Online Reviews Could Kill Your Credit Score

I thought I'd heard it all until this morning watching the Today show and they had a story about Jen Palmer. She wrote a negative review online after an online retailer failed to send her the goods she'd ordered. Reasonable, right? Well, it turns out that when the purchase was made online, she had unknowingly agreed to an "anti-disparagement clause" and was then slapped with a $3,500 fine as a result of writing the negative review. She refused to pay the fine and the bill was sent to collections. More on Jen's story later but as your credit coach, we have a few lessons to be learned from this awful story.

Lesson #1 - Read the fine print. How many times have we clicked the little checkbox or the 'agree' button to get past the 'terms and conditions' as fast as we can in order to finish our online purchases? For me it's countless times that I've just clicked through, rushing to complete my purchase. Well no longer! Take a minute, yes, just 60 seconds and skim through the fine print and see if you spot this "anti-disparagement clause" or "anti-review clause". It's legal for online retailers to use in all states except California. If you agree to it, make sure you do so knowingly.

Lesson #2 - A bill that goes to collections is bad for your credit score. When a bill goes to collections and then hits your credit report it is damaging, no matter if it is $100 or $5000. All that matters is that it's an outstanding collection and it will drop your credit score. If a bill comes to you, address it immediately, do not ignore it, it will not go away. This is also a great reminder to check your credit reports regularly, just in case something like Jen's experience happens and the retailer sends the bill immediately to collections.

Lesson #3 - Work it out person-to-person. According to the story on the Today show, "anti-disparagement clauses" are primarily used by small businesses that fear one bad review could sink their business. If that's the case, maybe before writing a bad review, try dealing person-to-person with the retailer to see if your issue can be addressed off-line. Yes, there are crooks and nasty business owners out there that deserve negative reviews, but I'd venture to say that the majority of businesses want to have happy customers and will do what's necessary to make that happen.

So, what happened to Jen Palmer?
Well she sued the online retailer that tried to slap her with a $3,500 fine and won over $300,000 in damages. Congress is considering a bill that will make "anti-disparagement clauses" illegal across the country.