The Indiana Attorney General has filed suit against the management of the Abbey Inn because of an online review policy which the state says is “unfair, abusive, and deceptive.”
The inn no longer has that policy in place, said Andy Szakaly, the sole shareholder of Abbey Management Inc., which operated the inn in 2016 when this particular guest’s complaint arose.
Katrina Arthur of Greene County arrived at the inn in March 2016 to find the room unkempt, with water pressure and air conditioner problems and smelling like sewage, and could not find a staff person to tell, according to her consumer complaint. She said there also was no staff person at the front desk when she checked out the next day.
Arthur said she later received an email from the hotel asking her to post a review, and she did.
She told the Attorney General’s office that she took the post down upon receiving a threat of legal action from Szakaly, and that her credit card was charged an extra $350 in April.
On Dec. 15, Attorney General Curtis Hill filed a complaint in Brown Circuit Court against Abbey Management Inc., alleging that it violated Indiana’s Deceptive Consumer Sales Act.
The Attorney General wrote that inn’s policy “not only attempted to limit negative online reviews, thus improperly shielding the defendant from the consequences of providing consumers with a negative experience or unsatisfactory consumer service during their stay, but would also prohibit a consumer from filing a consumer complaint with the Attorney General or Better Business Bureau, filing a lawsuit, or even a police report, as all could be considered a ‘disparagement in a public manner.'”
Szakaly is a longtime Brown County attorney. It was announced earlier this fall that he is stepping down at the end of the year as the county’s chief deputy prosecutor.
He said in a written statement this afternoon that the policy was in place between the fall of 2015 and the summer of 2016, and it came about because of what’s known in the hospitality industry as “social media blackmail.”
“More and more frequently, a guest would complete their stay, leave without making any complaints regarding their stay, then later demand a refund or they would post negative comments regarding the Inn on social media,” he wrote.
The policy asked guests to notify inn staff if they had any problems during their stay so that staff could address the problem, Szakaly said. Guests were given a phone number to call to report problems if they couldn’t find a staff person, he said.
Arthur told Indianapolis TV station Channel 6 that she tried that number and it “automatically went to a lawyer’s or something weird like that.” The Attorney General’s complaint says that calls went unanswered.
“Should the guest fail to do so (report problems) during their stay, and later published a false statement regarding the inn and failed to remove the false statement after a request to do so, as was the case with Ms. Arthur, that guest authorized Abbey Management Inc. to charge that guest no more than $350 as ‘liquidated damages’ for their published false statement,” Szakaly wrote.
The Attorney General’s lawsuit alleges that the hotel did not provide guests with a copy of the policy and it was not posted in rooms or common areas.
Szakaly said that at the time Arthur visited, prospective guests were required to confirm that they had read the complaint policy when they booked and when they arrived for their stay. The policy was published on the inn’s website and repeated on the online booking site, he said.
The Attorney General is seeking a permanent injunction barring the inn from enforcing this policy — which Szakaly says it no longer has — court costs, and civil penalties of $5,500 per violation payable to the state.
Szakaly has been in the process of selling the inn to his daughter, Amanda Sweet.
Sweet told the Indianapolis Star that she’s been getting death threats because of media coverage of this situation. TIME Magazine, FoxNews.com and Fortune also published pieces about it online this week.
“It’s a shame that the actions of a disgruntled guest, taken 22 months ago, will now damage the hard work and devotion of the new, young management couple who had nothing to do with that guest or that policy which has long since been cancelled,” Szakaly wrote.
“It’s also disappointing that a state Attorney General has jeopardized the existence of a local small business and its employees by inserting itself in the relationship between a business and its customers.”
Indiana Attorney General’s office filed investigatory paperwork with Brown Circuit Court in April 2017 regarding this issue. The paperwork shows that as early as September 2016, the state was asking Szakaly for records such as every bank account the business owns, every account set up to accept debit and credit cards, all transaction histories for the past two years, and every shareholder’s and employee’s name.
Szakaly repeatedly questioned the state’s legal right to have access to these materials in those email exchanges. “Your decision as to your office’s policy in this area will have far-reaching effects on our state’s service and professional industries and will likely receive media attention,” Szakaly wrote in a letter directly to Hill on Jan. 28, after exchanging emails over several months with Hill’s staff.
Szakaly asked Hill to have a Brown County judge determine whether the state could “demand several years’ worth of guests’ personal information as well as a lodging establishment’s financial records.
“The court could also instruct the parties as to the constitutional constraints which may apply to the Attorney General’s desire to impose restrictions on the parties’ ability to freely enter into contractual arrangements,” Szakaly wrote.
In a February letter, Szakaly also suggested that the Attorney General’s office should recuse itself from this matter because he was being paid by the state as a chief deputy prosecutor for Brown County and was “thus represented by” the Attorney General’s office.
The Consumer Review Freedom Act, passed in November 2016, prohibits companies from having policies which restrict customers from posting honest, critical reviews.
Online review site Yelp tells its users that “reviewers who share their experiences have a First Amendment right to express their opinions.”
Hill issued a press release this evening asking consumers to contact his office if they have “been penalized for posting truthful online reviews of goods or services they have received.”
“People have the right to truthfully complain about bad service,” Hill said.