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Aug. 27, 2014

Public Citizen Goes to Court on Behalf of Customer From Whom Online Retailer Attempted to Extort Money

Accessory Outlet Cited Its ‘Terms of Sale’ to Threaten and Make False Debt Claims Against Wisconsin Customer

NEW YORK – A consumer bullied by an online retailer with threats to report a non-existent debt to credit bureaus and to have debt collectors call the consumer continuously is entitled to a judicial decree stating that she does not owe the company a debt, Public Citizen said in a lawsuit filed today in a state court in New York.

In July, Cindy Cox of Kenosha, Wis., who is a veteran of the U.S. Navy and now works with special needs children in her local school district, placed an order online for an iPhone case from Accessory Outlet. When Cox discovered after 10 days that the order had not shipped, she contacted Accessory Outlet to cancel the order.

Accessory Outlet refused to cancel, saying that the order had shipped, and Cox responded that she would contact her credit card company. Accessory Outlet demanded that Cox pay $250 for breaching its terms of sale prohibiting “any complaint, chargeback, claim, dispute,” or “any public forum post, review, Better Business Bureau complaint, social media post, or any public statement regarding the order,” or threats to take any of these actions, within 90 days of a purchase.

In emails over the course of two days, the company threatened to report the $250 “debt” to credit reporting agencies and to damage Cox’s credit score. Accessory Outlet promised that Cox’s debt “will continue to rise with every email and every second we dedicate to correspondence of any kind pertaining to your breach of the terms of sale.” The company also threatened to refer the “debt” to a collections agency, which Accessory Outlet said would call Cox’s home, cell and work phones “continuously.”

Accessory Outlet told Cox that it had enforced the terms of sale against “many individuals” and that Cox was “playing games with the wrong people and [had] made a very bad mistake.”

“Accessory Outlet is using unfair terms hidden in fine print, along with threatening emails, to bully a customer into keeping quiet about her bad experience with the company,” said Scott Michelman, the Public Citizen attorney handling the case. “But terms that prevent a customer from speaking publicly about her transaction and from contacting her credit card company are unreasonable and unenforceable.”

Several days after Accessory Outlet demanded the $250, the iPhone case Cox ordered arrived, but it was defective.

“I want to go online and warn other customers about Accessory Outlet’s unfair terms and shoddy products,” said Cox. “But I’m afraid Accessory Outlet will claim I owe it more money and try to ruin my credit.”

Today’s case was filed in the Supreme Court of New York in Manhattan. Daniel E. Clifton of Lewis, Clifton & Nikolaidis, P.C. in New York is co-counsel for Cox.

The lawsuit asks the court to declare that Cox does not owe Accessory Outlet a debt because the terms of sale were hidden on its website, are unreasonably favorable to Accessory Outlet and were never presented to or accepted by Cox when she made her purchase.

View the lawsuit.

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