Attorney General Todd Rokita has obtained a settlement with an Indianapolis home builder resolving allegations that the company illegally included a gag clause in contracts that imposed $2,000 fines on homebuyers who made statements portraying the company “in a bad light.”
As part of the settlement, Davis Homes has agreed not to interfere with customers’ liberty to speak freely about their experiences. The company denies the allegation that it violated the Consumer Review Fairness Act and admits to no other wrongdoing.
“Under the law, Hoosiers have the right to share their opinions about products and services,” Attorney General Rokita said. “With this action, we are protecting that right.”
The Consumer Review Fairness Act of 2016 makes it illegal for companies to include in form contracts a provision that restricts a consumer’s ability to communicate reviews or assessments of a seller’s goods, services, or conduct. The Act also outlaws imposing a penalty or fee on any consumer who does make a review or assessment of a seller.
Before obtaining the settlement, Attorney General Rokita’s team also alleged that Davis Homes violated the Indiana Deceptive Consumer Sales Act with its contract language.
The Assurance of Voluntary Compliance requires the home builder to immediately end the use of the offending clause in its consumer contracts and to not attempt to enforce the clause on anyone who has already signed a contract with the builder. The home builder is also required to notify consumers who recently signed a contract with the builder that the clause is null and void.
Any Indiana consumers who signed a contract that contains a similar clause restricting or penalizing their ability to give honest reviews of a business can file a complaint with the Consumer Protection Division of the Indiana Attorney General’s Office at IndianaConsumer.com or by calling 1-800-382-5516.
The Assurance of Voluntary Compliance is attached.
