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Federal “Right to Yelp” Law Enacted

Posted in News and Recent Decisions, Operating a Business, Technology Related Topics

Effective March 14, 2017, consumers will have what is being called by some, a “Right to Yelp”. The Consumer Review Fairness Act of 2016 (“CRFA”) was enacted in December 2016, and prohibits businesses from inserting provisions into customer contracts that prohibit the customer from giving a derogatory online review about the business.

These provisions have been termed anti-derogatory provisions, and are used to give a business a contractually based legal right  to remove a negative consumer review that the business believes could damage its reputation. Typically these contractual provisions are buried in form contracts (defined by the CRFA as contracts where the customer had no opportunity to meaningfully negotiate the terms). Examples of these types of agreements are the terms of use of almost every business’ website, or even your Apple service agreement. The CRFA now prohibits businesses from using anti-derogatory provisions, and provides for penalties for businesses that do so.

What This Means for You

From the consumer standpoint, the CRFA encourages an organic and free-flowing information marketplace in regards to customer reviews, and allows the public as a whole to have the most accurate picture of a business’ services. In the “Google” age, consumers have come to rely upon the accuracy of reviews on sites and mobile phone apps like Yelp, YP, Facebook, and the Better Business Bureau. Consumers use these sites to determine which professional service to use, what restaurant at which to eat, and which products to buy. The CRFA ensures that these review sites are able show the full picture to consumers.

On the other hand, the CRFA limits a business’ legal options in protecting their business’ reputation. Businesses can now only remove reviews that are slanderous, libelous, or defamatory, and, for the most part, must go to court to do so. With the law prohibiting businesses from creating a contractual right to remove negative reviews, the business is forced to prove in court that the statement was actually defamatory, a much taller task than a breach of contract action.

How to Manage Negative Reviews

In light of the fact that many sites like Yelp and BBB are already flagging businesses using these anti-derogatory review provisions in their contracts, many businesses may have stopped using these provisions already. However, the question still persists: how do you get rid of the negative reviews without resorting to litigation?

Here are a few suggestions:

Many sites have options for you as a business owner to claim your business on their site so you can publicly respond to reviewers. In the event of a negative review, you have the opportunity to respond, clarify the situation, as well as take an opportunity to publicly show your commitment to customer service. This then puts it on the reviewer to give you a reasonable response. Hopefully this interaction will either diffuse the situation, lead the reviewer to remove his/her post, or result in the reviewer responding inappropriately, thereby ruining his/her credibility. Make sure you’ve claimed your business on these sites so you can do this!

If the negative review lingers, how can you make that review an anomaly? First, learn from it, and strive to prevent whatever caused the negative review. This should lead to a higher rating over time. Second, encourage (and that doesn’t mean bribe) your customers to leave you a review at the end of your customer relationship so you can gain a higher rating. One interesting method I’ve seen for those businesses interacting with customers electronically, is that the businesses ask their customers about their experience through electronic communication. This gives them the option to answer whether their experience was positive and negative. If it was negative, the business links the customer to a private feedback page where they can make their comment to you privately. If they select positive, link them to a page asking them to review you on whatever review site you suggest. Though it doesn’t stop the negative reviewers from then taking their frustrations to Yelp, or the like, you may reduce the risk of a negative review by allowing an unsatisfied customer to blow off some steam.

If the comment is actually personally derogatory or defamatory, there are options on most sites that allow you to flag the comment to the site administrator to get the review removed.

The business attorneys at Schober Schober & Mitchell, S.C. stay updated on new legal issues affecting Wisconsin businesses. To ensure your business is complying with this new law, or for any questions you may have, email me at jmk@schoberlaw.com.