Legal Question in Consumer Law in District of Columbia

Hi there--interesting problem. First, without doing the necessary legal research, it sounds right to me that a merchant can require return before refund or replacement; some merchants--cell phone sellers, for instance--will vary that policy voluntarily, but that doesn't invalidate the rest.

Second, I understand one of your concerns is that a group of consumers would try, or are trying, to pressure you by threatening consumer claims that you'd have to spend money defending even if they're baseless. You already know theft and extortion are crimes. If the crime didn't actually happen, a would-be thief or extortionist can still be convicted for the attempt if the facts are there. You can simply contact the U.S. Attorney's office in D.C., assuming that's where you are (that office prosecutes D.C. charges in D.C. court, as well as federal charges in federal court.)

Third, on the civil side, if you've suffered harm you can measure in dollars, you could sue for money damages in that amount. This would likely require an economic expert, and on the facts given I'm pessimistic about your chances since these losses are notoriously hard to prove even if the behavior has gone on a long time. Also, there's no longer a strict lawyer-ethics prohibition on threatening to bring criminal charges to gain an advantage in a civil case, but it's ethically slippery and generally inadvisable--better just to press the criminal charges, see where they fall, then pursue a civil remedy.

Your predicament, to the extent it includes nasty reviews of your company that are essentially fake, reminds me a little of Joe Hadeed, the dry cleaner in the Virginia Yelp case. See http://thinkprogress.org/justice/2014/10/30/3586316/yelp-lawsuit-anonymous-comments/. You might have difficult litigation ahead of you if you tried to get PayPal to divulge private info about connections among the various disgruntled customers. But you'd be in better shape than Hadeed, because you've got the customers' names and can prove at least some of what you suspect they were up to. If you think PayPal didn't act quickly enough to hide or delete the damaging reviews, you'll need to measure that, too, in dollars.

There's more to explore here, but I hope this thumbnail helps you think about all this. Permit me to add one thing: Consumer deceptions can come in lots of flavors, and state consumer protection statutes (D.C. has a pretty strong one) can be invoked to challenge them. Plus you have your own ethical values, I have no doubt, and disclosing country of origin seems like a good value to uphold. So by all means look over your sales materials for whether they could mislead or deceive a reasonable consumer about something relevant to their product choice. Protects you from nasty claims without necessarily strengthening the ones these nasty folks seem to want to bring, and it's the right thing to do.

Good luck, and feel free to contact me if you'd like to bat it around some more. --Steve Pershing.