FTC looks to tamp down these 7 deceptive review practices with new rule

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by Sheila Long O’Mara

WASHINGTON, D.C. – In a move designed to crack down on misleading and deceptive advertising, the Federal Trade Commission has proposed a new rule to prevent marketers from using fake reviews, suppressing legitimate negative reviews and paying for positive reviews.Consumers often rely on online product reviews to determine whether or not to purchase an item. Websites selling mattresses and home furnishings are filled with reviews sharing ratings of quality and comfort, as well as delivery successes and woes. Companies who are using less-than-honest reviews may be facing penalties of up to $50,000 per infraction if the FTC’s proposed rule is finalized.

Under the proposed rule, the commission is targeting seven deceptive practices that brand marketers have been using to encourage consumer sales. Those types of reviews deceive consumers who are looking for real feedback on products or services, the commission said.

The commission, through its notice of proposed rulemaking, is seeking comments on the measures designed to prohibit these seven practices. Comments on the proposed rule have to be received within 60 days of its publication in the Federal Register, after which the FTC will decide whether to issue a final rule.

1 Selling or Obtaining Fake Consumer Reviews and Testimonials

The rule would prohibit business from writing or selling consumer reviews or testimonials from someone who doesn’t exist, have experience with the product or service; or who misrepresents their experience.

2 Review Hijacking

Businesses would be prohibited from using or repurposing a consumer review written for one product and using it for another. The FTC recently brought an enforcement action against a vitamin company for review hijacking.

3 Buying Positive or Negative Reviews

Under the rule, companies would be prohibited from paying or offering other incentives for writing reviews expressing a particular sentiment, either positive or negative.

4 Insider Reviews and Consumer Testimonials

Companies would be prohibited from having company insiders write product or service reviews without disclosing their relationship with the company, as well as disallow posting testimonials by insiders without full disclosure. Company managers or officers would also be prohibited from asking employees or their relatives to post or share reviews.

5 Company Controlled Review Websites

Businesses would be prohibited from creating or controlling a website that claims to provide independent opinions about a category of products or services that includes its own products or services.

6 Illegal Review Suppression

Under the proposed rule, companies would be prohibited from using legal threats, other intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule also would bar a business from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been suppressed.

7 Selling Fake Social Media Indicators

Businesses would be prohibited from selling false indicators of social media influence, like fake followers or views. The proposed rule also would bar anyone from buying such indicators to misrepresent their importance for a commercial purpose.

“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.  “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”