Legal

Building company Wisdom Homes enforces contract clause to stopping customers posting online reviews

Dominic Powell /

A building company has reportedly issued a legal notice to a reviews website in a bid to have customer reviews taken offline, with one commercial law expert saying businesses have few ways to protect themselves from online “trash talk”.

Fairfax reports New South Wales building company Wisdom Homes sent an affidavit to popular reviews website ProductReview ordering it to remove 81 reviews, which it claims breach contractual provisions.

In a post on the ProductReview website, the website outlines Wisdom Homes customer contract clause “prohibits customers of Wisdom Homes from writing reviews on the ProductReview website, amongst other restrictions”.

ProductReview has now ceased all reviews of Wisdom Homes, which currently has a 2.9/5 star review on the website.

Speaking to Fairfax, ProductReview director Elmar Shar said the affidavit stated all Wisdom Homes customers since 2008 were unable to post reviews without the company’s permission as per the clause in their contracts.

Shar claimed the affidavit said the clause was implemented in order to limit “unjustified and incorrect blogs being posted by Wisdom customers”.

However, Tony Mylne, commercial lawyer at TressCox Lawyers, told SmartCompany these types of clauses are one of the few ways businesses can protect themselves from the “trash talk” that can occur on online review sites.

Despite Mylne “suspecting” questions could potentially be raised about such clauses under unfair contracts legislation, he says there are no formal provisions preventing businesses from implementing the clauses.

“Businesses have very little control over these sorts of review sites, and there can be a lot of trash talk on these places that’s largely unjustified,” Mylne told SmartCompany.

“Clearly that prompted this sort of reaction from the company, who otherwise would have very few means of putting a stop to it.”

Competitors could be influencing reviews

Mylne believes Wisdom Homes’ approach was “a bit heavy handed”, but maintains businesses need more protection against unfair online reviews, as the system could be influenced by crafty competitors.

“Some of these websites let companies be rated completely anonymously, so you could have all sorts of things happen, including commercial competitors influencing the rating,” he says.

“It’s not unfair that companies should rise and fall on their reputation, but it is unfair if competitors are able to influence this reputation.”

In a statement to Fairfax, Wisdom Homes said clients were “encouraged” to share feedback through various systems implemented by the company itself, and claims the clause affected ProductReview’s website only.

“Wisdom Homes has had a previous dispute with ProductReview.com.au and the terms of the dispute are strictly confidential,” a spokesperson told Fairfax.

“Clients however can publish online reviews via other social media channels, blogs and forums”.

“Emotive” building industry fuels negative reviews

This is not the first time building companies have come under fire for their handling of product reviews, most recently with ACCC taking builder Aveling Homes to court over claims it misled customers with fake review websites.

The ACCC also launched court action against property development company Meriton over claims the business intentionally prevented customers from posting reviews on review website TripAdvisor.

Mylne believes these issues arise frequently in the building sector thanks to the “emotive” nature of the industry.

“Building a home can be an emotive subject for customers, especially when people’s expectations aren’t met. This leads to a situation where emotional customers are posting reviews and over the top comments can be made,” he says.

Mylne says this is a situation where the “tech is ahead of the law” in regards to the actions businesses can take against unfair reviews online, but notes there must be a balanced approach for companies and consumers.

“There needs to be some balance in this, why should someone be restricted from saying something as long as it’s a fair comment?” Mylne says.

“Companies may be using these clauses as a hammer to try and induce customers from being effusive on an online review site or blog.”

“People should have the right to review, but that right must be exercised in a way that’s fair to both sides.”

SmartCompany contacted Wisdom Homes and ProductReview but did not receive a response prior to publication.

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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  • John Hutchinson

    An “Unfair Clause” under the current Law. Enforcing through the Courts could send them bankrupt.

  • jota6689

    a company inserting such a clause clearly has systemic product defect issues that it tries to hide behind anti free speech and anti democratic contractual clauses. Anyone thinking of dealing with them should think not once not twice but at least three times.

  • Jason M

    review sites are always biased towards negative / bad feedback … which is why Facebook enabled companies to opt out of accepting reviews

  • Leeha Debnam

    I understand that building is an emotional time – I’m living that nightmare right now. We have had a build where we have had so many errors (major errors, like putting the gas on the wrong side of the house, laying the wrong flooring, wrong tiles etc) and poor workmanship and our builder just doesn’t seem to care. Apparently, this is ‘just what happens during a build’ and the more we talk to others who are building, it appears to be an industry wide attitude. It seems to me that the majority of builders are now all about the ‘rush job’ and getting the houses up as fast as they can. They have so much work that taking their time to get the job done right the first time goes straight out the door. They use less experienced tradespeople (in our case, they used two that they’ve never worked with before), have site supervisors that are well over subscribed in terms of the builds that they are ‘supervising’ and at the end, the owners end up with brand new house, that lacks the quality finishes and care that they deserve for the money they’ve spent. Yes, building is an ’emotive’ industry. But, it is also big business and there’s a lot of money on the line, so people deserve to have the right to review their experience (and hopefully, provide some insight to other people looking to build). Reviews shouldn’t be anonymous and certain protocols could be put in place. Generally, you can read between the lines of reviews that have no substance but the reader has the responsibility of taking that information and making of it what they will. Our builder didn’t have any reviews which we assumed to be a good thing – it certainly hasn’t turned out that way.

    • Leeha Debnam

      And yes, I’ll be reviewing our build 🙂