The FTC Bans Fake Reviews. What Does It Mean for Consumers?

The FTC has recently finalized the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials that will enhance their ability to tackle fake and fraudulent online reviews. Following extensive hearings discussing the prevalence and economic impact of deceptive review practices, this update to the existing regulations represents a significant development in efforts to restore consumer trust. 

It’s positive news in general that the FTC bans fake reviews and testimonials, but how will this development affect you, the consumer, specifically?

Key Insights

• Fake reviews litter the online review space, weakening a consumer’s ability to make informed choices.
• Several new measures will give the FTC greater powers to investigate and take punitive actions against offenders.
• Compliance with the new ruling should vastly reduce the amount of paid-for reviews and other deceptive practices, empowering consumers.

What Is a Fake Review?

A fake review is an attempt to influence consumers through a misleading or deceptive evaluation of a company or its product. Generally, these types of fake reviews/testimonials are fabricated by persons who receive payments to write positive reviews to boost a company’s online visibility and rating on review platforms, and, thereby, present a false image to consumers. 

A recent PissedConsumer survey has revealed that 88% of consumers know about the prevalence of fake reviews, highlighting perhaps their most detrimental impact – eroding consumer trust in online reviews and severely reducing their usefulness.

The Key Points of the FTC’s New Rule Against Fake Reviews

The FTC rule on fake reviews gives a greater scope and a clearer mandate to investigate and take punitive measures against entities that purchase or sell fake reviews.

Incentives

Rewards offered to customers in exchange for a review must not be conditional. For example, while asking the customer to leave a review, the company should clearly disclose what the customer may get for writing a review, providing this customer the freedom to write whatever review he or she wants. 

Negative review suppression

The stipulation on review suppression forbids businesses from making baseless threats (legal or otherwise) or untrue accusations as a means of censoring or influencing the sentiment of a review.

Insider contributions

The FTC guidelines state that if an author of a review has an interest in the business being reviewed, be they an employee, family member, or an individual representing a commercial interest, this link must be made unambiguously clear.

Shill review websites

Misleading the public through the use of a fake review website that disingenuously claims to provide unbiased, unaffiliated reviews of a company or its products whilst actually being run or having clear links to the company itself, is prohibited.

Social media manipulation

The ruling also tackles the unethical manipulation of social media metrics such as likes and shares to create a false impression of popularity and influence.

How the FTC’s Fake Review Rule Protects Consumers

The FTC rule aims to further protect consumer rights and advance several important benefits to the purchaser:

Transparency

With stricter consequences and the increased likelihood of enforcement, the onus is on businesses to take greater measures to ensure that their online reviews are the real deal. This stricter compliance means that the chances, that testimonials you find browsing an online review platform are documenting real experiences of real people, are going up.

Freedom of speech 

Businesses can no longer strongarm you to remove or edit a negative review by directing spurious threats of legal action or other intimidatory tactics at you. This rule should also help provide a proper balance of sentiment in online reviews, as the only legal recourse left on the table is to engage with the reviewer to address consumer issues in a genuine manner.

Be better informed 

When applied properly, this FTC legislation will weed out dishonest businesses, ensure more rigorous upholding of consumer protection laws, transparency, and authenticity of customer reviews about brands, and will help enhance consumer trust in reviews. 

Whether they are good or bad, the point is that online reviews should reflect true experiences with brands, and with that be a genuine source of information that consumers can rely on when making their purchasing decisions.

Your Voice Matters

Whether you’re writing a review of your own or reading one, you can now do so with greater assurance that there’s legislation to protect consumer voices. If you think your own experiences may be useful to other smart consumers, we welcome you to share your thoughts with us on PissedConsumer, where we can help you get started with our how to write a review guide.