A Negative Customer Review Could Cost You Your House or Business!

They could cost you your house or business

We have all had at least one unsatisfactory experience with a company or contractor. When emotions run high and you’ve reached your boiling point, it is hard to refrain from sticking it to the service provider with a negative review on sights like Yelp or Angie’s List. Letting others hate-yelpknow about your bad experience is fine, but be careful how you word your next review. It could land you a lawsuit.

“Most people don’t know the legal nuances of how to write negative reviews without making defamatory statements,” says Eric Goldman, co-director of the High Tech Law Institute at Santa Clara University Law School.

“Every time people post negative online reviews, they are betting their houses – in the sense that the criticized business can sue them and try to take their house.”  – Eric Goldman

With more than 30 million user reviews posted on Yelp, businesses are starting to use the law to fight defamation, lost reputation, and lost business due to slanderous customer reviews.

Perez vs. Dietz

This all started in Virginia when homeowner Jane Perez posted a negative customer review against contractor Christopher Dietz in the fall of 2012. Perez’s comments accused Dietz of stealing her jewelry and charging her for work that was never done. Dietz filed a lawsuit accusing Perez of defamation and slander.

The judge in the case ruled that portions of the Perez’s review had to be removed from the web.

This case went to the Virginia Supreme Court, where the ruling was overturned. The Supreme Court sided with Perez, ruling that her negative customer review was considered a freedom of speech right under the First Amendment. This ruling set the case back to the original judge who can set a trial date.

These litigation proceedings are important because they can determine the fate of Internet discussions, including if a contractor or company has a right to protection against slanderous reviews or if customers are within their right to free speech.

How to protect your business

One of the best ways to protect your business from negative reviews is by due diligence. Libel, slanderProtect your business by making sure you are covered for personal injury in your General Liability or Professional Liability insurance policies.

Other ways to prevent a negative review is to create a work environment tailored to customer satisfaction. Ask the customer what you can improve on, and settle conflicts diplomatically with witnesses and document both parties” agreements.

If you do get a negative review, respond in a private message or phone call. The reviewer will likely be surprised you contacted them, embarrassed that they were so harsh, and understanding – and even forgiving  – of any lapses in your customer satisfaction. Most of those providing negative reviews just want to be heard. Offer and an apology and offer to fix problem.

How to protect yourself

If you find yourself wanting to write a negative review, follow these tips to protect yourself from being sued:

  • Focus on the facts
  • Share personal experiences
  • Avoid making broad statements
  • Be specific (Ex.: bad customer service, too expensive, poorly finished product)

Example of a defamatory review:

Everyone at ABC Business is an incompetent, blubbering, fool! It took them a week to do one simple task and when they were finally finished it was done WRONG! To top it off they charged me extra! Do not go to these guys. They are horrible!

Example of a well-written review:

I was not pleased with the customer service or prices at ABC Business. It took a week for my project to be completed where I have had this type of project completed in less than two days at XYZ Business. I was also surprised by the cost. I paid $50 more at ABC Business to do the same project that XYZ Business did for me in the past.

Example of a business response to a negative review:

I am sorry, Unhappy Customer. We understand that our completion of your project did take longer than normal. This was because of the holidays when our staff take vacations and the workflow increases. We apologize for inconveniencing you. I also wanted to address our cost. We have to charge more for our services because we use special ink that does not run and special paper that never crinkles to give our customers the best finished project possible. We would like to compensate you for the delay you experienced by giving you a coupon for 15% off your next project or purchase at ABC Business. We appreciate your business. .

Source: Insurance Journal, “Consumers Posting Negative Reviews Could Face Legal Issues,” Mitch Lipka, January 7, 2013

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Categories: Personal / Advertising Injury

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