How writing a review could end up hurting your wallet

where-s-the-money-gone-1513359

Better Business Bureau takes a look at how non-disparagement clauses in consumer contracts can hurt customers

Most consumers don’t read the fine print on everything they sign. We all know that we should carefully read the terms and conditions of every agreement and every line of every contract, 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.

Such is the case for one Texas couple out of Plano. An article written by CBS 11 DFW said the Plano couple posted a negative review on Yelp about a Dallas business called Prestigious Pets. The business sued claiming the review violated a non-disparagement clause in their contract and are 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.

Non-disparagement clauses are sometimes used in contracts between consumers and businesses, and the use of these clauses is on the rise, according to Professor Emeritus Richard Alderman, who serves as director of consumer law at the University of Houston Law Center. These prohibit consumers from making negative remarks, truthful or not, about a company through a public medium like 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, who spoke on the condition of anonymity, said her signature on the dotted line of an application to rent a property would 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.

“I really didn’t even pay attention to it to be honest with you,” the consumer said. “It was in the application I had signed so I could rent the property out. The application said it could look up my credit, that the fee was non-refundable, and then the non-disparagement clause was in it, too,” she said.

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.

“I do feel there would be more negative reviews on this business if they didn’t have the clause and am not surprised (the owner) does it,” the consumer said.

According to Professor Alderman, non-disparagement clauses began to appear in consumer contracts with the increase of websites that allow reviews of businesses.

He said businesses use the clauses as a sort of protection against consumers who lie about the service that company has given. They appear in a variety of contracts including professional service and property agreements, but Alderman said they are not limited to a specific industry. What the clause essentially does is silence consumers even when what they said is truthful, Alderman said.

“From a consumer stand point, there is still a problem,” Alderman said. “The threat that if you don’t take this down you would owe me $50,000 has a tendency to work.”

Currently, there is no law in Texas that prohibits businesses from using non-disparagement clauses in contracts. Only California has banned businesses from placing non-disparagement clauses in consumer contracts.

BBB contacted the Texas Attorney General’s Office to see if any official legal opinion has been issued. According to a spokesperson, none have been issued or requested. The AG’s office did say they encourage consumers to review contracts carefully and to submit a complaint to the agency if a consumer feels they have been misled.

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

So what happens if you sign a contract or agreement with a non-disparagement clause? Not much, according to Alderman. You can sue the company; however, he said you have to factor in if you can win the lawsuit and if you want to get into one. Alderman also said first amendment protections would not apply to the clause because the dispute involves private parties, not a government impeding speech.

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.

“Reviews offering blunt and honest criticism play an increasingly important role in helping customers select the best products and services,” said Republican Sen. John Thune of South Dakota, who sponsored the bill. “If consumers no longer trust reviews because of strong-arm policies, a key benefit of the system is gone.”

Thune told BBB he believes consumers should benefit from the experiences of other customers. While he understands the concerns businesses have about maintaining their reputations, there are examples of abuse that harm consumers and competing businesses, he said.

The legislation would ensure the practice of putting non-disparagement clauses in consumer contracts doesn’t become common place, Thune said.

“Consumers will be able to breathe a little easier when writing a critical review without worrying that a provision could be tucked into the fine print of a form contract.”

The next step is for the U.S. House of Representatives to consider the bill. Thune said the legislation is a priority for him.

The U.S. House passed a similar bill called the Consumer Review Fairness Act on Sept. 12. Congressman Leonard Lance is sponsoring the bill.

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 and corporate secretary 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. Alderman said if a business has a non-disparagement clause in their contract, you may want to rethink doing business with the company. 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.
Posted in BBB, Uncategorized | Tagged , , , | Leave a comment

FTC: Company tricked business & non-profits in fake directory scheme

mail-box-2-1493112

On Tuesday, the Federal Trade Commission announced a settlement with a Slovakia-based company and two of its executives who took million of  dollars from small businesses and non-profits in the United States and other countries.

According to its complaint, FTC alleged Fair Trade tricked retailers, home-based businesses, local associations and others into paying close to $2,000 annually for a nonexistent business directory. Fair Trade would contact the business through direct mail falsely suggest that consumers had to return a form confirming or updating their contact information for a trade show they had attended or planned to attend.

The only problem was that there was never a trade show.

In December 2014, Fair Trade executive Wolfgang Valvoda  was indicted on mail fraud charges by the U.S. Attorney for the Southern District of Illinois.

Under the settlement, the company and its two executives are banned from entering the business directory business. They also are prohibited from misrepresenting any product or service, attempting to collect payment for their business directory listings, profiting from consumers’ personal information, or failing to dispose of consumers’ personal information properly.

Here are some steps you can take in order to keep your business safe:

  • Train your staff to spot this scam.  Educate your employees about how this scam works. In addition to your regular receptionist, talk to everyone who may pick up the phone. Put a copy of this alert in employee mailboxes. Mention it in a staff meeting. Post it on the break room bulletin board or where employees clock in and out.
  • Inspect your invoices.  Depending on the size and nature of your business, consider implementing a purchase order system to make sure you’re paying only legitimate expenses. At a minimum, designate a small group of employees with authority to approve purchases and pay the bills. Train your team to send all inquiries to them. Compile a list of the companies you typically use for directory services, office supplies, and other recurring expenses. Encourage the people who pay the bills to develop a “show me” attitude when it comes to unexpected invoices from companies they’re not familiar with. Don’t pay for products or services you’re not sure you ordered.
Posted in Uncategorized | Leave a comment

How to reduce spam in your inbox

ID-100291063

Nothing can be more annoying then viewing and then deleting your spam email. Spam refers to unwanted bulk messages most commonly sent through email.

The advancements of technology has made spam accessible through more than just email. People can now receive spam through instant messaging,  blogs, text messages, and even voice over internet conversation programs. Its mostly used by advertisers because of its low cost, but is also used by scammers to trick you into giving up sensitive information.

That’s why it’s important to  never click on links, download attachments, or reply to messages from senders you’re not familiar with. If you do, the information you give up may used by scammers in a variety of ways, including selling your sensitive information to others.

However, there are ways to reduce the amount of spam you receive:

  • Look into your spam filter and use it – Most email services have some sort of spam filter available.  The filter identifies potential spam messages and then sends them into a separate spam folder. Some also allows you to report messages as spam or mark them as junk. You can also forward unwanted or deceptive messages to the Federal Trade Commission at spam@uce.gov. Be sure to include the complete spam email.
  • Read privacy policies  – Before you submit your email address to a website, check the privacy policy to determine if the website owner will sell it to others.  Also look for pre-checked boxes that will sign you up for email newsletters, updates, and advertisements from the company and its affiliates.  Some websites will allow you to opt out of the emails.  It might be also be a good idea to have two email addresses and have one designated for sign-ups.
  • Make sure your computer is protected – Hackers monitor the internet looking for unprotected computers that they can install malware on, allowing them to control the computers remotely.  Make sure your security software is up to date and run it frequently to detect possible threats.  Disconnect your computer from the internet when not in use.

.

 

 

Posted in Uncategorized | Leave a comment

Protection from Zika? Not so fast says FTC

mosquito-on-my-hand-1385575

With all the news around the globe regarding the Zika virus, some companies seemed to have tried to convince consumers their products can offer protection.

However, earlier this month the Federal Trade Commission sent  10 warning letters to online marketers selling products that say they offer protection from the virus.

According to the FTC, the letters warn the companies that Zika protection claims must be supported by competent and reliable scientific evidence in the form of well-controlled human clinical testing.

The products were different types of wristbands, patches, and stickers that supposedly repelled the mosquitoes that carry Zika or protect people from the virus. The letters also said the testing for their claims of Zika protection must use the mosquito species that are able to carry the virus — and must be able to demonstrate that the repellent effects last as long as advertised.

FTC said in the letter  the companies must review the claims that they made  for their products, and delete or change them immediately if they cannot be substantiated by scientific evidence.

Posted in BBB, Consumer Alert, Consumer Tips, Uncategorized | Tagged , , | Leave a comment

What VW’s settlement means for car owners

co2-emissions-1244756

If you’ve seen the news recently, you’ll know that Volkswagen has agreed to a settlement with the EPA, the California Attorney General, the California Air Resources Board, the Federal Trade Commission, and current vehicle owners/lessees and certain former vehicle owners/lessees in the U.S.

Why you may ask? VW claimed 500,000 cars had low levels of harmful emissions, but turns out they were much higher.

According to Volkswagen’s website, if the settlement is approved the company will agree to the following:

  • Buy back, terminate leases or provide approved emissions modifications for nearly 475,000 2.0-liter TDI diesel cars in the United States;
  • Provide cash payments to owners/lessees;
  • Pay for environmental remediation; and
  • Promote zero emissions vehicle technology

So, what does this mean for you?

Well, the FTC says it means VW will buy back affected cars for thousands of dollars more than their current replacement value, which is compensation for VW’s untrue emissions claims and for the trouble of replacing the car.

Additionally, the government agency says if environmental regulators approve a modification to the cars, people who own or lease will have the option for VW to implement the modification and get money in compensation.

This information is important if you are looking to sell one of the qualified cars because potential buyers could offer what might sound like a great deal, but would be less if do a buyback under the FTC’s settlement with VW. If you go with the buyback program, you can use the money however you like. If someone says you have to buy another car with it, they’re lying.

Now if you’re wondering if there is a deadline to submitting a buyback claim, there is.  But don’t worry, that’s not until September 1, 2018. Buybacks could start in late Fall 2016, and emissions modifications will begin once approved.

To find out if your car qualifies, click here.

Posted in BBB, Uncategorized | Tagged , , | Leave a comment

FTC Sues 1-800 Contacts

contact-lens-1560998

The Federal Trade Commission is suing one of the biggest online contact retailers in the U.S. for allegedly eliminating their online competitors by having them agree to bidding agreements.

According to the FTC, this all began when someone searched  “1-800 Contacts,” and saw advertisements for both 1-800 Contacts and a competitor. The online retailer objected to this because of bidding agreements signed by them and their competitors.

The FTC said these agreements stemmed from lawsuits that 1-800 Contacts brought against numerous rivals, accusing them of infringing its trademarks. So, 1-800 contacts and their competitors signed these agreements, which prevented both companies from bidding for each other’s trademarked terms.

Additionally, all but one agreement required each company to use negative keywords designed to keep search engines, like Google or Bing, from displaying a company’s advertisement. What this means is if a consumer searched “1-800 Contacts,” negative keywords would not allow ads from 1-800 Contacts’ competitors from appearing on your screen.

FTC’s complaint states 1-800 contacts entered into bidding agreements with at least 14 competing online contact lens retailers.

The federal agency claims these agreements are unfair since users can’t compare prices between different retailers, which FTC claims eliminates market competition. This means customers may be paying higher retail prices.

The administrative trial is scheduled to begin on April 11, 2017.

Posted in Uncategorized | Leave a comment

Car Wrap Scam 101

Who wouldn’t want to make easy money? The easier the cash can get into your wallet, the more likely someone will be to take the job opportunity.

Unfortunately, scammers know this and use it to their advantage quite often in a variety of different scams. One of these is the car wrap scam.

It sounds pretty simple. A company will tell you that you can make easy money if you shrink wrap your car with different brands like Monster Energy or Red Bull. All you have to do is deposit a check, use part of it to pay a specified shrink-wrap vendor, and drive around your town like usual. Simple right? Not so much.

What can really happen is the company will say you’ll make a couple hundred bucks. However, they’ll send you a check for couple thousand dollars, allowing you keep a portion, and then wire the rest to another company that will wrap your car.

A few weeks after you deposited the check, your bank will tell you that it bounced and you’re on hook for the money that was supposedly yours and the remaining amount.

Remember, if you get a message to deposit a check and wire money back, it’s probably a scam.

 

 

Posted in Uncategorized | Leave a comment

BBB Investigation: Customers claim San Antonio roofing company took cash, did no work

tool-belt-739152_960_720

A San Antonio roofing company has left some customers frustrated and wanting answers. But it’s not about what Durizon Roofing & Construction did do, it’s about what they allegedly didn’t do.

According to complaints filed with BBB, consumers hired the company to fix damages to their roofs. But after paying an upfront fee, Durizon Roofing & Construction allegedly never came back to start the job. Customers told BBB they repeatedly called the business to get answers, but either never received a call back or were told that the company was busy with other homes.

The company has responded to complaints by saying the work was completed or by giving an expected start date. BBB contacted these consumers to verify what the business claimed.

One customer stated Durizon Roofing & Construction repaired the roof of their home six months later after signing the contract in December 2015. However, the business did not work on the roof of their porch even though the contract stated it would be. Two others told BBB the business began the work and never finished. An additional consumer said the business repeatedly promised to complete their roof but never did.

But this isn’t the first time the company has shown a pattern of non-completion of work.

BBB’s investigation revealed the owners of Durizon Roofing & Construction, Richard Stevens and Mark Rodriguez, were co-owners of another business in Allen, Texas, called Castle Rock Construction. Complaints filed with that business revealed they failed to comply with an arbitration decisions or mediated settlement. Additionally, complainants alleged they had no work done on their roofs after paying upfront.

Anita Soliz contracted with Durizon Roofing & Construction in late October 2015. She said a roof inspector with the company came to her door after a hail storm hit San Antonio.

“He told me he could take a look at my roof for a free inspection and I thought ‘why not’,” Soliz said.

The company’s inspector came back and told Soliz he had found some damage. Soliz then decided to call her insurance to have an adjuster take a look with the inspector. Her adjuster then gave her a check to pay for the roof, but gave her some words of caution.

“He told to me be sure to not pay all of it at once to my roofer,” Soliz said.

Since Soliz felt comfortable with the inspector, she decided to go ahead and contract with Durizon Roofing & Construction. But first, she was asked to pay a fee in order to reserve her spot since the company had other clients in front of her.

“He pretty much told me they were getting really busy and would need $800 to hold my place, but that I would be a priority,” Soliz said.

Soliz wrote a personal $800 check out to the company, but said she never heard from them after that. Soliz said the business continuously evaded her calls, causing her to hire a lawyer in March to demand work to be done. Nothing ever came of it and she never used the check given to her by the insurance company. However, Soliz said she wasn’t refunded the $800.

“I ended up just hiring another roofer in April. It’s frustrating because Durizon Roofing only sent me regular mail twice, which was to tell me they were moving and a Christmas type card,” Soliz said.

BBB confirmed the business moved to a new location at 9200 Broadway St., Ste. 120 in San Antonio.

The business did respond to Soliz’s complaint by providing a phone number to call in order to receive her refund. Soliz said she called the number twice in June, but no one answered.

BBB also uncovered through a Bexar County public records search that the business owed money to two different companies, Austin Roofer’s Supply LLC and Roofing Supply Group, LLC.

Documents show Austin Roofer’s Supply LLC placed a lien on Durizon in September 2015 after the company failed to pay $3,000.

Separate documents revealed Roofing Supply Group, LLC sued Durizon Roofing & Construction for an unpaid debt of $33,673.29 after Durizon ordered materials and had not paid in over 30 days. Roofing Supply Group won the suit in March 2016. Documents reveal their lawyers filed a writ of execution, which allows a sheriff to seize Durizon Roofing & Construction’s assets and sell them in order to settle the debt.

BBB contacted the lawyer representing Roofing Supply Group, LLC to see if the writ of execution was completed, however he was unable to comment on the case.

Another complainant, Peggy Mott, told BBB she paid Durizon Roofing & Construction $4,620 as an upfront fee from her insurance to repair issues with her roof. Similar to Soliz, Mott says an inspector came to her home and checked her roof for damages for free. After paying the business, they never came back to repair the roof.

“They told me they would start around the second week of November. That date came and went,” Mott said.

Mott said she has called the business repeatedly at least once a month.

Durizon Roofing & Construction responded to Mott’s complaint by stating the work would be completed on July 17. According To Mott, the business has yet to finish the job as of July 18, 2016.

BBB sent three letters during the months of May and June to Durizon Roofing & Construction addressed to Mr. Richard Stevens, asking the company to address the complaint concerns.

On July 19, the company’s co-owner Mark Rodriguez responded to BBB’s letter with the following:

“The administrative assistant that we employed to handle these complaints did not inform us that we had so many outstanding issues with our customers. She had sole access to the email on file with the BBB and failed to communicate with her supervisors. When we discovered the volume of complaints that had been neglected, she was immediately dismissed. We are currently organizing our efforts to address each complaint and would appreciate your help in resolving this matter. The top priority is taking care of our customers, and addressing these complaints in a satisfactory manner.”

BBB has some tips that can make finding a reputable roofing contractor easier:

  • Do your homework. Check with BBB before choosing a roofing contractor. Get referrals, compare several price quotes, and always confirm the contact information of the contractor you choose. Beware of red flags, including high pressure sales tactics, full upfront payment or low estimates that may potentially balloon over time or foreshadow shoddy work to come. If possible, ask for references and check them. Try to talk to previous customers, and look at a similar job that has been completed recently and for one that was several years ago.
  • Work closely with your insurance company on repairs. Make sure you understand how your homeowner’s insurance company will reimburse your repair costs. Before spending money, call your insurance company first to make sure all necessary procedures are followed according to your policy. If you do not follow your insurance company’s guidelines, you may be stuck with the entire bill.
  • Ask about warranties. Warranties and workmanship are only as good as the company that stands behind them. Trustworthy businesses will offer information about how they plan to handle any repairs covered under their warranty, particularly if they are coming in from another area.
  • Get everything in writing. Make sure all work is explained in the contract, including cleanup, waste disposal and start and completion dates. Any verbal agreements that were made should be included in the contract. Pay close attention to the payment terms, estimated price of materials, labor and any guarantees. You should also get a copy of the contractor’s insurance. Any changes to your contract should be done in the form of a change order. Be sure the contract includes a physical address and phone number of the contractor. If you can, visit the address.
  • Beware of rogue contractors. In the wake of a storm, dishonest roofing repair businesses will solicit work, often going door-to-door in unmarked trucks. They may require advance payment or make big promises they won’t deliver on. A common sales tactic is to tell the homeowner that their roof is severely damaged from the storm, but that their insurance company will likely cover the cost. The homeowner is then required to sign a contract and make an advance payment. In many of these cases, BBB hears that the job is never completed and the insurance company does not cover the cost.
Posted in Uncategorized | Leave a comment

Texas AG warns of email scam containing harmful malware

bbb seal of texas

The Attorney General of Texas is warning consumers and businesses throughout Texas of a new email scam that contains malicious malware and claims to come from the Office of the Attorney General.

According to the OAG, the email appears as though it came from the Consumer Protection Division and informs business owners that a complaint has been filed against them. The email contains a link, which if clicked on, downloads harmful malware onto your computer.

The OAG said there are several signs that can help consumers and businesses realize the email is fake. For example, some red flags are if the email contains obvious typos or miscapitalized words.

Additionally, you can check the sender’s email address. If it doesn’t end with “texasattorneygeneral.gov” or “consumerprotection-complaints@texasattorneygeneral.gov”, it may be a phishing email.

If you’re not sure who the email is from, don’t open it. Also, be sure your computer is up to date with antivirus software.

You can also report this scam with BBB.

 

Posted in Uncategorized | Leave a comment

Half a million hoverboards recalled for fire risk

hoverboard

A massive recall of over 500,000 hoverboards has been issued by the Consumer Product Safety Commission after the agency received numerous reports of hoverboards catching fire or spewing smoke.

The announcement was made on Wednesday with the CPSC stating it received at least 99 incidents reports of battery packs in hoverboards overheating, sparking, smoking, catching fire and/or exploding including reports of burn injuries and property damage.

The recall involves eight business, one retail store, and one online retailer.

In late 2015, online retailer Amazon pulled some hoverboards from their websites after safety concerns regarding the boards’ lithium-ion batteries.

CPSC said consumers should immediately stop using the recalled products and contact the recalling company to return their hoverboard for a full refund, a free repair or a free replacement depending on the model.

To view a list of the companies & stores listed in the recall, click here.

 

Posted in Uncategorized | Leave a comment