FTC Bans Fake Reviews

The Federal Trade Commission (FTC) approved a ban on fake reviews and testimonials, including ones generated by artificial intelligence (AI). The final rule will enhance the FTC’s ability to seek civil penalties against violators.

“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,” said FTC Chair Lina M. Khan.

The new rule prohibits:

Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials

Businesses are not allowed to use reviews or testimonials not written by an actual person. This includes AI-generated reviews. Reviews from someone who did not use the business’s products or services and reviews that misrepresent the author’s experience are also banned.

Buying Positive or Negative Reviews

Businesses are prohibited from providing compensation or other incentives for writing consumer reviews that are either positive or negative. The conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed.

Insider Reviews and Consumer Testimonials

Reviews and testimonials written by company insiders that fail to clearly and conspicuously disclose the author’s connection to the business are prohibited. The rule also restricts soliciting reviews from relatives and employees or agents.

Review Suppression

Using groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove a negative consumer review is prohibited. Businesses also cannot misrepresent that the reviews on their website represent all or most of the reviews when negative reviews have been suppressed.

Misuse of Fake Social Media Indicators

The final rule prohibits anyone from selling or buying fake indicators of social media influence, such as followers or views generated by a bot or hijacked account. This only applies when the buyer knew or should have known that the indicators were fake and misrepresented the buyer’s influence or importance for a commercial purpose.

The rule will become effective 60 days after it’s published in the Federal Register, which will likely put the effective date in mid-October 2024.

CompliancePoint has an experienced team dedicated to helping our customers effectively market their goods and services in compliance with federal and state outreach regulations, including the TCPA, TSR, do-not-call rules, and more. Reach out to us at connect@compliancepoint.com to learn more about our services.