How an online rant can hurt your credit

A customer who wrote a negative review after a company failed to deliver a product is discovering painful consequences of a clause in a sales agreement.

By Money Staff 

 

This post comes from Christine DiGangi at partner site Credit.com.

Consumers regularly complain online about a disappointing service or product, whether to get the attention of a company’s customer service or inform potential customers. Many people appreciate such reviews and find them helpful.


Merchants may not enjoy negative feedback, but what can they do about it?

They may be able to fine you, according to a story reported by KUTV.

After Jen Palmer’s husband ordered Christmas gifts from Kleargear.com a few years ago, the items never arrived and the payment was canceled. The company never provided an explanation and Palmer’s attempts to connect with customer service failed, so she wrote a negative review on Ripoffreport.com.

Three years later, Kleargear.com demanded the post be taken down, or Palmer’s husband would face a fine for violating a non-disparagement clause in the site’s terms of sale. The clause says customers have 72 hours to remove the post or face a $3,500 fine, and unpaid fines will be reported to credit bureaus.

Because Kleargear.com says the fine is valid, the Palmers haven’t been able to successfully dispute the collections account.

Collections accounts stay on credit reports for about seven years, damaging credit scores and hurting consumers’ access to credit and lower interest rates.

Even if the Palmers decide to pay the debt, that won’t necessarily help with credit scores -- paid and unpaid collections affect your credit scores just the same (there is one exception -- VantageScore 3.0), but at least the debt is dealt with and prevents lawsuits for unpaid debt, collections calls and restricted access to loans.

If you're concerned about an unpaid debt affecting your credit, you should check your credit reports to be sure all accounts are listed accurately, and check your credit scores to assess your standing.  You're entitled to your free annual credit reports from each of the three major credit reporting agencies.