KlearGear Rep Delivers NEW 'Final' Statement About Company's Legal Battle, Trashes Complaining Customers It Hit With A $3,500 Fee
from the unbridled-jackassery dept
KlearGear, via Vic Mathieu, apparently likes the hole it's in, but is still finding it a bit too cozy for its liking. In an amended "final" statement sent to Ars Technica, Descoteaux Boutiques' (apparently overseas owner of KlearGear) Mathieu digs deeper. (h/t to an anonymous Techdirt commenter)
The expanded statement below concludes our public comment about the case of Palmer vs. Kleargear.com.I thought this was concluded yesterday...
After the payment method of John Palmer was declined for an order in December 2008, he was belligerent toward our customer care staff and threatened to defame Kleargear if he did not receive free merchandise and other consideration.Even if this is true (and there's no reason to believe it is until Mathieu provides some proof of this), this doesn't explain why nothing was pursued until 2012 (something Mathieu points out in his previous "final" communication), conveniently after KlearGear added its Non-Disparagement Clause.
Such a customer behavior is rare but it has become a increasing problem for many companies today. DBS' head of retail for North America, Lee Gersten, spends nearly half of every year in the United States and Canada and cites this problem as one of the reasons that we started to eliminate Kleargear.com's social media channels in 2012.First off, shouldn't the North American "head of retail" spend more than "nearly half" the year in the area he services? Secondly, the social media channels didn't go dead until late 2013, shortly after the Palmers' story went national. Either KlearGear's social media handlers are grossly incompetent or this is nothing more than desperate revisionism.
While buySAFE protects our customers' interests on every transaction and can confirm that our rate of dispute is below 0.1%, less than 1 in 1,000 customers, this track record is not public and dissatisfied consumers have a stronger voice.I've reached out to buySAFE for confirmation on this claim. I will update when an answer is received.
The non-disparagement agreements are not new among employees, partners and customers across the globe.The fact that other stupid companies and people exist doesn't make KlearGear's policy any less stupid.
There is no contract of adhesion; Kleargear.com operates in the consumer discretionary sector, which does not provide essential services, so that consumers are free to shop elsewhere. Our sales contract is enforceable under the laws of the United States because business transactions are exempt from First Amendment rights.Except that you would need to complete a sale for it to be enforceable (and even in this case, it's far from a foregone conclusion). The Palmers never received the items they ordered, so no "sale" was actually made. It takes two parties to make a sales contract enforceable, and KlearGear didn't hold up its end.
In our opinion, the arguments and the actions of Public Citizen's Scott Michelman are irresponsible and uninformed, at best, and constitute an abuse of process at worst. Mr. Michelman seems to be an unscrupulous attorney who has made considerable efforts to incite a biased "media storm" to hide this fact.I'm sure angering the opposing attorney is sound business decision. [eyeroll] And Michelman had nothing to do with the "media storm." Since Mathieu can't seem to keep up, I'll provide a short point-by-point timeline.
1. Palmers order -- but never receive -- merchandise. (2008)
2. Jen Palmer posts negative review at Ripoff Report. (2009)
3. KlearGear contacts the Palmers to let them know they're being fined $3,500 for the negative review. (2012)
4. Matt Gephardt of KUTV investigates. (2013)
5. Story goes national, a.k.a. the "media storm." (November 14, 2013)
6. Public Citizen sues KlearGear on the Palmers' behalf (November 26, 2013)
First the storm -- then the lawsuit.
Despite this tactic, or perhaps because of it, Kleargear's revenues in the third calendar quarter of 2013 increased by 124% compared to the same period in 2012 - and revenue for the year to date in 2014 is up 72% compared to 2013.Citation, please.
If DBS is presented with an order for judgment on the above-mentioned civil action, which is void on the basis of defective service alone, we will not honor it.Might want to reread the Hague Convention. As pointed out by a commenter in the last article, it appears DBS was properly served at KlearGear's Michigan address.
"Another proper method of service is to serve a subsidiary corporation. ... Service within the forum state is not governed by the Hague Convention."Mathieu continues:
In addition, such an invalid judicial resolution will not serve to dissuade Kleargear or other retailers from binding their customers to non-disparagement terms.Every company is free to be as stupid as they want to be...
If and when Mr. Michelman and Public Citizen decide to conduct themselves properly, we will participate in this dispute as any honorable corporate citizen would.You wouldn't know the meaning of the word "honorable" if it slapped you with a $3,500 non-enforceable fee four years after it failed to deliver purchased items.
Mathieu claims a stellar customer service record, but its customer service has been routed through Zendesk (who I've also reached out to for comment/information) and its policies related to customer service matters range from the questionable to the abusive.
In addition to the $3,500 Non-Disparagement Clause, KlearGear has, over the years, also charged a non-refundable "Dispute Fee" to customers' credit cards, which is deployed in case of a chargeback or a refund request. If KlearGear is unable to collect the Dispute Fee, it will:
forward your account to our external collections agency and assess an additional $500.00 Collection Fee.Any dispute also carried with it the chance that KlearGear would report the customer to BadCustomer.com. The only thing preventing KlearGear from doing this today is the fact that BadCustomer.com was shut down by the FTC for participating in a billing scam that extracted $275 million from credit card users' accounts over a 4-year period. Here's how its chargeback policy works in practice.
Due to a recent dispute filed with your credit card bank in connection with your Order #29296 on 11-Sep-2012, you now owe an additional $50.00 per our Chargeback/Dispute Policy that you agreed to at the time of your purchase (available here: http://www.kleargear.com/help.html). If you do not pay this fee within 30 days of the date of this notice, your delinquent account will be forwarded to our collections firm, credit bureaus TransUnion, Experian, and Equifax, and you will owe an additional $500.00 Collections Fee per our binding sales contract.A look at the pre-Jen Palmer complaints to Ripoff Report shows a distressing commonality: KlearGear likes charging credit cards -- shipping products and/or answering customer complaints, not so much. Multiple customers report that phone calls and emails went unanswered. But if someone decides to issue a chargeback after waiting weeks for their purchase, KlearGear's "legal department" swiftly springs into action to threaten users with hefty fees and damaged credit ratings.
To pay this fee, please fax a copy of both sides of your credit card to our Legal Department at (210) 745-421 and reference your Order #29296. Alternatively, you may send a check to us at the address below.
We regret that we must charge this dispute fee, however your dispute violated our sales contract and was premature and without merit. Once again, please be aware that should you dispute your chargeback fee or later cancel a check payment you will incur additional chargeback and collection fees. A copy of this message is being provided to your credit card bank in connection with this dispute and the related chargeback dispute fee. Whether or not you cancel your dispute with your credit card bank, this dispute fee is not refundable.
Please be advised that you will not receive another notice regarding this debt before your account is forwarded to our collections agency.
Regards,
Stephen Gutman
Legal Department
KlearGear.com, Inc.
Until Mathieu is actually willing to provide some proof of the claims he's made, the company's online reputation will continue to speak for itself. KlearGear's relationship with its customers is toxic. Mathieu has invited everyone to shop elsewhere. I say take that offer.
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Filed Under: jen palmer, john palmer, vic mathieu
Companies: descoteaux boutiques, kleargear
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Seems pretty 'Klear' to me...
Or in even simpler terms:
Non-disparagement clause = Go elsewhere, you're not going to be getting your money's worth here.
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Re: Seems pretty 'Klear' to me...
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Re: Re: Seems pretty 'Klear' to me...
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Re: Re: Re: Seems pretty 'Klear' to me...
I may have been the first to read that in Zoidberg voice, but I won't be the last.
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Re: Re: Seems pretty 'Klear' to me...
In this particular case, it would appear that they have hid them away in the future.
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"Warning, this product manufacturer demands you agree to a non disparagement clause"
Sort of like the one on a pack of cigarettes.
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Re:
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How is this company still in business?
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Re: How is this company still in business?
Assuming you get it at all. Keep in mind the 'pebble' that started this particular avalanche was due to someone ordering something and never having it arrive, no matter how much they tried to contact the company, and the complaint they filed because of it.
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Re: Re: How is this company still in business?
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Genuinely responding to the court like it mattered would cost money.
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It's certainly fraud to offer something for sale, accept payment, and then not deliver the merchandise. The whole operation sounds like a scam from top to bottom, dressed up to attempt to sound like a reputable company.
The last thing I would do is give out a credit card number to these yoyos. They've already shown they are quite willing to pad the bill with extra charges and then attempt to make it sound legal. Again, nothing but a scam.
Of course there will be other people who didn't get the word and attempt to do business until these people are forced to actually pay up for the damages they have caused their customers.
I can sure tell you one thing. I won't be a customer of theirs. Now let them charge me for that opinion of their business practices as I have never been to their site and will never go there. Nor will they ever get any closer than they are now to my money, which is a long way away.
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Response to: Anonymous Coward on May 23rd, 2014 @ 12:35am
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Re: Response to: Anonymous Coward on May 23rd, 2014 @ 12:35am
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don't dis the first
In Cohen v Cowles Media (1991), the Supreme Court found that the First Amendment did not prohibit the recovery of damages “under state promissory estoppel law, for a newspaper's breach of a promise of confidentiality given to the plaintiff in exchange for information.”
In reaching that decision, though, the court first found that there was indeed state action, once the machinery of the courts became engaged.
Then, among other distinctions, the court distinguished the case from Hustler Magazine, Inc. v. Falwell, (1988), observing:
A business non-disparagement clause seems to look towards protecting reputational interests. But it may attempt to evade “the strict requirements for establishing a libel or defamation claim”.
(H/T Alan E. Garfield, “Promises of Silence: Contract Law and Freedom of Speech”)
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Re: don't dis the first
How is this even close to being applicable here?
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Re: Re: don't dis the first
The extension of state action from promissory estoppel to contract is suggested in the paper I linked.
Consider the overall environment, as further described by KlearGear's statement:
In that overall environment, California attorney Seth Heyman recently wrote on “Using terms and conditions to prohibit bad reviews”. He concluded his short piece by saying
Now, California Assembly 2365 would declare these non-disparagement clauses unlawful as a matter of public policy. But that would be just in California, and only if the bill is enacted.
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Re: Re: Re: don't dis the first
Followup: The Garfield paper appeared in the Cornell Law Review in 1998.
In 2007, the Sixth Circuit decided Compuware v Moody's Investors Services, and in a carefully-limited holding, applied Sullivan's actual malice standard to a contract claim:
Nevertheless, despite the limited holding of this case, it does reject the idea that there is a bright-line distinction between quasi-contract and contract: “The Law Is a Seamless Web”.
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Reading comprehension?
He said they started eliminating Kleargear.com's social media channels in 2012. As a market-oriented business, that meant disposing of its inventory at market value, in this case their reputation. They might have been overselling it a bit, but you can't deny that they managed to get it down to zero before closing time.
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Are any of these people real?
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No misuse possibility in sight.
Seems legit.
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From henceforth, they will be called StearKlearGear.
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Reminds me of a used parachute salesman. "We haven't had a single complaint!"
Well, yeah, dead customers can't complain, and neither can ones who are threatened with a $3,500 "fine". You can *never* trust the complaint record of a company with such a clause, which means you can't trust it's reputation.
A non-disparagement clause in a retail contract means "Shop elsewhere"
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Other storefronts?
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To be fair....
Imagine a psycho customer, an imagined slight, and a vendetta to trash the vendor (in this case the victim.) This is what NDCs are supposed to be for, club-fisted though Kleargear's use of it. And don't pish posh the idea, either. Any perusal of the early days of the Web reveals this rhetorical situation to be (or have been) quite real. I think everyone's take on KlearGear's owners as egocentric bully scam artists is right on the money. I think NDCs need to be written in more restricted, fairer language. However, I don't think you can judge a company on merits solely by the fact they have one. It ought to be one of several factors carefully scrutinized in your judgements.
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Re: To be fair....
Why doesn't this situation fall inside the existing torts of defamation, libel, etc.?
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Re: Re: To be fair....
New law doesn't always break new jurisprudent ground, sometimes it streamlines it, or focuses it, or clarifies it in cases where the more general admonition is neither efficient nor expedient.
Moreover, the good old internet provides additional questions of identity, proximity, and fallibility - as this case amply showcases.
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Re: Re: Re: To be fair....
You misread the thrust of my question. The core of the question is whether truthful statements on matters of public concern are to be suppressed by the power of the state.
What does a contractual non-disparagement clause really buy? How does “disparagement” differ from defamation? Is truth a defense to a claim of “disparagement”?
Those are core questions. At the edge, the questions go much further. Just for one instance among many—off the top of my head: Might sworn testimony before a Congressional committee ever amount to “disparagement”? For which liability may attach? Or do all reasonable contracts privilege that sworn testimony before Congress?
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Re: Re: Re: Re: To be fair....
The initial triggering transaction was one covered by civil law. This need not and does not directly involve the State as a party. It is, at its basis, "business law" in which contracts may have been abrogated, but no law of the state was presumed, within the context of that abrogation, to have been broken. NDCs exist because there is no certainty that a given applicable statement is, in fact, truthful. It is a determination between NGEs, again, no state involvement required.
Contract "law" is only enforced via contract. Defamation does not rise to the level of criminal law, thus the penalties for it are set, either in the contract, or in the penalty phase of a finding and judgment supporting one or the other party to whom the contract applies. Just as infractions thereof don't rise to a level beyond civil law, neither does it do so as a legal matter of PUBLIC concern, whoever much we may decry it.
All taken together, and though civil law is bracketed within the governmental framework of laws, it is not suppressed or manipulated by, as you say, the power of the State. Contract law is as we see it because it endeavors to protect parties beyond the scope of actual legislated law. Finally, ridiculous as it may seem, it is held to be in force until challenged. Thus if my contract says if you step in a crack on my sidewalk you owe me $100, it is presumed to be correctly drafted…until challenged. Thus all the crappy contracts and suspicious "fine print" we see.
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Uh, no.
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Re: Uh, no.
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Re: Uh, no.
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Re: To be fair....
"I don't think you can judge a company on merits solely by the fact they have one."
I do, and I will judge companies that have such language in their terms of service very harshly regardless of what their intentions are. In effect, what such companies are saying is that if you want to do business with them you have to give up some free speech rights. That's a line way, way too far.
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Re: Re: To be fair....
The joke might be on them if there's criminal or multiple-damages penalties in some states or countries they operate in for such terms. There really should be financial penalties for having a contract like this knowing that more than a few of your customers will just click through.
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Is KlearGear any more than one person?
I haven't spent as much time researching this as the obsessive compulsive side of myself would like, but I have googled just about every new name that has popped up associated with KlearGear in their various press releases. There is only one person who seems to come up with a social media presence, and that is Will Bermender, the CEO of Chenal Media the supposed owner of Kleargear, who has a detailed profile on LinkedIn
http://linkd.in/Ssv0Jv
One of the original articles on Rip Off Report suggest as much, noting Bermender does use aliases:
http://bit.ly/1vSP8UB
I think analyzing the law is pretty moot at this point -- if journalists, or even casual observers, are really interested in this story, they'll start trying to find out who the man is behind the curtain, and how they can continue to get away with such a shoddy business for so long.
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Re: Is KlearGear any more than one person?
KlearGear's rather incredible claims of lack of service seem entirely consistent with some yahoo trying to pull a fast one by making up a supposed foreign owner of the company. And making up a fake owner would appear consistent with the kind of seemingly sociopathic actions of KlearGear in regards to the non-disparagement claus, and never backing down even when KlearGear's position is clearly untenable.
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Re: Re: Is KlearGear any more than one person?
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This doesn't work when my five-year-old tries it, why do these guys think it will work for them?
Once they've sued you, you're participating whether you like it or not. Judges take an awfully dim view when parties to a suit stamp their feet like a petulant child and scream "I can't hear you, I can't hear you!"
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Re: This doesn't work when my five-year-old tries it, why do these guys think it will work for them?
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How are KlearGear's terms of service not adhesive? The fact that you can choose to shop elsewhere does not render an unsigned, non-negotiable, take-it-or-leave it contract any less adhesive. If a physical retail store could not get away with such terms, why should a web site?
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