Now that your child or loved one has run that holiday gift through the paces of life for a few weeks, you might be contemplating singing its praises or sounding off on its shortcomings in an online, or even offline, review. Your critique would contribute to an ecosystem of consumer feedback steering potential buyers away from poor values or toward a deserving business. This is America, and it's your right to sound off -- isn't it?
Yet criticism of your gift could be very expensive because of a "gag clause" buried in the terms of service of your purchase. A consumer gag clause, sometimes referred to as a non-disparagement clause, is language you did not negotiate in a contract's fine print that tells customers: if you criticize our business, you owe us money.
Failure to pay a gag clause penalty could have far-ranging consequences, including having the business report your non-payment to a credit rating agency as an unpaid debt. This actually happened to a Utah family who, according to testimony before Congress, spent years disputing a $3,500 charge based on a critical review of a $20 Christmas gift purchase.
Gag clauses can appear in transactions where you might not expect them. One site that advises photographers on how to deal with clients actually encourages freelance shutterbugs to include gag clauses as a best practice. "Can you stop [a customer] from bad-mouthing your business? No," the site cautions. "But you can spell out the possible repercussions to [her], and any other bad client for that matter, with a non-disparagement clause for professional photographers."
As Americans make more purchase decisions through free information gathered via the Internet, online reviews play an increasingly important role in selecting a hotel for a vacation, buying a gift, or choosing a professional contractor. But when some businesses block tough but truthful criticism, the trustworthiness of such reviews is diminished -- even for businesses that don't engage in the practice.
We introduced the bipartisan Consumer Review Freedom Act, in both the U.S. Senate and House of Representatives, to protect the spirit of our Constitution's First Amendment right to free speech by prohibiting these gag clauses. Our legislation, which the Senate has already approved, would stop these egregious gag clauses while still preserving the right of a business to defend itself against false claims, including any manufactured by competitors.
What our proposal enacts is a common-sense approach to protecting consumer rights and an extraordinary free market system of customers that holds businesses accountable in a digitally-connected world. Through this legislation, we can stop gag clauses before the practice goes viral and guarantee your right as a consumer to inform and learn from others. Until the Consumer Review Freedom Act is enacted, however, that right is in jeopardy.