The stakes can be high when it comes to customer reviews. A low star rating with a negative comment can have a noticeable impact on potential clients. It can be tempting to push that negative review further down the list by posting newer, more positive reviews. If those reviews aren’t completely legitimate, however, you could find yourself on the Federal Trade Commission’s enforcement radar.
The consumer agency recently announced a major crackdown on this form of deceptive advertising. It has already sent notices of penalty offenses to over 700 companies, large and small, warning them that their fake reviews are illegally deceptive.
The penalty for the civil offense is up to $43,792 per violation.
The standard for who will actually be penalized is this: the company has engaged in conduct that it knows has been found unlawful in a previous FTC administrative order. And, the agency has helpfully provided resources for companies who want to ensure they’re complying with the relevant laws.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” says the FTC’s Bureau of Consumer Protection. “Advertisers will pay a price if they engage in these deceptive practices.”
What counts as a deceptive or unfair customer review?
Basically, a customer review is an endorsement of your product or service, and there are rules for fair endorsements. For example:
- You can’t falsely claim someone has endorsed you
- You can’t misrepresent whether the endorser is an actual, current or recent user
- You can’t keep using an endorsement after you have reason to believe the endorser has changed their opinion
- You can’t use an endorsement to make deceptive performance claims
- You must disclose it if you have an unexpected, material connection with the endorser
- You can’t misrepresent that the endorser’s experience is representative of a consumer’s typical or ordinary experience
The more than 700 companies who received notices of penalty offenses are not necessarily guilty of anything, the FTC says in its news release. However, it’s important to note that many of them are large companies and leading advertising agencies.
With such a high potential penalty, it’s worth taking a moment to scrutinize and clean up any reviews that raise doubts. If you receive a notice of penalty offenses from the FTC, contact your business lawyer right away.