May 28, 2010 -- A Michigan business is learning the hard way that one simple Facebook page can pack a whole lot of punch.
Since January, a Facebook page created by a Western Michigan University student for Kalamazoo residents to complain about a local towing company has swelled to more than 12,000 members. Now, the company, T & J Towing, is suing the student for $750,000, saying the "libelous and slanderous" site is causing it to lose income.
Justin Kurtz, the 21-year-old student who launched the site, said it all started back in January, when T & J Towing hauled away his car from his apartment building's parking lot, claiming that he didn't have a parking permit.
But claiming that the company scraped off the parking sticker so that he would have to pay $118 to retrieve the impounded car, he said he complained to his building's management and then to the police.
He said he showed the police a portion of the sticker still in his windshield and explained that his parking permit came with his apartment.
After trying to work with the company with little success, he decided to turn to Facebook, creating a page that says it's, "For every resident who was legitimately parked where they are supposed to be but were still towed by this company."
"It's social media," he said. "I could invite my friends, who would hopefully invite their friends, to see if there's more evidence of this happening to other people."
Towing Company: Kurtz's Allegations Are Untrue, Without Merit
Within two days, he said, about 800 people joined his page, "Kalamazoo Residents against T & J Towing."
As more and more local news outlets covered the story, he said, the membership continued to climb.
From the comments left on the page, Kurtz said, he doesn't think he's the only one who has had problems with the company.
"I was just the first one to get enough attention to do something about it," he said.
But in a lawsuit, Joseph Bird, owner of T & J Towing, said Kurtz has "made his crusade to post verbal and written claims and misuse of the Internet with allegations that are untrue and/or dishonest and without merit."
The lawsuit, filed in April, requests that Kurtz pay T & J Towing $750,000 in lost income and "immediately cease and desist any further libelous and slanderous written claims."
Student Files Countersuit, Claiming Company Is Violation Consumer Protection Act
Richard Burnham, Bird's attorney, told ABCNews.com that T & J had lost a "substantial" number of clients.
"Mr. Kurtz made false accusations. We towed his car for a violation and he claims falsely that we tampered with his car to put him in violation and that's just not the case," Burnham said. "We've lost 10 to 15 good clients that we used to tow for as a result of his false accusations."
He said that while it's difficult to project future earnings, he estimated that the company would lose about $750,000 because of Kurtz's Facebook page.
Burnham added that it didn't matter that Kurtz is a college student with an $8.75-an-hour part-time job.
"It's got nothing to do with his ability to repay us," he said. "The genie's out of the bottle now. That's the problem. We'd like at least the court to request that he cease with his false accusations."
Burnham said the court should recognize the financial loss, so that if Kurtz could pay in the future, T & J could recoup lost income.
Better Business Bureau Gives Company 'F' Rating
In response to T & J Towing's suit, in late April, Kurtz filed a countersuit, claiming that the company is violating the Michigan Consumer Protection Act and abusing the legal process.
Kurtz said he isn't seeking significant damages, only enough to cover his legal fees and the initial $118 he had to pay to retrieve his car.
"Truth is a good defense to the defamation [charge]," said Christopher Vreeland, Kurtz's attorney. "Essentially, this is a frivolous and baseless claim."
He said that while T & J has called the Facebook page libelous, the company has not singled out as untrue any specific statements on it from Kurtz or others.
Vreeland said that some of the posts on the Facebook page appear to describe experiences with the company that seem similar to what Kurtz alleges. When asked if he was considering a class action suit, he declined to comment, but said that he has been reaching out to people with similar grievances on the site.
And it seems that Facebook isn't the only place where people are lodging complaints against T & J Towing.
According to the Better Business Bureau of Western Michigan, the company has an "F" rating.
Social Media Helps People Resolve Problems, Get Results
The "BBB file contains a pattern of complaints in which consumers allege the company towed vehicles in error when either the vehicle had the required parking pass, or the vehicle was not parked in a designated no parking area," says a reliability report about the company available on the Better Business Bureau website.
Kenneth Vander Meeden, CEO of the Better Business Bureau of Western Michigan, said T & J has received more than 20 complaints in the last three years.
"That's quite a few," he said, adding that the company's file indicates that it has an "F" rating for not responding to complaints when contacted by the bureau.
"It's said that people are so unresponsive, rather than running a decent business," he said.
When asked about the rating, Burnham said, "The matters were over. …"It's an entirely one-sided non-productive thing."
Some marketing experts said that, especially in a world so defined by social media, neglecting customer feedback can be riskier than ever.
Erik Qualman, author of "Socialnomics" and professor at the Hult International Business School, said that T & J's lawsuit was "like waving that red flag in front of a raging bull."
"Whatever the verdict is, it is a lesson to companies that the consumer has more power than ever before," he said. "Folks want to be listened to, they want to be heard."
He said that research has shown that if companies can resolve an issue when a customer lodges a complaint, they will be five times more likely to become repeat customers.
But ignoring customer feedback can just fan the fire.
"People can be heard in ways that they never used to be," said Chris Brogan, president of New Marketing Labs, a new media marketing agency, and co-author of "Trust Agents: Using the Web to Build Influence, Improve Reputation and Earn Trust." "People have the opportunity to be heard in a public forum and cry out when they feel wronged."
Compared to writing letters to the editor or older methods of speaking out, he said, social media can be better at leading to results because it lets like-minded people find each other and directly broadcast their message far and wide.
But as valuable as it can be, he said, social media isn't without potential pitfalls.
Social media may give people a higher, more-visible soap box, but that attention can sometimes draw charges of libel and slander, he said.
"It's a powerful tool," he said, "but it's a caution-filled tool."