FTC to Fine Businesses $51,744 for Fake Reviews

On October 21, 2024, the Federal Trade Commission (FTC) implemented a rule targeting fake reviews and testimonials, prohibiting their buying or selling and imposing fines of $51,744 per violation on knowing violators. The rule aims to prevent deceptive advertising and strengthen fair competition by holding businesses accountable for misleading practices. FTC Chair Lina M. Khan emphasized that fake reviews harm consumers and honest competitors by distorting the marketplace.

The rule bans false consumer reviews, insider testimonials without disclosure, conditional incentives for specific review sentiments, and company-controlled sites posing as independent reviewers. It also prohibits using threats to suppress negative reviews and misrepresenting filtered reviews as unbiased. Additionally, buying or selling fake social media followers is now penalized when it’s intended to misrepresent a business’s influence.

I often get asked from client’s if I can offer them fake reviews and I always tell them that it is unethical and instead they should try to improve their business to get less negative reviews and to ask their happy clients to give them reviews. This new rule will hopefully discourage businesses from using fake reviews and encourage a focus on genuine customer experience improvements. I am also pretty sure less business will be interested in doing fake reviews now that these rules are in place.

Read more details about this new rule at my Company blog:

FTC to Fine Businesses over $50K For Fake Reviews