FTC Bans Fake Reviews: What You Should Know

FTC Bans Fake Reviews: What You Should Know

The Federal Trade Commission (FTC) has introduced a new rule to stop fake reviews and make sure businesses are honest in how they gather and present customer feedback.

Key Points of the New Rule

The new rule focuses on five main areas:

• No Fake Reviews: Businesses can’t create, buy, or share false reviews, including those generated by AI.
• No Bribes for Positive Reviews: Companies are not allowed to pay or reward people to leave good reviews.
• Honesty About Connections: If you work for a business or have ties to it, you need to say so when writing a review.
• No Bullying Over Bad Reviews: Businesses cannot threaten consumers to erase negative reviews.
• No Fake Popularity: Buying or selling fake likes, followers, or views on social media is not allowed.

As FTC Chair Lina M. Khan mentioned, fake reviews waste time and money and unfairly hurt honest businesses.

How the Rule Was Created

The FTC took several steps to create this rule:

1. In November 2022, they started considering a new rule.
2. By June 2023, they shared a draft of the rule.
3. In February 2024, they held a public meeting to discuss the rule.
4. They listened to input and made improvements before approving the rule.

All five FTC commissioners approved the final version.

What This Means for Businesses

With this new rule, businesses need to be more careful about how they handle reviews. Here’s something to keep in mind:

• Companies must avoid using fake AI reviews.
• Those promoting products online must clearly state any connections to the companies.
• Businesses can’t pressure customers into taking down negative reviews.

If a company breaks these rules, the FTC can issue fines. To avoid penalties, businesses might need to:

• Review how they collect and manage reviews.
• Set clear guidelines for employees and influencers.
• Focus on improving customer experiences to naturally get positive feedback.
• Create fair strategies for dealing with negative reviews.

What’s Next?

The new FTC rule is set to take effect 60 days after it’s officially published. This means it will be active in about two months, giving businesses time to adjust their practices and make sure they’re following the new guidelines.