New federal law prohibits contracts that ban consumers from writing a negative review

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A new federal law signed this past December will protect a consumer’s right to complain online and a write a negative review on a company.

The Consumer Review Fairness Act (CRFA), signed by former President Barack Obama, prohibits non-disparagement, or “gag” clauses, in contracts with consumers, including terms and conditions. The law states it is meant to “prohibit the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered in interstate commerce that were subject of the contract.” As BBB first reported back in September 2015, these clauses prohibit consumers from writing negative remarks, truthful or not, about a company through a public medium like Yelp, Google, or a BBB review. If you break the clause, you could be sued for hundreds or thousands of dollars by the business.

This new law was effective March 14, 2017.

What does this mean for consumers?

It means consumers now have the right to make a fair and honest review about a business, without the fear of being sued.

“You have the same protection as anybody has when it comes to criticizing and commenting,” said Richard Alderman, Professor Emeritus and Director of Consumer Law at University of Houston Law Center.

The law protects various types of reviews like social media posts, uploaded photos or videos and online reviews. Beyond product reviews, the law also applies to a customer’s review of a company’s customer service.

However, Alderman warns consumers about going overboard when posting reviews.

“State facts. Don’t try to intentionally harm a business because you didn’t like the way they dealt with you. If you go overboard, they might have the right to sue you under our liable and slander laws.”

Consumers who see these types of clauses in a contract can contact the Federal Trade Commission or their local state attorney general.

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