In what goes down as one of the dumbest review policies and practices ever, a hotel in Indiana solicited reviews from consumers and would then charge them $350 if the guest left a bad review. No surprise then that they were sued in Indiana State Court.
Kara Kenney from rtv6 in Indianapolis reported this week that the Attorney General of Indiana filed a suit against the Abbey Inn & Wedding Chapel in Nashville and alleges violations of Indiana’s Deceptive Consumer Sales Act:
Summary of Conduct: The Defendant, Abbey Management Inc., owns and operates a hotel, Abbey Inn & Suites. At the times relevant to the allegations in this Complaint, Abbey Inn & Suites maintained a written policy stating if a consumer made any negative statement, including in an online comment or review, regarding the consumer’s stay at Abby Inn & Suites, the Defendant would charge the consumer an additional $350.00 and pursue legal action against the consumer. After a consumer’s stay, a consumer would typically receive an email requesting the consumer leave an online review sharing information about the consumer’s stay at Abbey Inn & Suites. In at least one instance, after receiving a request from the Defendant to leave an online review of Abbey Inn & Suites, a consumer posted online a negative review. The Defendant then charged the consumer an additional $350.00 and threatened the consumer with legal action. The Defendant’s actions in maintaining and enforcing this policy are unfair, abusive, and deceptive, and constitute violations of Indiana’s Deceptive Consumer Sales Act.
Katrina Arthur, a guest at the hotel who described an absolutely horrendous experience, attempted to complain while at the hotel but could not find any staff. After her visit, the hotel requested a review via email and not wanting others to experience anything similar, Katrina wrote an honest review of her stay. Subsequently the hotel sent her a bill for $350 for violation of a policy of which she had not been informed. The “review policy” was buried 9 or 10 paragraphs down on the policy page of the Inn’s website.
Complaints regarding accommodations must be submitted in writing prior to checkout for consideration by the Manager.
Guests agree that if guests find any problems with our accommodations and fail to provide us the opportunity to address those problems while the guest is with us, and/or refuses our exclusive remedy, but then disparages us in any public manner, we will then be entitled to charge their credit card an additional $350 damage. Should guest refuse to retract any such public statements legal action may be pursued.
Fearing legal trouble Katirna removed her review and actually paid the $350. She subsequently reached out the the State Attorney General, filed a complaint and asked for their help in retrieving her money. The State then sued (details of the state filing are visible here) the business.
Take aways for businesses?
Strong arm tactics are both illegal and dumb. There is no contract that a business can create that would take away a consumer’s right to speak truthfully about bad treatment. Thinking that there is will lead the business into a morass of legal and more lifely social problems.
What will consumers do if given these sorts of contacts?
Most consumers will respond to this bogus tactic with a fierce and honest appraisal of the business on line leading to even bigger problems than a few bad reviews.
With the Attorney General taking action, does that mean it’s illegal for businesses to retaliate in this manner?
The AG obviously thinks that it is against state consumer guidelines. Case history indicates that it is contrary to free speech protections under the US Constitution and it is contrary to federal law. Businesses should never be able to retaliate against a consumer that is just speaking the truth. As the Attorney General in this case points out it is unlawful for a business to attempt to penalize a consumer for leaving a review — unless the review contains certain prohibited information, such as confidential information, libelous statements, etc. Even then making that case is difficult and only succeeds rarely.
We first saw this sort of crazy business behaviors with Medical Justice in 2011, having created and selling a physician contract that prevented patients from saying bad things about their doctors on-line. An uproar ensued and a few months later, Medical Justice “retired” its form. In 2016, Congress enacted the Consumer Review Fairness Act banning anti-review contracts.
What should a business do to protect itself against bad reviews?
Run a great business, ask every customer for feedback, resolve complaints quickly and ask for reviews.
It’s not complicated and it doesn’t break any laws.