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New York Court Vindicates Customer From Whom Online Retailer Attempted to Extort Money

Aug. 26, 2015

New York Court Vindicates 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 New York Court has granted a default judgment to a Wisconsin consumer who ordered an iPhone case and later was bullied by an online retailer with threats to report a non-existent debt to credit bureaus.

Cindy Cox of Kenosha, Wis., owes nothing to Accessory Outlet, according to a default judgment entered in the Supreme Court of New York in Manhattan. The court also granted Cox triple damages of $150 as allowed by New York law. Public Citizen represented Cox.

“Rulings like this encourage people to stand up for themselves,” Cox said today. “I don’t want Accessory Outlet to be able to bully other people.”

“This judgment demonstrates that consumers have recourse when unscrupulous businesses bully, harass or threaten their customers or attempt to fine customers for lawful actions such as disputing a charge or telling others about their bad experiences with a merchant,” said Scott Michelman, the Public Citizen attorney handling the case.

In July 2014, Cox, a U.S. Navy veteran, 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.

The company also threatened to report the $250 “debt” to credit reporting agencies, to ruin Cox’s credit score and to have a collections agency hound Cox “continuously.” Accessory Outlet promised that Cox’s debt “will continue to rise with every email and every second we dedicate” to the matter. It also said 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.”

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

On behalf of Cox, Public Citizen sued Accessory Outlet in August 2014. Public Citizen sought a judgment saying that the company’s “Terms of Sale” and Cox’s alleged debt were void, and seeking damages under New York’s Deceptive Practices Act for the threatening and harassing emails Accessory Outlet sent Cox.

Public Citizen also asked the court to declare that Cox did not owe Accessory Outlet or its parent company, Blue Professional, a debt because the terms of sale were hidden on its website, were unreasonably favorable to Accessory Outlet and were never presented to or accepted by Cox when she made her purchase.

Neither Accessory Outlet nor Blue Professional appeared to defend their actions. Several of Blue Professional’s websites, including Accessory Outlet, appeared to have been taken offline within a day of Cox’s filing suit last summer, and they have not reappeared.

Judge Robert R. Reed granted judgment today to Cox in a one-page order. Daniel E. Clifton of Lewis, Clifton & Nikolaidis, P.C. in New York was co-counsel for Cox.

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