Ensuring Authentic Consumer Reviews
By: Paavana Kumar
In the wake of its updates to the Endorsement Guides, the FTC also recently announced a Proposed Rule on the Use of Consumer Reviews and Testimonials. Although the practices prohibited by the Proposed Rule are already unlawful under Section 5 of the FTC Act, the Proposed Rule is a hefty deterrent to non-compliance and allows the FTC to seek civil penalties of up to $50,000 per violation. The Proposed Rule would prohibit businesses from:
- Writing or selling fake reviews or testimonials by a person who (1) does not exist, (2) did not use the product or (3) misrepresented their experience with the product,
- Obtaining or disseminating reviews or testimonials that they know or should know are fake or false,
- Review hijacking, i.e., repurposing reviews for one product for a different product,
- Providing payment or other incentives conditioned on writing a positive or negative review,
- Having officers or managers write reviews or testimonials or solicit them from company employees or their relatives, and not properly disclosing insider relationships,
- Creating or controlling a website that purports to provide independent opinions about a category of products that includes their own,
- Suppressing negative reviews by unjustified legal threats, intimidation or false accusations and
- Selling fake social media indicators, including fake followers.
The FTC has also intimated that it will be paying special attention to AI use to generate reviews. While the FTC codifies these updates, companies should ensure that all featured consumer reviews are (1) verified to confirm that they came from real people, (2) not altered in a way that affects their original meaning, (3) transparent about their source and any “material connections” or incentives offered in exchange for the review and (4) representative.