad reveiws this business could...I don't know...address their issues promptly and correctly and possibly turn them into good reviews?

I have much more respect for a business that can handle bad customer experiences with good customer service than one that thinks it can somehow stop customers from talking about their bad experiences. (Obviously there is a limitation how much in the way of back produts you're going to put up with but still I think its a bit of a balance.)
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Anonymous Coward, 15 Feb 2011 @ 8:10am

2. You Know Exactly What Your Getting.

If you're going to insult the intelligence of others with your stupid About Us section, perhaps you should hire an editor.
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Anonymous Coward, 15 Feb 2011 @ 8:17am

Everyone who refuses to buy from them should email them and let them know.
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Atkray (profile), 15 Feb 2011 @ 8:53am

Re:
Wouldn't that be a DOS attack?
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Greg G (profile), 15 Feb 2011 @ 9:06am

They could learn from my home inspector
We bought a house in March 2010. We used an inspector that my brother recommended (which is a rare occurance.)

After talking to the guy before the inspection, he stated that all his reviews are posted on a site that he has zero control over, therefore he can't pick & choose what people say about his service.

We hired him to inspect the house and we found out that his 5/5 rating was well deserved. He also stated that if anything was NOT satisfactory, write about it in the review. He only wanted a chance to fix what was unsatisfactory.

I now recommend this guy to anyone I know that's buying a house.

Bottom line, these companies out there need to learn about true customer service. Unfortunately, there are people that run business's in the service industry that have no business being in business. The guy that runs that appliance store needs to learn, and learn fast, or he will be another data point on the chart of failed business ventures.
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xenomancer (profile), 15 Feb 2011 @ 9:20am

Internet Justice
This guy should be on the look out for the pile of bad reviews he just asked for. Childishly limiting the actions of others tends to backfire, spectacularly in many cases.
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Whistle Blower, 15 Feb 2011 @ 9:54am

Human Vs. Machine
Very interesting "About US" Section. I agree. There is a balance. I run a retail. Bad consumer behavior is nothing new. Part of the business and all...

I would say 99% of the issues can be resolved quickly face to face. Internet adds a whole new dimension. I don't like the way our society is going. It is so much unreal, like Matrix. No more handshake, no more "looking in your eyes".

Call me old school.

I actually am going to call them to chat a little. Why not? I am a human.
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Dean Landolt, 15 Feb 2011 @ 12:25pm

"Of course, I'm also wondering if he's violating the law himself in threatening people with criminal charges based on absolutely nothing..."

If he's not, he ought to be. I don't say this often, but there ought to be a law...
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Eunice, 15 Feb 2011 @ 1:21pm

Internet Bully Or Interent Punk
A bad review is not the same as Interent Bully. If this company is a bad company, and tries to cover it up, then they must have a bad record somewhere. I don't see it. They seem to have a good stranding with BBB. I primarily use BBB to check out a business. Online reviews make me dizzy. Hard to tell if they are real or fake.

I think this is probably a decent company, but has bad experience with internet bully. I assume it is 1.5% of the customers in their case based on their figure, i.e.the majority of FHA (98.5% by FHA estimation) customers do not have any intent to libel. I can see it is a believable percentage of population, not just in retail. If so, I am all for it. I hate internet bully. If you are a "tough" guy, show us by the merits of your reasoning, not threats.

If they have nothing to hide and I know I have nothing to hide, I am OK with that.
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Pontifex (profile), 15 Feb 2011 @ 5:32pm

If a doctor claimed copyright a negative review you wrote about him, couldn't you republish it with a bunch of snarky comments and claim that it was a parody of the original?
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PG, 16 Feb 2011 @ 5:29am

Phone?
If you aren't allowed to refer to phone conversations in reviewing this company -- only email, live chat and other textual sources -- why is the company urging people to communicate with it by phone?
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Josh King (profile), 16 Feb 2011 @ 6:46am

Another example of overreaching TOS
This reminds me of the TOU of onetimefax.com, which I ran across when the owner of that site complained about a negative review on my site (Avvo.com). The whole thing is worth a read (http://www.onetimefax.com/terms-of-service.php), but here's one particularly lovely bit:

"You or any employees acting and/or but not limited to associates for you are not authorized in any way to make any representations of this company that may harm it. You are not authorized to speak, share with write and/or but not limited to communicate in any way, with any person, persons or any entity about this company even if your not a customer or client. In doing so, you will be stealing proprietary materials. If this so happens, you will be responsible for all our/your reasonable attorneys' fees if any legal actions are to pass. For the protection of this company you will follow the but not limited to the above mentioned rules. No person, persons and/or any entity are not authorized to speak, write and/or but not limited to communicate in any ill will of OneTimeFax.com, EJOAT Enterprises, the EJOAT network and/or any entity of which of any past or future information, opinion and/or but not limited to financial transactions."
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Josh King (profile), 16 Feb 2011 @ 6:48am

Another example of overreaching TOS
This reminds me of the TOU of onetimefax.com, which I ran across when the owner of that site complained about a negative review on my site (Avvo.com). The whole thing is worth a read (http://www.onetimefax.com/terms-of-service.php), but here's one particularly lovely bit:

"You or any employees acting and/or but not limited to associates for you are not authorized in any way to make any representations of this company that may harm it. You are not authorized to speak, share with write and/or but not limited to communicate in any way, with any person, persons or any entity about this company even if your not a customer or client. In doing so, you will be stealing proprietary materials. If this so happens, you will be responsible for all our/your reasonable attorneys' fees if any legal actions are to pass. For the protection of this company you will follow the but not limited to the above mentioned rules. No person, persons and/or any entity are not authorized to speak, write and/or but not limited to communicate in any ill will of OneTimeFax.com, EJOAT Enterprises, the EJOAT network and/or any entity of which of any past or future information, opinion and/or but not limited to financial transactions."
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Anonymous Coward, 8 Feb 2012 @ 12:30pm

I was intruiged when I saw that the price of the product I intended to buy was much lower at full house, but upon calling them I was surprised to hear that the price "had suddenly gone up" in the middle of our conversation even after I had verified the price with them earlier. It seems odd to me that they would not honor the price they have listed on their website and the price they had verbally confirmed with me, and when I stated that they responded with "well it's in the terms and conditions, this just happens sometimes". I would not shop somewhere that doesn't honor their own listed prices.
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starkruzr (profile), 14 Apr 2020 @ 3:08pm

he's either out of business, in jail for fraud, or dead
His name is (was?) Matthew Bailey and all of his former "EJOAT Enterprises" domains are dead, in case anyone was wondering. I've seen notes about this guy on other websites as late as 2018.
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