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State wins case against hotel operator who charged customers for negative reviews

Posted at 3:58 PM, Mar 01, 2019
and last updated 2019-03-01 20:28:25-05

BROWN COUNTY — The Indiana Attorney General’s office has won its case against a Brown County hotel operator who charged customers for negative reviews.

As Call 6 Investigates reported in 2017, customer Katrina Arthur was shocked to see a $350 charge after leaving an unflattering review about the Abbey Inn in Brown County.

The Indiana Attorney General’s office filed suit against Abbey Management in 2017, alleging the hotel operator violated Indiana’s Deceptive Consumer Sales Act by enforcing a customer review policy that was “unfair, abusive, and deceptive.”

PREVIOUS | Customers charged $350 after leaving a negative review for Brown Co. hotel, lawsuit alleges

On Thursday, a special judge approved a final agreement in the case in which Abbey Management’s president agreed to refund $350 to Arthur.

“I am glad I stood up not only for me but others,” said Arthur on Friday in response to the outcome of the lawsuit. “I am very happy that this no longer will happen to anyone who wants to leave a review and that no one will be wrongfully charged anymore.”

The Attorney General’s office released a statement to RTV6.

“We are pleased to see a resolution of this case that recognizes that people have the right to truthfully complain about bad service,” Attorney General Curtis Hill said in a statement to RTV6. “No one should be afraid they might be penalized for exercising this right."

In the agreement reached this week, Abbey Management admitted it maintained a written policy in 2015 and 2016 that allowed the hotel operator to charge customers $350 for a review that “disparages us in a public manner.”

In addition to the consumer restitution for Katrina Arthur, the judge granted a judgment of $5,000 to the Indiana Attorney General for expenses incurred in the investigation and prosecution of the case.

The agreement included a $5,000 judgment for civil penalties in favor of the State of Indiana.

As part of the agreement, Abbey Management is barred from using any policies that “prohibits a consumer from making non-defamatory negative statements or reviews regarding their sty under the threat of financial penalty.”

Abbey Management can’t initiate any future legal action if a consumer makes a negative review, per the agreement.

Joe O’Connor, attorney for Abbey Management, declined to comment to RTV6 about the agreement.

Andrew Szakaly, president of Abbey Management and former attorney for the company, surrendered his law license for the next five years amid allegations of professional misconduct.

PREVIOUS: Ex-prosecutor surrenders law license amid misconduct allegations

Szakaly’s daughter, Amanda Sweet, took over the Abbey Inn’s operations in January 2017.

Sweet told Call 6 Investigates the backlash has been so strong, she planned to close the hotel and reopen under a new name.

The Abbey Inn closed its doors and removed its signage and following renovations, it reopened as The Yellowwood.

Szakaly told Call 6 Investigates in previous interviews he put the complaint policy in place for a reason.

“Several years ago the Inn began to experience what has become known in the hospitality industry as ‘social media blackmail,” read the statement. “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. In an attempt to meet the guest's needs while protecting itself from false reviews, the Inn, between Fall 2015 and Summer 2016, required prospective guests to confirm they had read the Inn's ‘complaint policy’ (published on the Inn's website & repeated on the online booking site) when they booked online and when they arrived for their stay.”

Szakaly said the policy, which ended in the summer of 2016, requested guests notify the Inn staff of any problems during the guest’s stay and allow the staff to address the problem.

“If the guest could not find a staff person, the guest was also given a phone number to call to report any problems,” said Szakaly in a statement to RTV6. “Should the guest fail to do so 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, that guest authorized Abbey Management Inc. to charge that guest no more than $350 as ‘liquidated damages’ for their published false statement.”

The Indiana Attorney General is asking anyone who believes they may have been penalized for posting truthful reviews online to contact his office by going online to indianaconsumer.com or by calling 1-800-382-5516.