The FTC’s ban on fake online reviews is now in effect: These 5 sketchy practices are officially considered fraud
Lina Khan, chair of the Federal Trade Commission (FTC), announced on Monday that a new ban on fake online reviews and testimonials has now gone into effect. The rules are aimed at protecting consumers from unscrupulous reviews, which could misleadingly influence their decision to purchase a product. In an August press release announcing the finalization of the rules, Khan said, “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors. By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.” These are some of the most prominent scenarios that are now forbidden under the new rule: Businesses can’t buy reviews: Businesses are now forbidden from buying reviews, either via monetary compensation or other incentives. This includes both positive and negative reviews. Businesses can’t misuse social media indicators: Businesses can no longer try to game social media to promote their products by buying followers or inflating views by using bots or hijacked accounts. Business-owned websites can’t misrepresent their reviews: Businesses now also can’t misrepresent that the reviews for their products on one of their websites are independent when the website is, in fact, owned by the business. Negative review suppression is a no-no: Businesses can no longer use groundless legal threats to get a person to remove or not post a negative review of the business’s product. No AI testimonials: A business cannot use an AI-generated persona to give a testimonial for its products. Of course, just because the new rules are in place doesn’t mean unscrupulous businesses won’t still try to use some of these tactics, but at the very least, they give businesses firm guidelines about what is and isn’t permissible in today’s online economy. In a post on X Monday, Khan encouraged anyone who came across these practices to report them via the FTC’s fraud page. The full rule, officially known as 16 CFR Part 465: Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, can be found here.
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Lina Khan, chair of the Federal Trade Commission (FTC), announced on Monday that a new ban on fake online reviews and testimonials has now gone into effect. The rules are aimed at protecting consumers from unscrupulous reviews, which could misleadingly influence their decision to purchase a product.
In an August press release announcing the finalization of the rules, Khan said, “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors. By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”
These are some of the most prominent scenarios that are now forbidden under the new rule:
- Businesses can’t buy reviews: Businesses are now forbidden from buying reviews, either via monetary compensation or other incentives. This includes both positive and negative reviews.
- Businesses can’t misuse social media indicators: Businesses can no longer try to game social media to promote their products by buying followers or inflating views by using bots or hijacked accounts.
- Business-owned websites can’t misrepresent their reviews: Businesses now also can’t misrepresent that the reviews for their products on one of their websites are independent when the website is, in fact, owned by the business.
- Negative review suppression is a no-no: Businesses can no longer use groundless legal threats to get a person to remove or not post a negative review of the business’s product.
- No AI testimonials: A business cannot use an AI-generated persona to give a testimonial for its products.
Of course, just because the new rules are in place doesn’t mean unscrupulous businesses won’t still try to use some of these tactics, but at the very least, they give businesses firm guidelines about what is and isn’t permissible in today’s online economy.
In a post on X Monday, Khan encouraged anyone who came across these practices to report them via the FTC’s fraud page.
The full rule, officially known as 16 CFR Part 465: Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, can be found here.
