Overview:
The Federal Trade Commission issues a final rule banning fake reviews and testimonials. How might consumer surveys be used as evidence in a dispute?
Final Rule on Fake
When shopping in person, we might have sales representatives or friends make recommendations. But when shopping online, one of the most persuasive ways we can learn more about a product is reading online testimonials and reviews. According to online marketing company TrustPulse, 99.9% of customers read reviews when they shop online, 96% look for negative reviews, and 49% trust online reviews as they would recommendations from friends or family.
This creates a demand for reviews–which has created a market for fake reviews and testimonials. With that in mind, the Federal Trade Commission has created a new rule that prohibits the sale and trade of fake testimonials, and allows the agency to seek civil penalties against violators. The FTC noted that it would be enforcing the rule on a case-by-case basis.
What Does the Rule Expressly Prohibit?
Even marketers who are not actively buying fake reviews may be affected, because the rule also affects how companies solicit positive reviews and handle negative reviews. The FTC’s final rule prohibits:
- Fake/False Consumer Reviews, Customer Testimonials, and Celebrity Testimonials: This prohibits reviews and testimonials attributed to someone who does not exist, someone who did not have any experience with the company or its products or services, or someone who misrepresents their real experiences. Companies may not buy fake reviews, disseminate them, or procure them from company insiders.
- Buying Positive/Negative Reviews: Businesses may not buy reviews on the condition that the review is slanted in certain ways, including providing non-monetary incentives as well as money. This also applies to situations where the offer of compensation in exchange for reviews is implied rather than expressly stated.
- Insider Reviews and Consumer Testimonials: This prohibits testimonials or reviews made by insiders who do not disclose their relationships to the business being reviewed. Managers and officers may not review their own businesses or solicit reviews from immediate relatives, employees, or agents.
- Company-Controlled Review Websites: If a business controls a review website, it must not represent reviews of its own products or services on that website as independent.
- Review Suppression: Businesses are prohibited from using threats, physical intimidation, or public accusations to prevent or remove a negative review. The rule also prohibits businesses from misrepresenting a group of reviews as all or most reviews when the business has removed or suppressed reviews based on the sentiments in them.
- Fake Social Media: The rule prohibits anyone from buying and selling fake indicators of social media status, including false views or followers from bots or hijacked accounts. The FTC will enforce this against only those who were aware that the accounts were fraudulent or producing fake reviews.
Procuring favorable reviews and testimonials is one of the most common tactics for achieving positive online sentiment and building trust. Without the fake review marketplace and incentivized reviews from friends and family, what are other ways for marketers and advertisers to increase consumer interest?
Market Research, Claim Substantiation, and Authentic Consumer Trust
One answer is investing in properly conducted market research, and building compelling advertising and digital marketing campaigns based on the findings from that research. Testimonials and reviews are easily found on third-party sites, social media platforms, and company websites. Sponsored market research information can be disseminated through social media platforms or peer-reviewed publications, and also featured on websites, in advertising, and in other communication channels.
MMR Strategy Group designs and conducts reliable market research and advertising claim substantiation. If you’re looking to increase consumer trust or to leverage market knowledge in 2025, contact us to learn more about how MMR Strategy Group can help.