With the adoption of the Consumer Review Fairness Act of 2016 (CRFA) which became federal law in August of 2016, consumers are now permitted to file complaints in the form of online reviews about companies via social media. Under the new law, no longer shall clauses in contracts exist between a consumer and a merchant wherein a business is able to restrict or eliminate the right of a consumer to leave reviews. Gone is the ability of a business to impose penalties for leaving negative reviews by a consumer. Lastly, under the CRFA, a business has no intellectual or property right in the review or feedback content from the consumer to the business.
In passing the CRFA, Congress realized that the marketplace is dominated by social media and that consumer opinions and thoughts about businesses or products are crucial to another consumer's decision as to whether to buy those same goods, services, or products. The reason behind the rule stemmed from the research done by Congress that showed that an honest and forthright social media marketplace was, in the end, better for both consumers and businesses. The federal law emanated from a case where a toy company demanded a customer to remove a negative online review. The customer refused to do so and the company, in response, demanded a $3,500.00 penalty from the consumer that was allowed under its terms of service to the consumer.
There is no doubt that there is a large social benefit to be obtained for consumers who are now able to articulate their opinions as to their experience with a product, good or service. We know that, in most cases, such input can be of critical importance to another consumer in determining whether to avail him or herself of that very same product. It is these reviews, both negative and positive, that force millions of dollars in different directions depending on whether the review is either positive or negative. Consumers have now achieved a certain status in the marketplace and more of a leveling of the playing field has occurred. Finally, consumers can take a deep breath knowing that their opinions will not automatically result in a monetary penalty or legal action once the negative review is posted.
The scales may have tipped too far in the other direction, however. There is has been an onslaught of negative reviews by consumers who now feel that the law allows them to say just about anything over social media as it pertains to a business' product, service, or goods. A consumer's right to air his or her grievances with a few keyboard strokes has created a certain imbalance that some see as inequitable. Businesses of all kinds, large and small and local and national are finding it more and more difficult to fight back against the ravage of all these negative reviews.
Not only are many of these reviews negative but, in many instances, many of them qualify as constituting commercial disparagement under most state's laws. So what can your business do if you are faced with not only unfavorable reviews but reviews that are just downright false, malicious, and designed for a purpose other than to educate other consumers? Here are some talking points for you to consider:
1. Rather than threaten your reviewing customer, the best way to avoid negative reviews is to offer the best service in the first place. Go out there and ask your customers what they like and do not like about your product, services, or goods. More often than not, behavioral studies of people who issue negative reviews emanate from the fact that the consumer thought that the business was not paying attention to its needs and found that the posting of a negative review was the only means that that consumer had to let the business know how he felt. If you detect a negative experience with either a customer or vendor be proactive and nip the problem in the bud. By doing this, you are giving that customer less motivation to go online and issue a negative review.
2. Issue a cease and desist letter. For those consumers whose reviews are over the top, the CRFA does not prohibit a business from taking legal action to protect its online reputation. All of the same protections under both state and federal laws that were in place before the CRFA are still in existence today.
3. Make sure that your company no longer has form contracts that include language prohibiting a consumer from entering an online review. As well, any provisions which formerly allowed your business to invoke a monetary penalty in the event a negative review was issued by a customer should be stricken.
4. Remove any provisions in your contracts with consumers that in any way restricts people from sharing their reviews online.
5. Zealously enforce your legal rights against another party if the language utilized rises to the level of commercial disparagement. Your company still has the right to sue for libel, invasion of privacy, and a host of other intentional torts against a consumer whose motivation was something other than to issue an honest review. In many instances, consumers are using the law to gain leverage over businesses in order to exact a monetary settlement. The Katz Law Group has utilized restraining orders and injunctions, when necessary, to protect our client's financial and business interests in these very situations.
6. If the information posted by a consumer in any way involves confidential or private information the law has penalties for such conduct.
7. If the information posted is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or inappropriate with regard to race, gender, sexuality, ethnicity or other intrinsic characteristics then legal action is appropriate.
8. If the review is unrelated to the business' product or services you should enforce your interests accordingly.
9. The consumer is provided no protection if the review is clearly false or misleading.
10. Enlisting the services of a reputation management firm to assist your business in keeping up with the flurry of social media has also been of assistance to a number of our firm clients.
Trying to maintain your online business reputation can be a daunting challenge in today's social media world. With deep experience in this area, the Katz Law Group can provide your business with effective and practical strategies when faced with these challenges. We take protecting your corporate brand and image seriously. Please feel free to call us at 508-480-8202.