Why The European Commission's Consultation On Corporate Sovereignty Is A Sham (And How To Respond To It Anyway)

KlearGear Told To Pay $306,750 For Bogus Attempt To Shakedown Customer For Bad Review

from the but-can-they-collect? dept

Thu, Jun 26th 2014 8:32pm — Mike Masnick

We've been covering the story of Kleargear for a while now. As you may recall, the company sneakily put a $3,500 "non-disparagement clause" in its online terms of service, saying that you agreed to pay that much if you gave the company a negative review. Jen Palmer left a negative review over some stuff that her husband, John, bought that they never actually got. This happened long before the non-disparagement clause existed. Despite that (and the dubious enforceability of such a clause anyway), Kleargear demanded the $3,500. And when the Palmers rightly refused to pay up, it sent the amount to a collections agency and messed up the Palmers' credit, causing significant hardship for the couple. At this point, Public Citizen stepped in to sue KlearGear. For a while KlearGear played a disappearing game. It didn't respond to Public Citizen's initial letter, then it ignored the lawsuit (and put back the non-disparagement clause on its website after briefly taking it down). Based on that, the Palmers got a default judgment against the company.

Then, suddenly, a "representative" of the company named Vic Mathieu magically appeared spouting all sorts of nonsense and trying to defend everything the company had done. Of course, neither KlearGear nor it's apparently French-based owner Descoteaux Boutiques actually did anything in court, and thus, the court has ordered KlearGear to pay up to the tune of $306,750 in both compensatory and punitive damages.

Of course, collecting on that award may take some work. It's still not entirely clear who is behind Kleargear, statements from Vic Mathieu notwithstanding. It's possible that the company is really owned by this French company, which will make collection difficult for a variety of reasons. Or that whole thing may be a sham in itself, meaning that no one knows who's actually involved at all. Chances are, the Palmers are unlikely to see much money here. Still, what amazes me is that Kleargear itself is still in business. I'm somewhat surprised the company didn't just up and move to a different domain. But, instead, it's still there. One hopes that people doing some shopping do some searches first on the company to find out about its practices.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: default judgment, jen palmer, john palmer, non-disparagement clause, vic mathieu
Companies: kleargear

35 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Anonymous Coward, 26 Jun 2014 @ 8:53pm

It's a Shame...
...that folks need the assistance of such as the Public Citizen, the EFF, the ACLU, your local TV stations Consumer assistance, etc.

It is also a shame that regardless of the courts verdict in this instance, their credit rating was harmed by an overseas fraudster, as well as the years (?) of hardship, and there is not much that can be done about that, especially since it is likely they will not see dime 1 of that judgement.

The credit reporting system is dead broke. Folks make up sh*t and report it, and the system just accepts it. Something is wrong in Skokie.
[ link to this | view in chronology ]
- Anonymous Coward, 27 Jun 2014 @ 12:03am
  
  Re: It's a Shame...
  Really I consider the credit rating system a form of fraud in the first place. Namely it is one of the top ten biggest it is all about how good of a cash cow you are which has no business being mixed with ability to pay. In fact it is the complete fucking opposite, since if you don't spend money you can pay it off far better!
  [ link to this | view in chronology ]
- Anonymous Coward, 27 Jun 2014 @ 5:57am
  
  Re: It's a Shame...
  ...that folks need the assistance of such as the Public Citizen, the EFF, the ACLU, your local TV stations Consumer assistance, etc.
  
  Indeed. Getting civil justice is for the rich.
  [ link to this | view in chronology ]
Dan Hazelton, 26 Jun 2014 @ 9:00pm

Troublinh
KlearGear.com has claimed, now, to have been founded and run from three different US States - though at least one of them (Michigan) has no listing of the company in its records.

If you check the wayback machine, you'll see that, until around February 2012 (only a few months before the non-disparagement clause was added) the company claimed to be from Texas, then until some time this year they claimed to be from Michigan (inc.com has them listed as one of Michigans fastest growing companies!) and now they claim to be from Delaware.

This is most definitely *NOT* common behavior for a fully legal company, nor is the way that the parent company DBS acting in any form normal for a fully legal company.
[ link to this | view in chronology ]
Anonymous Coward, 26 Jun 2014 @ 9:23pm

If this were a movie and Techdirt articles were the inspiration for the script, KlearGear would be revealed in the end to be owned by Prenda Law.
[ link to this | view in chronology ]
- Berenerd (profile), 27 Jun 2014 @ 4:58am
  
  Re:
  DAMN YOU!!! I was gonna say that! I had that idea first! I am suing for copyright infringement!
  [ link to this | view in chronology ]
  - Anonymous Coward, 27 Jun 2014 @ 9:00pm
    
    Re: Re:
    I have a string of dummy corporations set up to obfuscate and insulate myself, so good luck with that lawsuit. Also, you're clearly defaming me and expect to hear from my lawyers who might also be me pretending to be my own lawyers.
    [ link to this | view in chronology ]
Anonymous Coward, 26 Jun 2014 @ 10:10pm

French
need say more?
[ link to this | view in chronology ]
- Anonymous Coward, 26 Jun 2014 @ 11:27pm
  
  Re: French
  Are you trying to imply that they are running away in the face of conflict because they are a French company?
  [ link to this | view in chronology ]
- DannyB (profile), 27 Jun 2014 @ 7:50am
  
  Re: French
  KlearGear is to customer service as the Maginot line is to defense?
  [ link to this | view in chronology ]
  - Anonymous Coward, 27 Jun 2014 @ 11:21am
    
    Re: Re: French
    impenetrable from the front but easy to go around?
    [ link to this | view in chronology ]
Whoever, 26 Jun 2014 @ 10:40pm

Domain name
They could start by seizing the domain name.
[ link to this | view in chronology ]
sneaking.ninja, 26 Jun 2014 @ 11:00pm

meanwhile
meanwhile in europe, kleargear are gonna get in truble if they keep this up mainly due to newly european law that just got into effect, if they truly are a french company

the new law basicly forces them to tell european customers that hidden $3,500 in the terms lol

The Directive on Consumer Rights (2011/83/EC)
http://ec.europa.eu/justice/consumer-marketing/files/crd_arc2014_factsheet-consumer_general_en.pdf
ht tp://ec.europa.eu/justice/consumer-marketing/rights-contracts/directive/index_en.htm
[ link to this | view in chronology ]
- G Thompson (profile), 27 Jun 2014 @ 1:07am
  
  Re: meanwhile
  Thanks for that.. had been looking for a basic rundown in non legalese English for a while now.
  [ link to this | view in chronology ]
Anonymous Coward, 26 Jun 2014 @ 11:24pm

"One hopes that people doing some shopping do some searches first on the company to find out about its practices."

Then there would be nowhere left to shop except to do so as you vote, the least evil.
[ link to this | view in chronology ]
zip, 26 Jun 2014 @ 11:28pm

shotgun approach
Like many dodgy online companies, KlearGear likely has multiple websites (and domains) that it operates. It's not uncommon for companies to operate dozens of sites that basically sell the same thing. The KlearGear brand may be only one tentacle of a large unseen monster.
[ link to this | view in chronology ]
- compgeek (profile), 27 Jun 2014 @ 6:40am
  
  Re: shotgun approach
  Cthulhu has arisen from R'lyeh once more apparently.
  [ link to this | view in chronology ]
Anonymous Coward, 26 Jun 2014 @ 11:41pm

How did KlearGear manage to forward the debt to a collection agency in the first place? Is a person's name and address all you need to ruin a person's credit because of false debt claims? If such a thing is possible then there need to be stricter regulations against that sort of thing.
[ link to this | view in chronology ]
- That Anonymous Coward (profile), 27 Jun 2014 @ 5:38am
  
  Re:
  And a statement that they owe you money.
  The debt collector doesn't have to verify all of the claims, merely have the proper paperwork in hand.
  Kleargear represented it as a valid debt and the system went forward.
  [ link to this | view in chronology ]
- Anonymous Coward, 27 Jun 2014 @ 7:28am
  
  Re:
  there are some good consumer protections against this...write a standard form letter disputing the charge and forward it to a few agencies...but...all of the sudden, you are spending your time cleaning up a mess instituted because you wanted something unique
  [ link to this | view in chronology ]
bugmenot (profile), 27 Jun 2014 @ 12:21am

Search for KlearGear reviews? Why do that?
Naaa, they'll just sign a "Forget about me Google" form and the bad reviews will magically go away. It'll be easy for them to sell to the next customer since there are no bad comments -- EVER.

OMG: Why the EU courts didn't leave google alone and go after the actual source site? THEN if google doesn't update its index in a reasonable time (months, not seconds), THEN you go after google.

It's just like fortune tellers and members of government: count or inflate the number of times you're right but completely ignore and discount the number times you're wrong. ("Oh, I misspoke; I mean you just didn't hear me correctly to start with. You should be more accurate with your reporting.")
[ link to this | view in chronology ]
- Digger, 27 Jun 2014 @ 7:54am
  
  Re: Search for KlearGear reviews? Why do that?
  ahhh - but the "right to be forgotten" is only for citizens, and in the EU, corporations aren't citizens.
  
  At least one government entity gets it right.
  [ link to this | view in chronology ]
  - AnonyBabs, 27 Jun 2014 @ 11:22am
    
    Re: Re: Search for KlearGear reviews? Why do that?
    Don't worry, I'm sure that's covered in TAFTA/TIPP.
    [ link to this | view in chronology ]
  - art guerrilla (profile), 27 Jun 2014 @ 11:43am
    
    Re: Re: Search for KlearGear reviews? Why do that?
    just you wait, 'enry 'iggins, just you wait ! ! !
    [ link to this | view in chronology ]
- William Silverstein (profile), 27 Jun 2014 @ 9:35am
  
  Source site location.
  The source site location may not be in the EU. If the site is in the USA and the people running the site does not have business in the EU, they don't really have to deal with that directive.
  
  Earlier this month, an EU citizen demanded that references to him be removed from this web site. That did not work too well, as you can read at https://www.techdirt.com/articles/20140617/06515127602/techdirt-receives-its-first-right-to-be-forgo tten-request.shtml
  [ link to this | view in chronology ]
andypandy, 27 Jun 2014 @ 3:21am

track them identify them
I think that there are people out there who could track these fraudsters very easily, all it takes is someone who understands the working of the internet"not me" to track them down and get the owners identity and his/her details so that there is someone to go to and to get there money from, I am sure with a 20%-50 fee for anyone finding and getting the fraudsters to pay up would encourage many internet "hackers" to find them.

I can see it in the near future, bailiffs arriving at their front door and presenting them with a court order to repossess everything they have including homes,cars,boats etc.

Now that is when we need to have police with cameras recording the people who are involved.
[ link to this | view in chronology ]
- Bt Garner (profile), 27 Jun 2014 @ 4:10am
  
  Re: track them identify them
  Just track the money. When these scammers make a sale (sic), that money goes somewhere, and someone (the credit card company) can figure out where.
  
  It may not be the end of the money trail, but I'll wager that you can find out a fair amount with that info.
  [ link to this | view in chronology ]
  - jen (profile), 27 Jun 2014 @ 7:30am
    
    Re: Re: track them identify them
    that option has already come up. :)
    
    honestly, we've got several options on collections, and public citizens will be figuring out how best to handle the next steps.
    [ link to this | view in chronology ]
    - William Silverstein (profile), 27 Jun 2014 @ 9:19am
      
      Re: Re: Re: track them identify them
      There are quite a few ways to collect. I have done this with my spam lawsuits, even though the company was overseas.
      
      Contact me via my web site for more information.
      [ link to this | view in chronology ]
Sergio, 27 Jun 2014 @ 5:23am

collection agency
Why not sue the collection agency it look as if they are part of the problem.
[ link to this | view in chronology ]
- Quiet Lurcker, 27 Jun 2014 @ 7:07am
  
  Re: collection agency
  And offer them a sweetheart deal: Deny it and or fight, and get cleaned out to the tune of 150% of any nominal damages that might be due. Or, acquiesce, and only pay 95% of any damages. Finally (and here's the sweetheart bit) admit wrong-doing, pay 50% of nominal damages; hand over the names and addresses of whoever referred the matter to you in the first place; for all similarly situated cases, drop the matter, report your error to the credit bureaus, spend $X (a fairly large amount) per person to clear up their reputation; and insert terms into their contract that from now on any client who tries the same stunt will pay out the full costs and fees of litigation, reputation clearance, etc. etc. for the agency AND the person being collected against.
  [ link to this | view in chronology ]
- jen (profile), 27 Jun 2014 @ 7:33am
  
  Re: collection agency
  the debt collection agency was named in the original lawsuit as one of the defendants. however, UNLIKE kleargear, they stepped up and responded. we basically told them "tell the credit bureaus this debt is false, turn over everything you have on kleargear's whereabouts, or you get sued too." fortunately, they did the right thing and realized the debt was bogus. they were very helpful in cleaning up john's credit report.
  
  since they came through, we dropped them from the suit and continued after kleargear for their bad actions.
  [ link to this | view in chronology ]
  - Easily Amused (profile), 27 Jun 2014 @ 11:06am
    
    Re: Re: collection agency
    congrats on the win, here's hoping you actually get some cash out of these assholes.
    [ link to this | view in chronology ]
alternatives(), 27 Jun 2014 @ 8:11am

Still, what amazes me is that Kleargear itself is still in business. I'm somewhat surprised the company didn't just up and move to a different domain.

Who says it hasn't done that? Plenty of Internet retailers out there - why couldn't it have taken the good selling base, switched banks, add some new crap with an updated code base and picked a new location?
[ link to this | view in chronology ]
That One Guy (profile), 27 Jun 2014 @ 9:49pm

What's good for the goose...
Can't help but think, it would be pretty funny, as well as fitting, if the fine was relayed to a bunch of collection agencies, let them hunt down and hound the company and those behind it, in a nice little reversal of things.
[ link to this | view in chronology ]