The smarter consumer: When to sue a company — and when to shame it

By | September 12th, 2011

Don’t have a tantrum.

You might feel like it after a company says “no” to your polite email asking for a refund, product replacement or an extension on your warranty. But you should understand that “no” is often a default answer, a kneejerk response to a customer question.

Yes, even on the third or fourth try. Even after you’ve filed a credit-card dispute – and lost.

As mentioned last week, your two final options when you’re not getting your way are going to a court of law or a court of public opinion. Both can be highly effective, but both can also backfire. (Trust me, I’ve been sued along with another customer – it’s no fun.)

The case for a gripe site.
Over the years, I’ve known many customers who built sites dedicated to their negative customer service experience or who created “viral” videos that inflicted millions of dollars of damage on a company’s bottom line. Whether you choose to take your war to Twitter, Facebook, a blog or YouTube, you must first believe that there is no other way, short of a lawsuit, to get what you want. Going “public” is a campaign of last resort, and you have to be cautious.

There’s a right way and a wrong way to take a campaign to the Internet. I remember one disgruntled Expedia customer back in 2006 who had an airline ticket problem and who initiated a slash-and-burn online campaign with a flashy, overly emotional page that included ALL UPPERCASE descriptions of what happened.

Sample: “I WAS ABANDONED IN EUROPE BY EXPEDIA AFTER THEY FAILED TO PROVIDE ME A TICKET I HAD ALREADY PAID WITH MY CREDIT CARD.” (When he contacted me and I was unable to help him to his satisfaction, he started emailing my editors, demanding my resignation. That only made him look crazier.)

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Little wonder the online travel agency gave him the cold shoulder.

I’ve also seen successful online campaigns. One recent effort that comes to mind involved a guest at a Choice Hotel property involving its best-rate guarantee. After his request to have a price honored was dismissed he posted his correspondence between the hotel and himself online. It was rational, level-headed and factual. The hotel chain quickly reversed itself.

The case for a lawsuit.
My experience with lawsuits is similar. Judges have a way of ferreting out frivolous, emotional lawsuits – if they ever make it that far. A vast majority of consumer lawsuits end up in small claims court, where you can represent yourself. I personally know many aggrieved customers who showed up in small claims court with little preparation, a few receipts, and a lot of determination. And they won, even against a trained attorney.

Although I’m not a lawyer, I can say with some certainty that once you get beyond small claims, and are playing in the big leagues, companies pay close attention to what you do. They’ll send a lawyer, or a team of lawyers, instead of defaulting. They will prepare for the case. In fact, it’s likely you’ll face depositions and subpoenas long before your case goes to court, and the paperwork requirements alone may be enough to make you reconsider your case. The costs, both in time and money, may outweigh the benefits of a legal complaint.

Beware of litigious companies.
Companies routinely threaten me with lawsuits. It comes with the territory. I probably wouldn’t be doing my job as a consumer advocate if corporate America thought I was doing a great job. But threatening a customer is far more serious thing. And they’re out there.

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My advice? Before engaging in any social-media campaign or filing a lawsuit, do a simple search for the company name +”lawsuit” on your favorite search engine. Scroll down and go a few screens deep, to avoid search engine-optimized placements. If you see what looks like a pattern, which is to say, if it looks like the company you’re involved with is overly litigious, you may want to switch from a lawsuit to an Internet campaign – or vice versa.

By the way, ethical businesses with quality products only use the court system as a last resort. So a pattern may be indicative of a sleazy company.

By the time you get to this point in a service dispute with the company, it’s no longer a question of who’s right and who’s wrong. It’s who has the best strategy.

And that should be you.

(Photo of an angry kitten by zho uxuan/Flickr)

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