Legal Question in Business Law in California

Re: Is it Legal to have a ''Blacklist'' of Slow/No Pay Customers?

It is not illegal to compile, sell, possess or use lists of companies that are poor credit risks; that's what Dun & Bradstreet has made a huge business of doing. The distribution of the list should be restricted, i.e. by furnishing only to association members or others with a bona fide need to know this kind of information. Further, the compiler and publisher may be liable for compensatory and punitive damages for publishing false and defamatory information. See Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., a 1985 U.S. Supreme Court case, for an interesting discussion of the liability of credit reporting agencies for reporting errors (published at 472 U.S. 749).

Re: Is it Legal to have a ''Blacklist'' of Slow/No Pay Customers?

I'd love to have one of those slandered companies hire me to bring legal action. This is a really foolish program for the association and the individuals involved.

Re: Is it Legal to have a ''Blacklist'' of Slow/No Pay Customers?

Maintaining such a list is legal, and so is making truthful reports about customers who pay slowly or not at all. (My answer might be different if the list named individuals rather than companies.) A member who makes a false report might be subject to a civil lawsuit, but the publisher of the list would not provided it did not know the report was false.