Attorney General Todd Rokita has reached a settlement with Davis Homes, an Indianapolis-based home builder, following allegations that the company included a gag clause in its contracts. The clause imposed $2,000 fines on homebuyers who made statements portraying the company “in a bad light.”
Under the terms of the settlement, Davis Homes will not interfere with customers’ ability to speak about their experiences. The company denies violating the Consumer Review Fairness Act and does not admit to any 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 prohibits companies from including provisions in form contracts that restrict consumers from sharing reviews or assessments of goods, services, or conduct. It also makes it illegal for businesses to impose penalties or fees on consumers who post such reviews.
Before securing the settlement, Rokita’s office alleged that Davis Homes also violated the Indiana Deceptive Consumer Sales Act by using restrictive contract language.
According to the Assurance of Voluntary Compliance agreed upon in this case, Davis Homes must immediately stop using the disputed clause in its consumer contracts and cannot enforce it against anyone who already signed a contract containing it. The company is required to notify recent customers that this clause is null and void.
Indiana residents who believe they have signed similar contracts restricting or penalizing honest business reviews can file complaints with the Consumer Protection Division of the Indiana Attorney General’s Office at IndianaConsumer.com or by calling 1-800-382-5516.
