How writing a review could end up hurting your wallet

We all know that we should carefully read the terms and conditions of every agreement and every line of every contract before we sign it, but we don’t. It’s easier to jot down a signature or click “accept.”

By doing this, consumers could be signing away the right to complain and not even know it, thanks to the rising use of non-disparagement clauses in contracts.

One Texas couple posted a negative review on Yelp about a business called Prestigious Pets. The business sued, claiming the review violated a non-disparagement clause in their contract and IS seeking up to $1 million in damages. Prestigious Pet’s page on Yelp shows a “Consumer Alert: Questionable Legal Threats” message that warns consumers the business has sued a reviewer.

These clauses prohibit consumers from making negative remarks, truthful or not, about a company through a public medium such as Yelp, Google review or a BBB review. If you break the clause, you could be sued for hundreds or thousands of dollars by the business.

One consumer said her signature on the dotted line of an application to rent a property had come back to haunt her. A particular clause in the application denied her the ability to write an honest review of how the company was treating her. Not only had she never heard of the clause, she didn’t even notice it when she signed. The clause said she was “prohibited from making disparaging remarks/statements or publications regarding the other to any third party” by posting on any review based website.

The consumer we spoke with never knew she had signed the clause until after she filed a complaint with BBB. After filing the complaint, the consumer said she received a demand of removal letter from the business. The document stated the complaint fell under their agreed non-disparagement clause. If the consumer did not take down the complaint, the business would get their lawyers involved.

“We eventually just settled on the issue and we didn’t want to go to court,” the consumer said. However, the threat of losing hundreds of dollars scared the consumer enough to rethink how she looks at anything she signs.

With the increase of websites that allow customer reviews, businesses use the clauses as a sort of protection against consumers who might lie about the service that company has given. They appear in a variety of contracts including professional service and property agreements, but they are not limited to a specific industry. The clause essentially silences consumers even when what they are saying is truthful.

Currently, there is no law in Georgia that prohibits businesses from using non-disparagement clauses in contracts, only California and Maryland have such laws in place.

The Federal Trade Commission made a stand against non-disparagement clauses after they sued Roca Labs in 2015 for including the clauses in their contracts. The FTC said in a press release that the clauses harmed consumers by barring them from making truthful statements about the company’s product.

There is a possibility that a federal law could be passed restricting the use of non-disparagement clauses. The U.S. Senate passed the Consumer Review Freedom Act in December of 2015. The bill would prohibit the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered. Additionally, the bill would protect the right of consumers to express truthful criticism. The next step is for the U.S. House of Representatives to consider the bill. The U.S. House passed a similar bill called the Consumer Review Fairness Act on Sept. 12.

BBB accredited businesses are not allowed to use non-disparagement clauses, which are not compatible with BBB’s Standards for Trust.

“BBB believes that customer opinions, whether positive or negative, can be valuable information both for businesses and for their future customers,” said Vice President Richard Woods, general counsel for the Council of Better Business Bureaus. “We discourage using these clauses to stifle expression as contrary to BBB’s vision of an ethical marketplace where buyers and sellers trust each other.”

BBB does inform consumers of businesses that use these clauses by disclosing the information on their BBB Business Review page.

So, what can a consumer do to protect themselves?

BBB offers these tips:

Read your contract. What can end up hurting a consumer is not fully understanding or reviewing a contract. The clauses are sometimes stuck in long contracts or in online contracts that require you to accept what the document entails. Ask the business if there are any clauses that would limit your ability to truthfully give your opinion. Don’t forget to completely read the contract as well.

Ask questions. Ask the business why the clause is in the contract. Make sure you understand what happens if you break the clause or if you can back out of the contract if you feel uncomfortable a couple days after signing it.

Negotiate with the business. Try to see if the clause can be removed. Seeking legal advice about the contract can ensure everything is done properly.

Walk away. You always have a choice. The clause may indicate the company is worried about a consumer saying something truthful about their services or business practices. Decide whether the clause is something you are comfortable with signing. If not, choose another company who can offer the same service.

For more trustworthy BBB tips, visit BBB.org.

This story was originally published October 3, 2016 at 2:28 PM with the headline "How writing a review could end up hurting your wallet."