On August 14, 2024, the Federal Trade Commission (FTC) banned fake consumer reviews and testimonials, launching a significant new effort to address deceptive online marketing practices.
The FTC had previously discouraged such practices, but the new rule now strengthens FTC enforcement and prohibits businesses from:
- Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials: Creating, buying, selling, disseminating, or encouraging fake reviews — including AI-generated reviews.
- Insider Reviews and Consumer Testimonials: Not disclosing reviews by business insiders — such as employees, managers, or agents.
- Company-Controlled Review Websites: Misrepresenting that a site it owns or controls offers independent reviews or opinions.
- Review Suppression: Suppressing negative reviews or using threats or intimidation to remove such reviews.
- Buying Positive or Negative Reviews: Offering incentives or payment for sentiment-specific reviews, such as positive reviews only.
- Misuse of Fake Social Media Indicators: Selling or buying fake social media influence, such as bot-generated followers or views.
With the new rule in place, local businesses will need to take strong measures to ensure that all customer reviews are genuine and properly disclosed, and to shore up other review practices and policies. If a business violates the new FTC rule by engaging in fake review practices, it could face civil penalties and other legal consequences, potentially impacting its finances and reputation.
Read on for a summary of the rule’s implications and how the rule impacts your local business’s review strategy. We’ll also outline the steps you can take now to ensure compliance and tighten up your review practices.
What the new FTC rule emphasizes
1. Authenticity, trust, and transparency
Since many local businesses rely heavily on their online reputation to attract customers, this rule emphasizes the importance of maintaining a trustworthy, transparent online presence. Fake reviews not only harm your business reputation, they’re now a financial and legal liability.
More than ever, you need to ensure all reviews and testimonials you receive come from genuine, verified customers. Don’t attempt to fabricate reviews or purchase fake reviews — including AI-generated reviews. You must also ensure you don’t incentivize customers to leave only favorable reviews.
At the same time, you can’t suppress negative reviews or falsely indicate that the positive reviews on your website, for example, represent all reviews if you have actively suppressed or removed negative reviews or ratings.
2. Disclosure of insider reviews
Fake reviews aren’t the only ones to avoid. Reviews from biased sources can also be misleading.
This must be disclosed if an employee or anyone with a vested interest in your business leaves a review. Not disclosing it is misleading to customers and could be considered a violation of the FTC rule.
3. FTC enforcement
Since the FTC can now seek civil penalties under this rule, you must be extra careful when monitoring and managing your online reviews, as just a single infraction could be costly.
Steps to avoid fake reviews and other review issues
While the new FTC rule may feel daunting, you can take actions to help ensure you’re in compliance — even if your review practices haven’t been as buttoned up as they should be.
It can be especially challenging for small businesses with limited staff and resources to stay on top of customer reviews and know at all times what’s being said, who’s saying it, and where. Even if you use a reputation management platform to monitor reviews and automate some of your processes, the volume and velocity of reviews can still feel overwhelming when you factor in all your other business responsibilities.
However, taking the proper steps now to clean up your house, so to speak, will help you move forward with confidence, knowing that your review strategy is built on transparency and solid legal ground.
Here’s what you can do:
1. Audit your existing reviews
If you use a reputation management platform, do a thorough audit of all your existing reviews to identify any fake reviews or potentially misleading reviews, and then promptly remove the ones that don’t meet the FTC’s standards. Even if you previously solicited fake reviews, the important point is that you remove them now.
Remember: this does NOT mean removing negative reviews or reviews you don’t like — since this can also violate the FTC rule. Only remove a negative review if it’s clear that the review is fake — e.g., potentially written by someone trying to smear your business who isn’t a customer at all — or that it’s an AI-generated review.
2. Educate employees
Ensure your employees understand how harmful fake reviews are to your business reputation and stress the importance of review and testimonial transparency. If you handle review management in-house, educate employees specifically in charge of review-related tasks on the new FTC rule.
Also, make it clear that if any employee is tempted to leave a review about your business, products, or services, they must properly disclose their connection with the business. You may even discourage or prohibit this practice altogether to minimize the risk that someone may fail to disclose properly.
3. Update your review policies
On that note, it’s also a good time to update your review policies. Ensure your review policies clearly outline to customers the acceptable legal practices for leaving and publicizing reviews that your business follows. Clearly state that fake reviews and AI-generated reviews will not be tolerated and how such reviews will be handled if they are discovered.
If you offer incentives for reviews, explain under what circumstances you may do so and make sure that these incentives do not violate the FTC rule — meaning that you do not pay for, reward, or otherwise encourage customers to leave only favorable reviews.
4. Monitor regularly
Staying compliant with a new regulation requires vigilance and monitoring. Set up alerts whenever you receive a new review. Also, implement regular check-ins of your review systems and processes to ensure that no fake reviews are slipping through and that nothing else about the rule is being overlooked or violated.
Then, stay alert to any future changes to the FTC’s rules or general guidelines for consumer reviews and online marketing practices. Your business will be better for it since the relationships you grow and maintain with your customers will be earned and built on trust.
What a legitimate review strategy looks like
If you’re new to review management or know that you need to overhaul your current review strategy in light of the new rule, here’s what a legitimate strategy can look like:
1. Ask customers for honest reviews and feedback
It’s easy to ask satisfied customers for reviews since you know they will likely be positive. But the goal is to get honest feedback — so when you request reviews, say it just like that. You don’t need fake or AI-generated reviews to create a false image of your business.
Since review volume matters to ratings, implement a review generation process that enables you to continually send out review requests. That way, you can generate new, legitimate reviews and build up a body of quality reviews over time, which will help increase your ratings, too.
2. Flag fake reviews right away
There are multiple ways to help you identify fake reviews — including review content that provides no real details, words or phrases that seem off, a user image that’s a stock photo, etc.
If you suspect you’re getting fake or malicious reviews, don’t wait to address the problem. Contact the platform and follow its guidelines for reporting and removal. For example, Google will remove reviews from Google Business Profiles if they fall within the platform’s restricted or prohibited content.
3. Respond to all reviews
Customers want to know they’re being heard. No matter what type of review you get — positive, negative, or neutral — respond to each one. This shows customers you’re paying attention, care about their experiences, and are willing to address issues.
Review responses have the bonus of inspiring more reviews. When other people see you engaging with customer reviews, they want to be part of it too — and could be moved to leave their own reviews.
4. Focus on the customer experience
Real reviews do what fake reviews can’t: they help you make your business as good as possible. If you’re doing a great job, your reviews will reflect it. If there are things you need to fix or change, your reviews will reveal this.
Use the feedback to determine how you can improve the customer experience. Your reviews will naturally and authentically veer to the positive side, which will help you attract and convert more customers.
Prioritize what’s genuine and follow the rules
The new FTC rule is a reminder that trust and transparency are critical in today’s digital marketplace and that fake reviews have no place there.
When you prioritize genuine customer feedback and FTC compliance for your local business, you can minimize financial, legal, and reputational risks and know that you’re acquiring new customers based on your business’s actual merits—not manipulation and fabrication.
To learn more about GatherUp’s reputation management platform and review tools, sign up for a free trial today.
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