6 David and Goliath Stories From the Corporate World
Every now and then, the little guy (or gal) wins.
Hasan Syed Vs. British Airways
Back in April, we reported on how corporations are on better behavior than ever before: "It's not that the powers that be have all experienced some collective spiritual awakening. It's not even that they've gained a newfound respect for their customers. It's that, thanks in large part to social media, when they screw up, we the people now have the chance to make a big, fat, lingering stink."
Well, sometimes making a stink takes a little cash, too.
When British Airways (OTCMKTS:BAIRY) lost a Chicago businessman's family's luggage en route to Paris and refused to answer his emails, he harnessed his Twitter account to get it back. Hasan Syed spent more than $1,000 on promoted "Don't fly @BritishAirways" tweets targeted to 50,000 Twitter users in New York and the UK with a barrage of messages about its "horrendous" and "pathetic" customer service.
Major media outlets picked up the story, other disgruntled customers began commiserating, and voila -- British Airways sent this reply: "Sorry for the delay in responding, our Twitter feed is open 0900-1700 GMT. Please DM your baggage ref and we'll look into this."
With a tweet that can only end up biting him in the you-know-what, JetBlue's (NASDAQ:JBLU) SVP of marketing, Marty St. George, weighed in on the story. "Interesting; a disgruntled customer is buying a promoted tweet slamming a brand where they had a bad experience. That's a new trend itself!"
Julie Miller Vs. Equifax
What do you get when a credit bureau refuses to fix serious errors on your credit report? According to a federal jury in Oregon, $18.4 million.
In one of the biggest judgments in legal history against a consumer credit agency, Julie Miller successfully sued Equifax Information Services (NYSE:EFX) for dragging its feet on correcting misinformation that ruined her reputation and blocked her access to credit. On eight separate occasions between 2009 and 2011, Miller tried to get Equifax to sort out mistaken identity accounts, collection attempts, and even a wrong birthday and Social Security number.
Given that as many as one in five people have similar mistakes in their credit reports, only 20% of whom manage to get them corrected, this verdict could be the push credit bureaus need to get serious about protecting the rest of us Davids from fraud.
Heather Peters Vs. Honda
Heather Peters' case is a win-turned-not-total-loss. Lured into purchasing a 2006 Honda (NYSE:HMC) Civic because of its 50 MPG gas mileage advertising claim, Peters found her hybrid sedan never reached that level of fuel economy -- in fact, she saw a reduction in gas mileage after Honda performed a software update on the car to sustain its battery life.
The former lawyer opted out of a class action settlement against Honda that would have reaped a $200 reward and instead took the auto giant to Small Claims Court in 2012 where she got nearly 50 times that amount. In his 26-page decision, a California judge cited a list of Honda's "misleading representations" that the Civic would use "amazingly little fuel" and awarded Peters $9,867 in damages. Suddenly, Peters was making headlines around the country as the consumer underdog who took on a corporate behemoth and won.
But the "victory for all Honda Civic owners," as it was called, was soon stripped away by a Superior Court that sided with Honda's file for an appeal and overturned the previous judgment.
While Honda may have won this particular battle, Peters started a war that will have the car company mired in litigation for the foreseeable future. Her DontSettleWithHonda.org website has inspired dozens of other wronged Civic owners to pursue their own legal fights in Small Claims Court -- a venue that bars lawyers from participating. Now Honda is being forced to devote resources to training non-attorney employees on how to mount a courtroom defense and, when the automaker loses, having to lawyer up for appellate court.
Personally disappointed with her ruling, Peters still doesn't regret the lawsuit and believes it was "effective to get the news out. It got a lot of people engaged. I am glad I did it."
800,000 Netflix Users Vs. Netflix
New consumer technology and media have certainly had their share of growing pains. With one really bad executive decision, Netflix (NASDAQ:NFLX) went from the darling of the DVD rental world to its biggest villain in July 2011.
The announcement of a new fee structure would split video streaming and DVD rental from one bundled service into two separately charged plans, and add a 60% price hike to the bill. The DVD-only business was named Qwikster. Well, hell hath no fury like a scorned customer with a social media account. The widespread bashing in the comments section of Netflix's Facebook (NASDAQ:FB) page mushroomed into a mass exodus that took 800,000 subscribers and 75% off its bottom line.
By mid-October, Netflix couldn't weather the firestorm any longer and killed Qwikster in the crib, and returned the red envelope mail service to its regularly priced line-up.
Jes M. Baker Vs. Abercrombie & Fitch
"A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely."
In a moment defined by an astounding lack of forethought and PR savvy, Abercrombie & Fitch (NYSE:ANF) head Mike Jeffries made that confession about his target customer during a 2006 interview with Salon. The senior citizen CEO -- whose plastic-surgery-bungled face apparently hasn't seen the reflective side of a mirror in a few years -- set the record straight that his image-conscious brand is meant exclusively for "the cool and popular kids... good-looking people."
For the female shopper tipping the scales at anything over a size 10, Jeffries wants you to know that his brand is totally not you. The A&F clique is, like, way out of your league.
Jes M. Baker of the Militant Baker blog presented an artistic difference of opinion on beauty ideals by posing with model John C. Shay in a mock Abercrombie & Fitch ad campaign called Attractive & Fat. The slick, black-and-white photos shot in the retailer's suggestive style created a media frenzy and turned the size 22 Baker into a spokesmodel for the full-figured woman.
Meanwhile, Abercrombie & Fitch has been finding it harder and harder these days to get a seat at the popular table. Last month, the company reported worse-than-expected earnings and revenue, with same-store sales taking a double-digit nosedive during the second quarter. The cool kids are turning their backs on the brand in favor of hipster havens Urban Outfitters (NASDAQ:URBN), Forever 21, and H&M (STO:HM-B) -- of which the latter two offer plus-sized fashions.
So Jeffries' company went from high school trendsetter to social outcast -- John Hughes couldn't have written this last act better himself.
Dmitry Agarkov Vs. Tinkoff Credit Systems
In 2008, Dmitry Agarkov of Voronezh, Russia, received a letter from Tinkoff Credit Systems in his mailbox. It was a credit card application form with an agreement contract enclosed, much like the applications Americans receive daily from Visa (NYSE:V), Mastercard (NYSE:MA), American Express (NYSE:AXP), and Discover (NYSE:DFS). Agarkov filled in the form and returned the signed application, though what he sent back was not exactly the same document the bank had sent him.
Agarkov changed some parts for his own benefit -- most notably, the small print. He opted in for a 0% APR and no fees, and added that the customer "is not obliged to pay any fees and charges imposed by bank tariffs." He also changed the URL of the site where the terms and conditions were published fromwww.tcsbank.ru to tcsbank.at.ua. Finally, he added a special clause that would protect him should the bank not honor the agreement. For each unilateral change in the terms provided in the agreement, the bank would be asked to pay the customer (Agarkov) 3 million rubles (about $91,000), or a cancellation fee of 6 million rubles ($182,000).
Agarkov then sent his updated agreement to the bank, and shortly thereafter received the bank's signed and certified copy, as well as a credit card.
Agarkov used the card for two years before the bank closed his account. According to Tinkoff Credit Systems, Agarkov was late paying the minimum required payments every month. In 2012, the bank sued Agarkov for 45,000 roubles ($1,363) – an amount that included the remaining balance, fees, and late payment charges. Surprisingly, the court did not side with the powerful bank in this case. It decided that the agreement Agarkov had crafted was valid, and only required Agarkov to settle his balance of 19,000 rubles ($575).
But the squabble did not end there. Agarkov's story made headlines around the world and was a favorite topic on social media sites. Agarkov started proceedings to try and claim a larger settlement -- to be paid by the bank -- per the terms he had added to his personalized contract. The bank's founder made some unflattering comments about his most famous client on Twitter and Agarkov threatened to sue him again. Eventually the two parties were able to settle their differences and call an end to the media circus. By then, Agarkov had become a kind of folk hero.
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