A warning letter (or ten) for businesses: comply with the FTC’s Consumer Review Rule

Consumers often rely on reviews to help them choose between everything from home repair companies to apartments to lawyers. When those reviews reflect honest feedback from real people who have actually used a product or service, the feedback can be invaluable. Reviews can also encourage people to take a chance on an unknown company or product.

When companies try to game the review system — by using fake reviews or providing money or incentives for only positive reviews — they distort the marketplace and harm consumers relying on reviews to make purchasing decisions. They also hurt honest competitors who work hard to comply with the law. That’s why today the FTC sent warning letters to alert a number of companies of potential violations of the Rule on the Use of Consumer Reviews and Testimonials (Consumer Review Rule).

These letters confirm that companies using fake reviews or providing incentives for 5-star reviews misrepresent consumer experiences and opinions — and may be subject to FTC enforcement actions and civil penalties. (Civil penalties that, at up to $53,088 per violation, can quickly add up.)

To protect your business’s reputation and bottom line, review the Consumer Review Rule thoroughly and, if necessary, revise your practices to ensure you’re complying with the Rule’s requirements.

And if you see a business violating the Consumer Review Rule, tell the FTC: ReportFraud.ftc.gov.