Far too often it can be difficult to know whether the online reviews we see are from real people, real customers, or if they are honest, or written by someone incentivized to write a positive (or even negative) review.

Dishonest practices regarding business and product reviews are already illegal under Section 5 of the FTC Act, however, modern technology makes it easy for businesses to manipulate the system.  In response, the Federal Trade Commission (“FTC”)  issued a new rule clearly outlining deceptive practices, authorizing courts to impose civil penalties for knowing violations, strengthening enforcement actions, and imposing a deterrent effect on those acting in bad faith.

WHAT YOU NEED TO KNOW:

1. Fake Reviews: Writing, selling, or purchasing fake consumer reviews or testimonials is prohibited;
2. Incentivizing Reviews: Whether expressly stated or just implied, businesses are prohibited from paying for or otherwise incentivizing customers to provide either a positive or a negative review;
3. Insider Reviews: If a review or testimonial is written by someone associated with the business (i.e. employees, relatives of employees, managers, etc.) they must clearly disclose their relationship within the review or testimonial;
4. Company Controlled Review Websites: Businesses are prohibited from pretending or claiming that a review website it controls is independent;
5. Suppressing Reviews: Businesses are prohibited from making unfounded or groundless legal threats, physical threats, intimidation, or public false accusations to prevent posting bad reviews or cause the removal of all or part of a review.

   a. Additionally, if negative reviews or low ratings are hidden or suppressed on a business’ website, the business is prohibited from claiming their website represents most or all reviews they have received.

6. Fake Social Media Influence: Selling and procuring fake indicators of social media influence is prohibited.  Meaning businesses cannot utilize fake followers or views such as those generated by a bot, a hijacked account, or otherwise do not reflect a real individual’s or entity’s activities or opinions.

The new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials became effective on October 21, 2024.  Any deceptive or unfair practices involving reviews or testimonials which the rule does not specifically cover are still subject to the FTC Act.  (https://www.ftc.gov/legal-library/browse/statutes/federal-trade-commission-act)

Businesses need to be aware of the rules and make sure they are honest and transparent so consumers can confidently make informed decisions.