Beware online merchants who see no problem publishing fake reviews from made-up customers: The practice is no longer allowed. The federal ban on fake online reviews has gone into effect.
The Federal Trade Commission issued a final rule on the buying and selling of online reviews in August and it went into effect 60 days after it was published in the Federal Register. The agency’s commissioners voted unanimously in favor of the regulation.
The rule prohibits businesses from creating, buying or selling reviews and testimonials in the names of people who don’t exist, including those generated by AI. False celebrity endorsements are not allowed and companies cannot pay or otherwise encourage real customers to leave positive or negative reviews.
Certain reviews and testimonials written by people with a close relationship with the company without a disclaimer are barred. There are also restrictions on soliciting reviews from close relatives of employees.
The rule includes limitations on suppressing negative reviews from customers. It also prohibits people from intentionally selling or buying fake followers and views to inflate the influence or importance of a social media account for business purposes.
The penalties for violating these measures can prove very costly. The maximum civil penalty for each violation is currently $51,744.
“Fake reviews not only waste people’s time and money, but pollute the marketplace and drive business away from honest competitors,” FTC Chairwoman Lina Khan said when the rule was finalized. “By strengthening the FTC’s toolkit for fighting deceptive advertising, the final rule will protect Americans from being deceived, put on notice businesses that game the system illegally, and promote fair, honest, and competitive marketplaces.”
This rule is a positive step for consumers, with the idea that reviews should be more trustworthy in the future. In a separate victory for consumer rights, the FTC recently issued a final rule making it as easy for people to cancel a subscription as it was to sign up.