How To Avoid Deadbeat Clients
Over lunch last spring, as Robert Bodi listened to a buddy complain about a customer who refused to pay for irrigation work on her property, he knew something sounded familiar about the story. Bodi, an independent irrigation contractor in Venice, Fla., realized the same woman had stiffed him after he fixed some wires in her irrigation system following a lightning strike. "And it turned out, there was a third guy in our business who said she never paid him for putting in a new pump for her," recalls Bodi, a 30-year-veteran of the contracting business, who runs Rainmaster LLC. "Some people you just can't please."
With the help of his daughter Ashley, Bodi responded by establishing BusinessBeware.biz, a Web site where contractors share stories about deadbeats and those infamous, impossible-to-please customers. The site also names names, to help business owners avoid toxic clients. Since it began operating, in June 2008, the Web site has acquired about 650 members and received 20,000 page hits. BusinessBeware.biz has become something of a reverse Better Business Bureau (BBB), a resource that many small business owners look to for guidance—especially in a depressed economic environment in which few can afford to let customers ignore invoices.
"When it comes to work contractors do, they invest a lot of money, so it's only natural for them to get nervous about not being paid," says Alison Southwick, a spokeswoman for the Better Business Bureau.
Like the BBB, Bodi, 48, and his daughter are taking pains to ensure their site's legitimacy so that it doesn't turn into a repository for general nastiness or diatribes from folks seeking to rant for the sake of ranting. "The first couple of months we had to delete stuff like crazy. I was worried about lawsuits," Bodi says. "Then we started charging a one-time $5 fee for people to become members. You would not believe how that reduced the number of crazy claims. And members have to give us their business license numbers." The $5 fees are used to defray the site's administrative costs. (The Bodis take no payments for operating BusinessBeware.biz.)
Although Bodi doesn't retain a lawyer for advice about the site, he says he and his daughter calmed their fears about potential lawsuits by doing some legal research on the Internet before starting the site. They've posted a disclaimer, citing Section 230 of the Communications Decency Act of 1996, which says that, as long as Web site owners don't alter reader comments to make them defamatory, they can't be held liable. The Bodis edit to remove defamatory language from the site, and prohibit profanity and personal insults. "You have to stick to the issue at hand," says Robert Bodi. "You can't call anyone fat or ugly on our site." So far, no one has attempted any legal action against BusinessBeware.biz or the contractors who post complaints on the site.
Dino Garnett, the sole proprietor of Dee-Noz Tractor Work, in Port Charlotte, Fla., counts herself as a fan of BusinessBeware.biz. "If I put down a load of pit shell, that's $1,500 just for the material, and I can hardly go back and scrape it back up into my truck if the customer refuses to pay," Garnett says. "Now before I take on new customers, I check BusinessBeware.biz to see if other contractors have had problems with customers not paying their bills."
Indeed, tales about deadbeat customers—or those who subjected a contractor to a particular onerous experience before paying—dominate the site. "After she used us for cleaning service, she would not pay us. She told us many times she would pay us but never did," reads a typical comment, from a contractor in El Paso. Although most posts don't disclose the amount that was owed, the average among business owners who reveal that information is $2,000 to $2,500. Bodi and Garnett say they have found that wealthy customers are the ones most likely not to pay.
BusinessBeware.biz receives complaints from all over the U.S. and parts of Canada. Contractors can search for complaints about prospective customers via Zip Code or county, state, or province name. A list of customers then comes up, but the user can't see the text of the actual complaints without registering and paying the $5 fee. Likewise, customers who have registered can view what contractors have written about them; they then have the option of posting an explanation with their side of the matter.
If complaint sites like BusinessBeware.biz are the flip side of the BBB, does it mean the most-complained-about industries are the ones most likely to create their own sites about troublesome customers? Probably not. According to the BBB, the top three fields that generate the most customer complaints are cellular phone sellers, auto dealerships, and banks—industries dominated by large corporations that do not want to risk lawsuits or even the slightest appearance of a Goliath hectoring an individual. (Contractors rank 19th.)
Indeed, small businesses are the most likely to follow BusinessBeware.biz's example, says Dave Heller, a lawyer at the Media Law Resource Center in New York. He points to BusinessBeware.biz's closest and most prominent predecessor, the decade-old www.bitterwaitress.com, which began as a forum for restaurant servers to tattle on diners who left cheap tips. "These are situations in which the balance of power is not necessarily tipped in favor of the business," Heller says. Hence public opinion is more likely to view small contractors—who provide manual labor and the up-front costs of providing construction and repair materials—as victims rather than menacing bill collectors.
Nonetheless, wherever people are identified, there exists the possibility of litigation. Linda Wong, an attorney with a specialty in commercial law, says she would discourage all businesses from taking part in such forums. "You have the First Amendment right to publish statements on a public Internet forum," says Wong, a partner in the Princeton (N.J.) firm of Wong, Walker, Bowman & Fleming. "But if you write about private parties rather than public figures, you run the risk of defamation lawsuits."
Other observers, however, wouldn't let fear of litigation stop them from making legitimate complaints via Web sites like BusinessBeware.biz. "It's the other side of the coin—there are a million sites where customers complain," says Robert Cox, president of the Media Bloggers Assn. in New Rochelle, N.Y. "If businesses want to use the Internet to post information, it's fine as long as it's true. Businesses have a right to protect their interests—within the limits of defamation and privacy law, of course."
Ben Popken, co-executive editor of Consumerist.com, a three-year-old consumer-complaint site recently purchased by Consumers Union, believes that the $5 membership fee BusinessBeware.biz charges means lower liability risk. "The site is behind a pay-wall, so it's not so bad, because it isn't accessible via a Google search for an individual customer's name," says Popken. And no matter how much justifiable hostility Web site posters feel, experts say such sites are wise to adhere to strict rules on civil language. "Don't call for someone's dismemberment," says author Steve Dublanica, who gathered hundreds of waiters' complaints about customers for his book, Waiter Rant: Thanks for the Tip—Confessions of a Cynical Waiter (Ecco Harper Collins, 2008).
Indeed, Ashley and Robert Bodi pride themselves on the fact that BusinessBeware.biz postings have in some cases led to reconciliations between customers and wronged contractors. And he speculates that the very existence of BusinessBeware.biz will help stop payment squabbles before they start: "We hope the customer and contractor can get together and say: 'Hey, neither of us wants to be on this list, so let's get this thing resolved between us now.'"
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