Wednesday, November 27, 2013

Down The Rabbit Hole With Kleargear.com

A bizarre story hit the news this week, just in time for the holiday shopping season. A couple has been fined $3,500 and had their credit destroyed for leaving a bad review about the website Kleargear.com, a marketplace claiming to sell funky gadgets.
KlearGear.com didn't deliver Palmer's online order of a desk ornament that was less than $20, so it cancelled the transaction in Dec. 2008. Jen Palmer, now 40, wrote a negative review on private business review site RipoffReport.com, saying KlearGear.com had "horrible customer service practices."
"Once we put the review up we pretty much forgot about it." Then last summer, her husband, John, a senior network engineer, received an email from KlearGear.com demanding $3,500 pursuant to a non-disparagement clause that it claimed was in its "Terms of Use" on its website. "We were blown away," Jen Palmer said...
Allegedly, the company contacted credit bureaus about the $3,500 debt, and that helped destroy the Palmers lives.
 The Palmers said the mark on their credit history affects their ability to obtain loans, most recently for a financing plan for a new furnace. As a result, last month the couple and their 3-year-old son were without heat for three weeks until they saved the $1,900 to buy a furnace.
"Utah in October gets very cold pretty quickly," Jen Palmer said.
The whole story makes little sense. If Kleargear is trying to prevent negative reviews from damaging their reputation... hounding a family into the poor house is not exactly helping matters. The negative PR from this debacle greatly outweighs one negative online review.

But oh man, if you think that's where the story ends, you've got another thing coming...

Internet sleuths quickly got to work unraveling the mystery behind the site's shady owners. And I mean shady. You'd think that a business claiming to make tens of millions of dollars a year wouldn't hide their CEO, their physical location, and their employees... but you'd be wrong.

Lee Gersten, the president of Kleargear? There's no trace that he actually exists. The address of the company is a mail forwarding service. Even the "parent company" is nothing more than an address offering "virtual office space" in France, to companies located elsewhere. Ken White and his friends at Popehat dug deeper:
Here are the problems with KlearGear's display of the TRUSTe certified privacy seal:
1. A source within TRUSTe informs me that genuine seals are clickable links leading to a certification page; this is just an image on KlearGear's page.
2. KlearGear is not in TRUSTe's searchable database of certified sites.
3. My source within TRUSTe confirms that KlearGear.com has never been TRUSTe certified.
Actually, they determined that most, if not all of the dozens of certification and verification badges displayed on the site are fake:
As of November 28, 2012, the BBB discovered that some pages of the company's website display the BBB Accredited Business Logo and state "BBB Rating A+", when neither is true.
The BBB contacted the company at the Michigan mail drop address instructing the company to immediately remove the incorrect BBB logo and reference from their site.
This matter is currently pending.
In fact, some of the seals are completely bogus:
An image search [for] the 5 Star eTAILER Ratings shows that the only place using that seal is KLEARGEAR.
Even the letter to the Palmers demanding payment for the fine is bogus!
One of the collection agents of the purported Kleargear "legal department" signs himself Stephen Gutman, of Fishman group attorneys... He is listed with the Michigan bar here:
http://www.michbar.org/memberdirectory/detail.cfm?PID=14480
He's the only Stephen L. Gutman licensed to practice law in Michigan. The contact information on the letter is that of the "The Fishman Group" however, though it does not match his bar info.
And, there's the fact that he's probably retired and in no way involved:
 The Stephen L. Gutman practicing in Michigan was licensed in 1967, and is likely to be [a] 70 yo gentleman.
You can try contacting the PR department at Kleargear, but don't expect to reach  Margaux Banet, the listed PR agent. She simply does not exist. None of the other names associated with the site appear to be real either, although the head of the parent company is also the name listed on a website for a collections agency... an agency that doesn't seem to actually exist.

Has anyone EVER received a product from Kleargear? From what I can tell, the only evidence the company exists at all is their website and dozens of press releases sent out under that name. News and blog sites have featured products from the company... but it seems like all their copy, photos, even quotes from the people involved, all come from these press releases.

Here's the $3,500 question: What is going on? If this is, and always has been, a fake eCommerce site, with the sole purpose of grifting customers out of money, then it makes sense they would send an email to the Palmers demanding more money. But contacting the credit bureaus? That seems to go beyond the normal scam.

Is it possible that this is the scammer's M.O? They use a fake lawyer from a fake collections agency to contact the credit bureaus, and suddenly, the fake debt becomes real. The credit bureaus are enlisted in putting pressure on the scam victim, and the scammer increases his odds of getting paid.

According to Experian, part of the approval process to be able to report debts to the agency includes a "physical inspection where a 3rd party must come to your location and perform an inspection for security purposes." So before Experian could take the Palmers' debt seriously, they'd have to have a report from a 3rd party affirming Kleargear.com actually existed. In addition, there are a lot of registration requirements which would seem to deter any scammer who didn't want to leave a paper trail. But what if the scammer behind Kleargear found some loophole? A way to trick the system into accepting false collections claims?

Anyone know if this would be a possibility? Are the credit bureaus that easy to hoodwink?

This is going to somehow lead back to Nigeria. I just know it.

2 comments:

Anonymous said...

How did this company get on the INC 5000 though if it's a fake ecommerce site. This whole story is way too weird.

Anonymous said...

KlearGear seems to be owned by Chenal Brands, which also has an offshoot company called Chenal Media. KlearGear also seems to have some sort of affliation with Havaco Direct, Inc. Chenal Brands is a Germany-based company. Chenal Media is supposedly based out of Los Angeles.

KlearGear.com President Lee Gersten.

CEO of Chenal Brands Will Bermender. William.Bermender@Havaco.com (214) 432-7923

Media Relations - Rob Key Phone (616) 965-2426 Fax (616) 965-2427

Kleargear physical address - 2885 Sanford Ave SW Suite #19886 - Grandville, MI 49418 (888) 553-2743

Chenal Media address - 5042 Wilshire Blvd #19886 in Los Angeles. (thanks to MultiUseAccount)

Old Address - 10 W Ste San Antonio, TX 78230 (214) 432-7923

Another Address - 7122 Oaklawn Drive, San Antonio, TX 78229-3021

Numerous domains registered under Bermender's name at 7122 Oaklawn Dr. in San Antonio, TX.

Both the LA and MI addresses are mailbox services, yet they both have the same number, #19886.

It seems like Will Bermender deleted his LinkedIn account. Seems like they deleted their Facebook page, then restored it later. In the mean time, they had created a second Facebook page. So now they have two accounts there. The company's Twitter account has all their tweets protected.

Bermender's LinkedIn:

Executive Chairman

Chenal Media

August 2012 – Present (1 year 4 months) Greater Los Angeles Area

Board Member

Mix Kicks

May 2012 – Present (1 year 7 months) San Antonio, Texas Area

CEO

Chenal Brands

2006 – August 2013 (7 years)

Chief Revenue Officer & Senior Operating Partner

Haniel Industries

2005 – June 2012 (7 years) Greater New York City Area

Board Member

Shopscape

2010 – December 2011 (1 year)

CCO

Chenal Brands

2005 – 2006 (1 year) San Antonio, Texas Area

Vice President

Comcast Cable Communications, Inc.

Public Company; 10,001+ employees; CMCSA; Media Production industry

2004 – 2005 (1 year) Greater Detroit Area

Vice President

ShopNBC

Public Company; 501-1000 employees; VVTV; Retail industry

2003 – 2004 (1 year) Greater Minneapolis-St. Paul Area

Vice President

Denmore

2001 – 2003 (2 years)

Director

Cendant

Public Company; 10,001+ employees; CD; Leisure, Travel & Tourism industry

1999 – 2001 (2 years) Little Rock, Arkansas Area

Quite possible that he made all those things up, and never worked at those companies.

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