KlearGear No-Shows Hearing, Reinstates $3,500 Non-Disparagement Clause

from the your-one-stop-shop-for-bullshit-clauses! dept

Wed, Mar 26th 2014 9:55am — Tim Cushing

KlearGear is getting back into the pay-to-complain business. Despite being forced into hiding after news surfaced that it had (fraudulently) attempted to extract $3,500 from a negative reviewer using a bogus non-disparagement clause hidden in its "Terms of Sale and Use," the company continues to limp along, avoiding taking responsibility for its actions.

As KUTV.com notes, the impossible-to-locate representatives of KlearGear were no-shows in court. (h/t to Techdirt reader Howard Robinson)

The court clerk declared kleargear.com to be in default on March 11, 2014. Eight days later, Michelman proposed a default judgment which reads, "kleargear.com is liable to [jen and her husband] for violating the fair credit reporting act, for defamation, for intentional interference with prospective contractual relations, and for intentional infliction of emotional distress."

Michelman told Get Gephardt Thursday that he expects the judge will sign the motion and order kleargear.com to pay restitution to John and Jen.

The proposed default judgment does not say how much kleargear.com will be asked to pay. Rather, Michelman has asked for a future hearing where the judge would determine the penalty. A letter sent to kleargear.com by Michelman before the lawsuit was filed said John and Jen would ask a court to award $70,000.

So, for the want of $3,500 (via a BS clause hidden in the terms of sale and not even active when the suing couple purchased [but did not receive] an item from KlearGear), the company is now potentially out $70,000 (thanks to Public Citizen's efforts on the Palmers' behalf). That's if anyone can get ahold of the company's owners. So far, these principals have managed to avoid being smoked out by the internet heat.

But there's even more to this story. The original non-disparagement clause, which was pulled down shortly after KUTV's Matt Gephardt started asking questions, has now resurfaced. The gotcha clause has been placed back in its original spot in the "Terms of Sale and Use" (albeit under a slightly different url -- "termsofuse1," rather than "termsofuse").

Also making a return is KlearGear's horrible "chargeback" policy, which similarly disappeared briefly along with the non-disparagement clause.

[S]hould Klear Gear receive a chargeback (a sale reversal that occurs when a customer contacts his or her credit card-issuing bank or credit card company to request a refund for any part of a purchase that they or someone else made on their credit card) or other reversed charge from a third party (e.g., PayPal), credit card company or bank on your behalf before Klear Gear has been given a chance to resolve the issue as provided in this section, Klear Gear has the right to collect on the shipped products or rendered services and any fees associated with those disputes.

Klear Gear charges a $50.00 Dispute Fee per above-described Dispute should KlearGear.com not be given an opportunity to resolve any dispute as provided in this section, and the offending customer's personal information (with the exception of sensitive payment method details) will be provided to BadCustomer.com to limit the customer's ability to purchase from other retailers and service providers. The Dispute Fee is not refundable, even if Klear Gear wins your dispute or if you later cancel your dispute. By making a purchase through KlearGear.com you expressly authorize KlearGear.com to charge to the credit card you have provided to purchase the goods or services in dispute.

If Klear Gear is unable to charge the Chargeback against this credit card, Klear Gear shall have the right to otherwise collect the Dispute Fee from you. If Klear Gear is unable to collect the aforementioned Dispute Fee within 30 days of first attempting to charge you under this agreement, Klear Gear will forward your account to our external collections agency and assess an additional $500.00 Collection Fee. The original Dispute Fee and Collection Fee are subject to 2% monthly interest until the balance is paid in full including associated collection fees, legal fees, and costs of court as assessed separately by our collection firm. As a customer of KlearGear.com, you hereby expressly agree to these Terms.

Not only is this a lousy way to treat customers, it's an absolutely abhorrent way to "provide" customer service. Not only will KlearGear hit you with an immediate $50 charge, it will forward this charge to a collection agency within 30 days and tack $500 on top of it. As if the pocketbook hit weren't excessive enough, the company will also spitefully drag your name through the mud via Badcustomer.com should you have the gall to dispute a charge. The use of Badcustomer.com points to more disreputable actions on Kleargear's part. The whole clause has been reinstated, apparently blissfully (or evilly) unaware that the website was shuttered by the FTC in 2011, after being found guilty of participating in a "cyberbullying billing scam" that "siphoned $275 million" from credit card users' accounts over a period of 4 years. I guess if you're a bullying company, you partner with other, equally-bullying "colleagues."

There's a bit of history to this policy as well. For the first few years of business, neither of these godawful clauses existed. KlearGear ran like a normal, reputable business. The $50 fee/chargeback policy didn't show up until May 2007. In July 2007, the policy remained the same, but the wording now referred to a company called "Havaco Direct" which had the "right" to hit customers with a $50 chargeback fee. By October, "Havaco Direct" had vanished from the policy's wording.

It wasn't until December of 2009 that KlearGear threatened to notify Badcustomer.com about customers who dared to exercise a chargeback. It wasn't until June 2010 that it added the $500 "collection fee." Syncing this timeline up with KlearGear's BBB troubles is enlightening.

By May of 2010, KlearGear was sporting a gaudy "F" at the Better Business Bureau, the same entity that has given a terrorist organization an "A" simply because it followed all the rules. This suggests that KlearGear's customer service has been abysmal for quite some time. (The BBB site notes that 95 of 123 complaints over the previous three years had gone unanswered by the company.) As the chargebacks and complaints mounted, the company apparently decided to address the issue by making it financially unwise to dispute charges and, after being outed in 2012 by the BBB for fraudulently awarding itself an "A" on its website, it added the non-disparagement clause (in June of 2012) as further disincentive for unhappy customers to make their complaints public. KlearGear was stripped of its BBB accreditation in November of 2012.

Now, with its failing to show up in court and having reverted to its customer-punishing ways, KlearGear appears to be more than happy to take money from unwitting chumps and have every incentive not to take care of these blissfully ignorant customers. Why fulfill an order when you can collect anywhere from $50 to $3,500 for treating them poorly?

With its nonexistent staff, numerous address changes and unwillingness to confront any of these issues, its bizarre, abusive "terms of sale" seem to indicate the owners (whoever they are) are willing to run this business into the ground and walk away from the wreckage. Trying to apply logic to its business practices leads one to speculate that it's actually not an ignorant man's ThinkGeek, but rather an elaborate front for something shadier, like money laundering.

KlearGear very likely isn't a front, but rather, a business run by combative people with lousy business acumen and even lousier customer service skills. It's one thing to take someone's money while burdening them with bogus (and supposedly binding) clickwrap Terms of Sale. It's quite another to actually fulfill your end of the bargain and provide them with their purchased items.

Until someone actually outs those responsible for this debacle d/b/a KlearGear, about all anyone can do is spread the word about its abhorrent policies and hope that no one they know is putting their money into clearly undeserving pockets.

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Filed Under: default, non-disparagement clause
Companies: kleargear

50 Comments

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Ninja (profile), 26 Mar 2014 @ 9:33am

Clearly they are committing slow suicide. When it spreads enough the only path they'll be heading is towards bankruptcy.
[ link to this | view in thread ]
rw (profile), 26 Mar 2014 @ 9:49am

Re:
Nah. Just change the name and continue. Reminds me somewhat of Prenda and its shell companies.
[ link to this | view in thread ]
John Fenderson (profile), 26 Mar 2014 @ 10:02am

badcustomer.com
Heh. Badcustomer.com is no longer operational. The domain name is for sale, and the website is nothing but a parking page.
[ link to this | view in thread ]
Glen, 26 Mar 2014 @ 10:14am

I hope like hell they can find the owners of this company.
[ link to this | view in thread ]
Bt Garner (profile), 26 Mar 2014 @ 10:16am

Re: badcustomer.com
Cool . . let's buy badcustomer.com and make it look like the old site, with one change: the ToS will now say that submitting a name is grounds for a $500 processing fee (non refundable) that if not paid will be turned over to a collection agency, along with an additional $1,000 fee.
[ link to this | view in thread ]
John Fenderson (profile), 26 Mar 2014 @ 10:21am

Re: Re: badcustomer.com
A had a very similar thought, but I'm guessing that "badcustomer.com" is a rather expensive name to purchase.
[ link to this | view in thread ]
kenichi tanaka (profile), 26 Mar 2014 @ 10:23am

Uh, KlearGear are a bunch of idiotic morons. There's no way that any credit card company would allow such a bogus $50 dispute fee. I find it laughable that they're trying this tactic.
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Ima Fish (profile), 26 Mar 2014 @ 10:24am

"Until someone actually outs those responsible..."

According to KlearGear's website the address is: 2885 Sanford Ave SW, Grandville, MI 49418

There is nothing with any variation of the KlearGear name in Michigan's corporate database.

Google Maps lists the address as belonging to: BoostPlatform, LLC. BoostPlatform, LLC's website (www.boostplatform.com) is down.

According to Michigan's corporate database, BoostPlatform, LLC has ANAND CAPUR as a resident agent.

Here is Anand Capur's linkedin account. Which acknowledges he's the founder of BoostPlatform, LLC.

Is Anand Capur the owner of KlearGear? Maybe.
[ link to this | view in thread ]
scotts13 (profile), 26 Mar 2014 @ 10:28am

A literal parody of a bad company?
It seems as though they're going out of their way to do EVERY POSSIBLE THING wrong. is this a piece of performance art of some kind? Is it even possible to be this stupid AND evil?
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 10:36am

Re: Anand Capur
While BoostPlatform might be related, I think it far more likely that KlearGear just picked an unrelated address and put it up so they appear to show a physical address. The information about Anand Capur shows he is self-consistent, but shows no indication he is involved with KlearGear. Additionally, given how much effort KlearGear is putting into remaining unidentified, posting their real business address on their website would be extremely sloppy. If they gave any sort of real address, I would expect it to be either a Post Office box or a lawyer who is paid handsomely to forward their mail and do his best to avoid identifying them.
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John Fenderson (profile), 26 Mar 2014 @ 10:39am

Re:
The credit card company doesn't have to allow it. The terms clearly say that if they can't get it through the CC company, they'll send it straight to collections themselves.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 10:44am

Re:
2885 Sanford Ave SW, Grandville, MI 49418 is an interesting address.

According to this list at mailboxforwarding.com, it's not a real business location, but an operation offering mail forwarding services. (If you search on the address, you'll find all kinds of companies and organizations using those services.)

So anything that matches on that address is most likely accidental and irrelevant. It just happens to be someone/something who happens to be using the same service.
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Ima Fish (profile), 26 Mar 2014 @ 10:44am

Re: Re: Anand Capur
I'm certainly not going to say it is Anand. And you might be right that they just randomly picked an address. They also could have rented space from him. Who knows?

However, to get a default, you must get service. So they must have served someone. Who did they serve?
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Ima Fish (profile), 26 Mar 2014 @ 10:47am

Re: Re:
Thanks, even though it destroyed my entire theory. That's a huge clue.
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Quiet Lurcker, 26 Mar 2014 @ 10:50am

Fingerprints
I expect someone had to have paid an internet registrar to get KlearGeer on the net. And work on the web site. And internet access for the web site.

Seems like a job for Prenda or Lipscomb; let them pay off a tiny portion of their debt to society by locating these, uh, in-duh-viduals.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 10:52am

Fingerprints
"Seems like a job for Prenda or Lipscomb; let them pay off a tiny portion of their debt to society by locating these, uh, in-duh-viduals."

Hell, this sounds like a Prenda operation.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 10:57am

Re: Re:
I think much a much more likely candidate is Lee Gersten, who is named as the CEO in this press release by one of his own employees, Margaux Banet. Banet is listed as the media contact on this page at KlearGear's site, with this information:

Margaux Banet
Media Relations
KlearGear.com
2885 Sanford Ave SW #19886
Grandville, MI 49418-1342
Phone (616) 965-2426
Fax (616) 965-2427

That press release, by the way, includes this phrase: "Christophe Monette, CEO of Kleargear parent Descoteaux Boutiques". It also includes this information on that company:

Descoteaux Boutiques
ZAC Paris Rive Gauche
118-122 Avenue de France
75013 Paris
France

The press release includes some gems. Here's a snippet:

When we put the customer in the driver seat a year and a half ago," Monette shared, "we didn't know where they would take us. Their collective genius, and Kleargear's responsive team, helped us build a more innovative and collaborative culture at Kleargear and a delightfully renewed sense of fun."

Customer feedback also drove new store improvements including pre-order and back-order capabilities, enhanced order communication, simplified navigation and returns processes, and inspired more detailed product information. "We sell fun," said Gersten, "and we're removing obstacles in the path of delivering it."
[ link to this | view in thread ]
JEDIDIAH, 26 Mar 2014 @ 10:59am

Got a petard?
That seems to be a tactic fraught with great peril.
[ link to this | view in thread ]
Ima Fish (profile), 26 Mar 2014 @ 11:00am

Re: Re: Re: Anand Capur
According to an Anonymous Coward, the address is basically a mailing address for multiple firms.

So if it's a randomly picked address, the selection was not that random. But was intentionally picked to be even more obscure.

Here's another question to no one in particular: Has anyone ever bought and received anything from KlearGear? I wonder if it's a pure scam or just poorly run.
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David, 26 Mar 2014 @ 11:32am

Re: Got a petard?
With great peril comes great irresponsibility.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 11:40am

Re: Re: Re:
https://connect.data.com/company/view/ovhPOQDv3iTQpt0RWCBB9A/havaco-direct

same address
http://www.wysk.com/index/texas/san-antonio/k6qwtx8/neonetz-international-inc/profile
[ link to this | view in thread ]
ltlw0lf (profile), 26 Mar 2014 @ 11:54am

Standard Operating Procedure...
Isn't the new standard operating procedure for this type of thing to seize the domain, all funds from US banks, and everything else, or is that option only available to IP companies like AACS?

Seems like AACS got the judge to do all these things against DVDFAB, an international company who didn't show up and defaulted in a US court. Not that I think that was the right way of doing business in order to enforce a BS US law against a foreign company which is not subject to that law, but it sure smacks of high court/low court in this case.
[ link to this | view in thread ]
This guy, 26 Mar 2014 @ 12:11pm

http://www.prweb.com/releases/2006/06/prweb405204.htm

This seems to claim that the president of Kleargear is William Bermender (this article was linked to by kleargear's wikipedia page). Interestingly, the executive profile for him at businessweek lists him as chairman and director of Chenal Corp...which is the other company mentioned in that article.

http://investing.businessweek.com/research/stocks/private/person.asp?personId=112775019&privcapI d=112771552&previousCapId=112771552&previousTitle=Chenal%20Corp.

I think kleargear is more than just a shitty business.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 12:13pm

Re: Re: Re:
(yes, I'm replying to myself)

I'm having some trouble establishing the existence of a person named Lee Gersten who is (a) alive and (b) in Michigan. Is anybody else able to do so?
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 12:17pm

Re:
Interesting find, and I concur with your conclusion. But that press release dates from 2006. I think it's possible that the person holding the position has changed. (It's also possible that "president" and CEO" are different positions.)
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 12:47pm

Someone needs to complain at Godaddy that they are running a scam site and bully people into silence.

I'm sure Godaddy will suspend their site.

However I'm not jumping through these hoops myself due to the sheer amount of personal information Godaddy tries to mine from people submitting complaints.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 12:49pm

Re:
GoDaddy? One the largest, most earnest and persistent supporters of spammers, typosquatters, phishers, scammers and every other kind of parasite?

hahahahahHAHAHAHAHAHAHAHAHAAHA

Good luck with that. (And yes, they do try to get a lot of personal info from complainers. Did you know that quite often they pass that along to the people you're complaining about? Look it up.)
[ link to this | view in thread ]
John Fenderson (profile), 26 Mar 2014 @ 12:54pm

Re: Got a petard?
I'm not so sure. Once it's in collections, if you can show that the debt isn't actually owed for some reason, the response is to cease collections and enter an explanation into your credit record. Nothing bad will happen to KlearGear unless the person who was sent to collections directly sues them.
[ link to this | view in thread ]
Frankz (profile), 26 Mar 2014 @ 1:04pm

Can't the attorney request permission from the court to send subpoenas to try to ID the owners? Subpoena the registrar of the domain name, the website hosting company, the mail forwarding service if that's all their listed address is, the phone company for the listed 1-800 number, Paypal, and credit card companies and/or banks that forward the payments.
[ link to this | view in thread ]
Frankz (profile), 26 Mar 2014 @ 1:10pm

Re: Re: Got a petard?
Nothing bad will happen to KlearGear unless the person who was sent to collections directly sues them.
Which is exactly what this case is, but since KlearGear didn't respond to the suit and nobody knows who the owners are, nothing bad will happen to KlearGear at all.
[ link to this | view in thread ]
Zimzat (profile), 26 Mar 2014 @ 1:34pm

Re: Re:
I noticed the city similarity in one of the article links and looked closer at the address. Thanks for posting this as I was also going to say it's just a mail forwarding service. You can call it "apt" "#", "ste" or anything else as long as it contains the box number.

I've been using them for years and they've been really good. I wouldn't encourage blaming them for anything this company is doing as that would just be like blaming the Post Office for delivering a rotten tomato to someone without knowing what it was.
[ link to this | view in thread ]
Zimzat (profile), 26 Mar 2014 @ 1:36pm

Re: Re: Re: Re:
You don't have to live in Michigan to use the mail forwarding address in Michigan. Mailboxforwarding scans the outside of all mail and allows customers to optionally open and scan the contents to view online before either forwarding it to anywhere else in the world or shredding it. I've been using them for years while I've technically been homeless traveling the country or living in Georgia or Washington or wherever.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 2:57pm

Re: A literal parody of a bad company?
Yes it is possible.

I know of one guy who owes the State of Wisconsin 1.3+ million in back taxes and has been doing this same kind of "odd" behaviour for years.

Tells one court (mke 2010cv15980) that he's the general manager, another that he doesn't know who the owner of the business is (wauk 2012sc400), a 3rd court (mke 2013cv2944) that he's the 50% owner of the business, and a public licensing hearing (http://milwaukee.granicus.com/MediaPlayer.php?view_id=2&clip_id=516 at 'round the 3:25 mark)that his daughter is the majority owner and has always been such.

Don't be shocked - but the court system doesn't care if you lie in civil matters.
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NoahVail (profile), 26 Mar 2014 @ 3:53pm

Re:
Blagnet did some digging and turned up these Kleargear dramatis personae last Nov.
http://www.blagnet.net/2013/11/18/my-review-of-kleargear-com/
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 5:01pm

The owners of Kleargear are in the wrong line of work. They should be bankers.
[ link to this | view in thread ]
Daemon_ZOGG, 26 Mar 2014 @ 5:03pm

"KlearGear No-Shows Hearing, Reinstates $3,500 Non-Disparagement Clause"
Klear-Gear has no legal standing in court now. Any attempt to for them to collect, can legally be thrown out and then ignored or laughed at, or both. I wander what the FTC thinks about these idiots? Stupid is as stupid does. Besides, you wouldn't buy something from a known con-artist or fraudulent criminal entity. Right?
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2014 @ 5:31pm

If one wishes to find them a subpoena to every payment processor they use is step 1.
Step 2 is to have the court freeze those assets while issuing a subpoena for the bank records.
Step 3 is to serve the account holder and if they claim to know nothing transfer the owed monies to the plaintiffs and then let the Feds have the account holder... cause lying in banking is bad (if your not the bank).
Step 4 watch the people scramble.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2014 @ 5:53pm

Re: Re:
That's great work, thanks for the pointer to it. (Interestingly, that analysis says they're owned by Havaco. Contrast by what's upthread here from their own press release.)

I'm growing increasingly convinced that none of those people are real -- that they're either pseudonyms or complete fabrications. Can't prove it. Could be wrong. But I'm really starting to get the sense that maybe the reason we can't find these people is that they don't exist.
[ link to this | view in thread ]
clif, 26 Mar 2014 @ 7:06pm

http://www.ripoffreport.com/r/EXPOSED-Kleargearcom-Ripoff-the-inside-story-William-Bermender-Han-Rei nett-Tom-Rifkin-iHaniel-Havaco-Direct-Badcustomercom-Jen-Palmer/internet/EXPOSED-Kleargearcom-Ripoff -the-inside-story-William-Bermender-Han-Reinett-Tom-Rifkin-1100482
[ link to this | view in thread ]
IrishDaze, 27 Mar 2014 @ 12:58am

Re:
Ok, now THAT link has quite a bit of specific information about specific people and companies, all apparently related to this criminal organization.
[ link to this | view in thread ]
Anonymous Coward, 27 Mar 2014 @ 6:32am

Re:
There's a lot of good information there, although badly-organized and full of breathless self-promoting prose.

I strongly suspect that -- like the Prenda case -- this one won't be unraveled until skeptical judges issue subpoenas AND ENFORCE THEM. I'm not at all confident that will happen: who's going to go in front of them and persuade them to do so? Who's going to send federal marshalls out to fetch the people behing this?

But it would be terrific if that happened. I'd really, really like to know what the backstory to this is. Identity theft? Extortion? Money laundering? or something else or some combination?
[ link to this | view in thread ]
John Fenderson (profile), 27 Mar 2014 @ 9:13am

Re: Re: Re:
Yeah, the more research I read about who these people are, the more this company looks like a front or a shell.
[ link to this | view in thread ]
Jack, 27 Mar 2014 @ 12:18pm

Re: Re: Got a petard?
Problem is they are using a really, really shady collection agency who doesn't give a fuck about the fact that you don't really owe them money.
[ link to this | view in thread ]
Jack, 27 Mar 2014 @ 2:00pm

Did a little more digging
William F Bermender, born 3/12/1970 was married to Susan B Bermender (nee Vanhorn), born 6/2/1972, on October 6, 2007 and they are currently living in San Antonio, TX. They own at least two properties in Bexar County at 407 Coyanosa Falls that I believe is currently rented out and 2238 Buroak Ridge which seems to be their primary residence.

I was able to get copies of the deeds, the mortgages, their marriage license, etc., etc. etc. Lets dox these assholes.
[ link to this | view in thread ]
John Fenderson (profile), 27 Mar 2014 @ 8:36pm

Re: Did a little more digging
Let's not.
[ link to this | view in thread ]
Anonymous Coward, 29 Mar 2014 @ 3:09am

Re: Re: Re: Got a petard?
After running a quick whois, I'd imagine that Domains By Proxy, LLC., likely knows...
[ link to this | view in thread ]
Anonymous Coward, 2 Apr 2014 @ 5:48am

Re:
http://en.wikipedia.org/w/index.php?title=Kleargear&offset=&limit=100&action=history

Wiki pedia revision history shows that KlearGear has been in business since 2001, but didn't get a Wikipedia page until November 2013, just when the Jen Palmer harassment story blew up on the net. The wiki consists entirely of a report on the controversy. On google for KlearGear this wiki is number two. It is no exaggerated reaction to say that this quick background check would kill any sale to me (whatever they are selling).
[ link to this | view in thread ]
John Palmer, 5 May 2014 @ 10:23pm

badcustomer.com is gone...
so if you go to badcustomer.com now, there's a mention at the top that the domain is now for sale
[ link to this | view in thread ]
Mark, 17 May 2014 @ 2:18am

Re: Re: Re:
I think that Paris address is a hotel, specifically it's an all-suites hotel aimed at business travellers staying for a month or two.
[ link to this | view in thread ]
Scotchorama, 3 Jul 2014 @ 6:41am

Not registered
Just checked the French business registry. The French parent company, Descoteaux Boutiques, doesn't officially exist; it has no SIRET/SIREN number. There is no business with that name in France. They're probably just using a mail forwarding service at Avenue de France.
[ link to this | view in thread ]