Negative Review Charge Costs Hotel State Action

Advertising Law

The Indiana attorney general has filed suit against a hotel that charged a married couple $350 after they shared a negative review of their experience.

In March 2016, Katrina Arthur and her husband spent a single night at the Abbey Inn & Suites in Nashville, IN. “We were just wanting to get away and have some alone time,” Arthur told local television station WTVR. “It looked really pretty on the website.”

But the hotel didn’t live up to its pictures, Arthur said. The room was dirty (she found hairs in the sheets) and smelled awful. The air conditioning didn’t work, and the water pressure was low. Worst of all was the complete lack of response from management, which left Arthur cleaning the room herself to make it habitable, she said.

Afterwards, the hotel emailed Arthur and asked her to review her stay. In response, she detailed the negative experience. “I was honest,” she said. “I wanted people to know not to waste their money because I know people save their money for special occasions.”

But after she posted the review, Arthur’s credit card was charged $350 and she received a letter from the hotel’s attorney threatening legal action. She complained to Indiana Attorney General Curtis Hill, who filed suit in December against the Abbey Inn for violating the state’s Deceptive Consumers Sales Act.

According to the AG’s action, the hotel had a policy in place between September 2015 and November 2016 to charge customers $350 for negative reviews. The policy stated: “Guests agree that if guests find any problems with our accommodations, and fail to provide us the opportunity to address those problems while the guest is with us, and/or refuses our exclusive remedy, but then disparages us in any public manner, we will be entitled to charge their credit card an additional $350 damage. Should the guest refuse to retract any such public statements legal action may be pursued.”

The policy was not provided to guests, posted in common areas or individual rooms, or referenced in the email requesting that customers provide an online review, according to the state court complaint.

Further, the hotel often did not have employees on site and available to resolve problems, the AG alleged, so customers were unable to alert the hotel of a potential issue as required by the policy.

The lawsuit requested an injunction against the hotel, as well as civil penalties under the state statute of up to $5,000 per violation.

Earlier this month, the former owner of the hotel responded with a motion to dismiss the suit. “The complaint filed in this matter has no basis in Indiana law; attempts to restrict the ability of the defendant to contract with its guests with regard to conditions of their business relationship; and is based on a single witness’s false statements,” according to the filing.

To read the complaint in State of Indiana v. Abbey Management, click here.

Why it matters: The “gag clause” allegedly used by the Abbey Inn is now illegal after President Barack Obama signed the Consumer Review Fairness Act into law last year. The statute prohibits companies from using contract provisions to restrict consumers’ ability to post critiques and prevents businesses from asserting a copyright interest in the reviews.



pursuant to New York DR 2-101(f)

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