Q: Predatory Customer Threatening Small E-Commerce Business With Legal Action
Customer filed dozens of fraudulent damage complaints, filed disputes with PayPal and the BBB and broke our business terms of service so we banned them. One month later they created a new account on our e-commerce website using their wife's maiden name and repeated the process of placing dozens of orders/pre-orders, then filing damage complaints even when the orders were packed extremely well. Eventually we started taking photos of all their items prior to shipping and getting insurance which stopped most damage complaints. They tried to extort money out of our business by asking for "cash" refunds on orders placed with gift cards and asking for refund amounts higher than what they spent. We banned them for a 2nd time recently even though they have $10,000+ in preorders and now they're threatening legal action. We are in the process of refunding all of their preorders over the next 90 days. Do they have any legal recourse if we refund all of their outstanding orders/preorders?
A: If you're being sued, hire an attorney to represent you in court. [I litigate cases. Anything posted here must not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should seek an attorney for formal legal advice and representation.]
A: They can file a lawsuit (anyone can) but it doesn’t mean they will win. It’s not clear what they would sue you for (especially if you are refunding). You may need to consult with and have a business attorney on retainer as it’s just a smart thing to do for anyone who owns a business. A letter from a lawyer may also stop them in their tracks.
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