Wisdom Properties Group was recently pinged by the ACCC over a non-disparagement clause in its standard home building contract, which allowed Wisdom to control what customers said about its services, including via online review forums.

Fair Enough?

The ACCC considered the clause an ‘unfair contract term’, which generally includes terms which create a significant imbalance in the rights and obligations of the parties, aren’t in the best interests of consumers or reasonable in the circumstances.

Examples are termination rights, indemnities, rights to vary terms unilaterally and – as this case shows – restrictions on fair comment.

If a contractual gag is not an option, what can you do about negative customer reviews?

When it’s true

You don’t have to like a negative review, but is it true?

If a review is provided by a genuine customer giving a reasonably accurate account of their experience, then you may have to take the feedback on board and perhaps negotiate with the customer to voluntarily remove or update their review.  

This does not mean paying them off (which may be misleading/deceptive) – it means genuinely trying to address the customer’s concerns.

If you have a number of negative reviews, you might consider engaging a PR expert to help you turn things around.

When it’s not true

If you believe the review is not from a genuine customer, omits key details/ is untrue, or is motivated by malice, then you may have legal rights to have the review removed or retracted.

At a minimum, you may have a basis for writing a strongly-worded letter.

When a customer review is plain wrong, your options are:

• Misleading/deceptive representations: this won’t help if you’re dealing with a genuine customer, but may if the reviewer is a competitor, or has been incentivised by one.
• Defamation:  may be an option for businesses with fewer than 10 full-time employees. The main defences to defamation are truth or fair comment, so be clear on the facts before you cry foul.
• Injurious falsehood: a possibility where a defamation claim isn’t an option, but can be hard to prove. To have a chance, the statement must have been made in public, be false, and have caused you actual damage (eg lost sales). You must also prove malice on the part of the reviewer (which is where evidence of competitor meddling will assist).

All businesses get bad customer reviews sometimes and there are practical ways to deal with that. In some circumstances, the law can be your shield.

ABOUT THE AUTHOR
David Kelly is the founder of KHQ Approved, which offers fixed fee solutions across a range of areas (including marketing law and contract review).  Peace of mind from an experienced team for a reasonable price.