We did a deep-dive into the "FTC Consumer Reviews" rules

Collaborators to date: Renee Girard, Tamara Hellgren, Krystal Taing, Adam Di Frisco (🆕), Tyler Einberger

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<aside><div class="post-note">Important Legal Disclaimer<br>This is a general overview for informational purposes only. It’s not legal advice. Momentic isn’t a law firm, and neither I—nor the collaborators—provide legal services. Ask your legal counsel for specific guidance on how these regulations apply to your business.</div></aside>

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Based on FTC final ruling and FTC announcements, published August 14th, 2024; as well as Morgan Lewis analysis of FTC Final Rule published August 22, 2024; additional sources as linked in the content below; and our collective experience as marketers and consumers since before the Internet.

Key Points About the FTC Ruling

• Effective date: October 21, 2024
• Penalties: Up to $50,000+ per violation
• Applies to AI-generated content too: The FTC explicitly confirms there is "no AI defense" to these regulations
• Enforcement: FTC has indicated active enforcement intentions

The Federal Trade Commission has taken a strong stance against deceptive review practices with their new Trade Regulation Rule on Consumer Reviews and Testimonials. 

Here's what we think digital marketers need to know. 

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What's Prohibited

Is your business in compliance with the new FTC review rules?

Fake or False Reviews

The rule explicitly prohibits businesses from writing, creating, selling, purchasing, or disseminating reviews that misrepresent:

• The reviewer's existence
• Whether the reviewer actually used the product or service
• The nature of the reviewer's experience

Important distinction: The FTC clarifies that "generalized review solicitations to past customers or simply hosting reviews on the business's website" are permitted.

Review Incentives

The FTC ruling is pretty clear about incentivized reviews. According to the guidance, businesses are "prohibited from providing compensation or other incentives contingent on the writing of consumer reviews expressing a particular sentiment, either positive or negative."

This covers explicit and implicit contingencies. For example, the FTC specifically states that these practices violate the rule:

• Offering $25 for a 5-star review
• Offering a gift card for a review "telling everyone how much you love our product."

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What About Review Exchange Programs?

The FTC rule doesn't specifically address "review exchanges,"—where businesses give each other positive reviews to improve ratings—but this practice likely breaks the rules:

Probably Not Truthful 

The rule requires reviews to represent genuine customer experiences. Most review exchange programs fail this test because:

• Reviewers often lack actual experience with the product or service
• The relationship between reviewers isn't disclosed
• The exchange creates an undisclosed material connection

Probably Considered Compensation

The FTC defines review compensation broadly. When you trade reviews:

• The exchange itself might constitute compensation
• The arrangement may violate provisions against compensated reviews
• The reciprocal nature creates an undisclosed material connection

Which leads to…

Material Misrepresentation 

The rule prohibits practices that deceive consumers about the nature of reviews. Based on what I know (and what I’ve seen), review exchanges often:

• Lack genuine product/service experience
• Hide the reciprocal nature of the arrangement
• Create a false impression of independent reviews 

There are thousands of talent listings on this Upwork page that disguise prohibited review practices as “Reputation Management”. How do I know this? I’ve talked with them. But these examples speak for themselves…

Let’s start with the hundreds (maybe thousands) of messages like this in our Momentic inboxes: 

These are the same words used in my conversations with talent on UpWork and Fiverr.

But here’s my fav example…

In 2023, someone fraudulently used my identity (multiple times) to build fake reviews and testimonials for businesses on Clutch. I’m not saying the businesses who got catfished paid for the UpWork reputation management, but I’m also not saying they didn’t.

It took them 3 days to send a generic response. 

High-Risk Practices to Avoid

Based on the FTC's guidance, these common review-gathering practices feel risky…

• Business-to-business review exchanges
• Review pods or groups
• "You review mine, I'll review yours" arrangements
• Review exchange platforms or networks
• Industry peer review circles

PS - 👋 Hi, LinkedIn, Twitter, etc. Engagement Groups!!! Can you please reshare this post to your network? Thanks!

Employee & Family Member Reviews

The FTC takes a firm stance on reviews from company insiders. "The rule prohibits a company's officers and managers from writing reviews or testimonials about the business or its products or services without clearly disclosing their relationship."

Who Needs to Disclose?

• Company officers and managers must disclose their relationship when reviewing
• Businesses must ensure employee testimonials include relationship disclosures
• Immediate family members (defined as spouses, parents, children, and siblings) must disclose their connection

The FTC provides important exceptions. You won't violate the provisions when:

• Running general review solicitation campaigns to past customers
• Hosting reviews on your website
• Receiving unsolicited employee reviews

Review Gating

Common industry practices aren't necessarily legal ones. Review gating is against the rules. 

I spoke to someone who’s company built review gating into their mobile app - if users tried to leave a low star rating, they were redirected to customer service instead of being able to post their review. This was implemented by their product manager, who came from a Fortune 5 company.

The point here is that you should revisit your company’s “review best practices” to make sure they align with the new rules..

If you're intercepting negative reviews before they can be posted - through customer service redirects, two-step review processes, or "feedback sorting" - that’s bad news, dude.

Review Suppression

“How do we get rid of negative reviews?” I get asked this all the time. There are companies that promise review suppression and only charge you if the review is removed. As Krystal Taing points out, even though review suppression is against FTC and Google guidelines, Google has no issue accepting ad revenue from companies bidding on review suppression keywords in Google Search. 🤣

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The FTC specifically prohibits using:

• "Unfounded or groundless legal threats"
• Physical threats
• Intimidation
• Public false accusations

What makes a legal threat "unfounded"? Good news, the FTC defines this! Threats are unfounded when they're either "unwarranted by existing law or based on allegations that have no evidentiary support."

Example of subtle review suppression

I talked with a close friend who left a critical review on Sephora's website for a hair product from Kim Kardashian's hairstylist's brand. 

Sephora took down the review, then sent them the product for free with a note saying "we're sorry you didn't like it, try it again." Sephora didn’t mention removing the review - my friend discovered that when they went back to the website, the review was gone. 

My friend isn't an influencer, “just a regular Sephora customer who spends a lot of money there”.

This act is explicitly prohibited under the new rules because it:

• Suppresses negative reviews without cause
• Uses incentives to discourage criticism
• Misrepresents the product's review sentiment

My takeaways:

1. Even though “trusted retailers” suppress reviews in sneaky ways, it’s probably against the rules because it might result in misrepresenting overall sentiment.
2. Don’t try to get rid of—or hide—reviews that are unfavorable.

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Fake Engagement on Social Media

I love this one. Why? For the same reason I LOATHE link building: because I don’t see a fair opportunity for audience-led principles on social due to fake and undisclosed influence. But now there’s a chance to clean up the noise. According to the FTC, a "fake" indicator means one that is:

• "Generated by bots"
• Created by "hijacked accounts"
• Otherwise "does not reflect a real individual's or entity's activities or opinions"

I’d love to know how you’d prove and enforce the last one…. paper trails?

Prohibition works both ways - you can neither sell nor buy fake indicators of social media influence. 

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GenAI Reviews

"There's no AI defense to the regulations on the books." This means:

• AI-generated fake reviews fall under the same prohibitions as manually-created ones
• Using AI tools to create reviews doesn't provide any special exemptions (AKA you can’t argue “it was the AI, not me!!!”)
• All rule provisions apply equally, regardless of how the content was generated

To quote the FTC directly: 

"The rule doesn't specifically refer to AI, so do these prohibitions cover situations when someone uses an AI tool to generate the deceptive content at issue? Of course, they do."

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What This Means for Your Business

Well, it means more rules, but I also see opportunities for authentically good brands. 

Here are the no-brainers…

1. Implement disclosure systems for employee and family reviews
2. Document any review removal decisions with specific justification
3. Verify the authenticity of social media engagement
4. Don’t use AI tools to generate fake reviews

The rules are designed to "go after those who employ these prohibited practices to hoodwink consumers and get an unfair leg up on their competitors." 

High five, FTC!

<div class="post-note-cute"><p>To verify the authenticity of social media engagement, you should look at the profiles engaging with your brand and see if they seem legit. Are comments thoughtful, or do they sound generic and spammy? Keep an eye out for sudden spikes in followers without corresponding bumps in engagement. Use social media analytics to spot suspicious patterns.</p><p>If you find fake or spammy engagement with your brand's social media, report the activity on the platform by flagging the profile or comment. Block fake accounts so they can't interact with your posts. Don't engage with spammy-looking comments because you'll just give them more visibility. Keep your real followers up to speed if helpful, to demonstrate your commitment to authenticity.</p></div>

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Documentation Recommendations 

The rule wouldn’t exist if the takeaway was, "please follow the rules". As someone who hates documentation, I can tell you documentation is your best friend… when you need it. It seems like a good idea to keep records of:

• How you collect reviews
• Your disclosure implementations
• Why you removed any reviews (with receipts!)
• Employee/family relationship disclosures
• Any AI tools you're using in the process

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SEO Implications

Search engines want to show people authentic reviews from real people. Google's E-E-A-T criteria emphasize trustworthiness as a key factor:

"Of these aspects, trust is most important. The others contribute to trust, but content doesn't necessarily have to demonstrate all of them."

Search engine users (PEOPLE) are sick of fake reviews and less trusting as a result. Questionable reviews decrease engagement which in turn affects visibility on SERPs—especially for local businesses and ecommerce. 

For an SEO agency, here's where the rubber meets the road.

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Google Business Profile Management 

Here are the implications for Google Business Profiles. For one, users found to be violating policies can trigger Google Business Profile suspensions. Krystal says, “Ensure everyone attached to your GBP profile as a manager or owner is complying with all Google guidelines - that could inadvertently put your business at risk.”

Getting Google Reviews

Here's what's allowed (and hopefully enforced) under the new rules:

Totally Fine:

• Sending review requests after service
• Using Google's direct review link
• Having "Review us on Google" badges

Definitely Not Fine:

• Cherry-picking happy customers
• Offering any incentives for positive reviews
• Using those sneaky review gates that filter out negative reviews

Flagging Reviews 

Yes, there are legitimate reasons to flag reviews!

This is important: The FTC isn't saying you can never remove reviews. They're saying you need legitimate reasons and documentation. 

Here's what Google considers legitimate reasons to flag a review:

• Spam/fake content (duh)
• Off-topic stuff 
• About prohibited goods/services
• Illegal content
• Explicit/offensive content
• Dangerous content
• Straight-up deceptive
• Terrorist content
• Harassment/hate speech

Off-topic could mean reviews with social/political/general commentary, or reviews that aren’t about an experience at that specific location—but good luck trying to get those removed from a competitor’s business listing (I see you, personal injury law firms!). 

Review Responses

• Know who's responding to reviews (document it!)
• Create clear disclosure templates for employee responses
• Example: "Hi [Name], I'm [Name], a customer service manager at [Business]. I'm responding on behalf of [BRAND]."

Responding to reviews on your GBP is a good thing. It’s also a good idea to have a consistent and scalable process to follow to make sure you’re following FTC rules and Google Guidelines.

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Reviews / Testimonials On Your Website

Misrepresenting customer sentiment on your website is a risk to consumer trust and brand reputation. It might also break the rules.

Want to showcase your 5-star reviews in marketing materials? That’s probably fine. But, make sure that you’re aware of and in compliance with truth-in-advertising laws.

According to Priori Legal, “Under truth-in-advertising laws, all claims made in ads and other marketing materials must be truthful, not misleading and backed by scientific evidence where possible and appropriate. This means that claims should be substantiated by research trials and surveys and generally be considered not misleading. This is especially true when a claim is based in objective facts or is in an area that would be difficult for the average consumer to assess on his or her own (such as engine performance or effectiveness against sun damage).”

§ 465.7 (p. 110-112) of the FTC ruling contains multiple sides to this argument. 

One side of the argument is that a business shouldn’t be able to post favorable reviews on its website because that may mislead people into believing those are all of the submitted reviews. 

“[b]usiness should be barred from misrepresenting reviews on their websites and from suppressing negative reviews.”

The other side of the argument is that this might discourage brands from using reviews in marketing materials. 

“A trade association’s comment requested that the Commission “carve out the use of reviews in marketing materials” because the provision “could effectively prohibit retailers from highlighting any customer reviews in advertising—even though customers understand that advertising normally highlights particularly positive reviews.” The Commission did not intend for proposed § 465.7(b) to cover the use of consumer reviews in marketing materials.”

Bottom line: Don’t mislead consumers about the overall sentiment of reviews for your brand. Don’t hide negative reviews in a dedicated review section and give the appearance that it’s a representation of all reviews. 

<div class="post-note-cute">If you're going to showcase positive reviews on your website, be transparent about it—or display all your most recent reviews, regardless of sentiment.</div>

Side note: The document does conclude that the use of selective positive reviews in marketing is a separate issue. It is unchanged, and the use of non-representative reviews in advertising could still be deceptive and violate Section 5 of the FTC Act.

Questions You Should Ask Your Review Provider

<div class="post-note-cute">Special s/o to Adam Di Frisco for this section! 🙏🔥</div>

Software providers in the reputation/review management space such as Birdeye, Podium, Yotpo, and Trustpilot have been put on the hot seat before for some “gray-area” practices. With these new regulations targeting deceptive reviews, scrutinizing and questioning the practices of any third-party review management company you’re working with is a must. Not all providers and services operate equally in terms of compliance and transparency, and with the FTC tightening rules, even seemingly minor oversights can carry significant consequences for your business. As Birdeye says in their reaction to the new rules;

“While we’re here to support you, we can’t ensure you’re using our tools correctly or provide legal advice. As the controller of our tools, you’re ultimately responsible for ensuring compliance and understanding the consequences of non-compliance. Therefore, we encourage you to familiarize yourself with these regulations and make informed decisions..”

Here are some questions you should be asking your software company to make sure you are controlling the tools in a responsible way:

How Does Your Platform Detect Fake Reviews (positive or negative)?

Some providers, like Trustpilot, use advanced fraud detection technology to monitor patterns, which has resulted in the removal of millions of fake reviews. Look for platforms that demonstrate a commitment to keeping reviews genuine and enforce measures against suspicious activity.

What Is Your Stance on Incentivizing Reviews?

Ensure that whatever software you are working with isn’t directly or indirectly incentivizing reviews on your behalf. This will largely be out of the scope of this software, but you even have to be careful when listening to the advice given by these platforms. Yotpo, for example, recommends offering loyalty points, coupons, or features on social media, which you certainly shouldn’t be doing. 

Can You Control Which Reviews Are Displayed?

Review providers, such as Birdeye, allow businesses to choose to display only positive reviews on their sites, but this approach has serious compliance risks. It’s important to ask how your provider’s settings function and to fully understand the implications of filtering reviews in light of the FTC’s stance on transparency.

What Protections Are in Place for Negative Reviews?

The FTC now prohibits using intimidation, false legal threats, or similar tactics to suppress negative feedback. Ask your provider if they have protocols to prevent or report abusive flagging or review manipulation. A reputable provider should help you manage reviews fairly and uphold customer trust.

What Steps Are Taken Against AI-Generated Reviews?

Most of these tools use AI to some degree, but most are only for responding to reviews and not posting. As with other uses of AI, make sure that if you are using AI to respond to reviews, you are manually reviewing them, keeping in mind that AI-generated reviews and responses fall under the same prohibitions as manually-created ones.

The main takeaway here is that it is up to you how you use these tools. Not all of their capabilities will be compliant with the FTC ruling.  Understanding how your review provider operates under these new rules will help you stay compliant, protect your reputation, and keep you out of trouble.

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Keep Your Review Management Workflow Simple

Here’s where to start if you’re at zero today.

Getting Reviews

Customer interaction → Wait a day or two → Send review request → Document when you asked

Responding to Reviews

New review drops → Log it → Verify they're a customer → Respond within 48 hours → Include "material connection" disclosure if needed

Problem Reviews

Spot a problematic review → Document what's wrong → Screenshot it → Submit removal request → Track what happens

Track Everything 

Do you love spreadsheets? (I do, lol) Here’s what you should probably track:

• When the review came in
• Who left it
• Star rating
• What they said
• When you responded
• Who responded
• If you requested removal (and why)
• What happened
• Any follow-up needed

If you subscribe to a platform that helps you manage your online business listings, it might include tools and documentation for review management.

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How to NOT Mess This Up

After working with reviews for years, here are best practices I've learned to make the difference between good and great review management:

Timing Matters

• Get to those reviews within 48 hours
• Jump on negative reviews first (they're not getting better with age)
• Document why if you're late responding

Respond Well

• Use real names
• Include your role
• Read and respond to what they said
• Keep it professional
• Read it out loud before submitting

Stay On Top of Things

• Check reviews daily
• Watch for anomalies or strange patterns
• Track your review velocity
• Keep an eye on competitor reviews (you know you're gonna anyway)

Team Comms

• Share review insights weekly
• Document issues that come up
• Track how you fixed those issues

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FAQs

What is the purpose of the FTC's new rule on reviews and testimonials?

The goal is to protect consumers from deceptive practices related to consumer reviews and testimonials. It prohibits businesses from using fake reviews, suppressing negative reviews, and misrepresenting endorsements. This ensures consumers have access to honest and unbiased information when making purchasing decisions.

Does the rule cover both consumer reviews and celebrity testimonials?

Yes. It prohibits businesses from using fake or misleading reviews and testimonials from both regular consumers and well-known individuals.

What are some examples of fake reviews that are prohibited by the rule?

The rule prohibits several types of fake reviews, including:

• Reviews written by individuals who don't exist
• Reviews from individuals who haven't actually used the product or service
• Reviews that misrepresent the reviewer's experience with the product or service
• Reviews written by employees or their relatives without clear and conspicuous disclosure of their connection to the business

Does the rule prohibit businesses from asking their customers to leave reviews?

No. However, businesses can’t offer incentives for positive reviews or discourage negative reviews. 

What are “fake indicators of social media influence,” and how are they addressed by the rule?

"Fake indicators of social media influence" refer to metrics such as followers, likes, and comments that are artificially inflated to make an individual or business appear more influential than they actually are. The rule prohibits businesses from buying or selling these fake indicators to misrepresent their social media influence for commercial purposes.

Can businesses remove negative reviews from their websites or social media pages?

Businesses can remove reviews that violate their platform's terms of service, such as reviews containing offensive language or personal information. However, they cannot suppress negative reviews simply because they are unfavorable. The rule also specifically prohibits businesses from misrepresenting that the reviews they display represent all of the reviews they’ve received.

Are there any exceptions to the rule's prohibitions on review suppression?

Yes, there are limited exceptions. Businesses can suppress reviews that:

• Contain confidential information
• Are defamatory, harassing, or abusive
• Violate intellectual property rights

However, the criteria for suppressing reviews must be applied consistently to all reviews, regardless of their sentiment.

What are the penalties for violating the rule?

Businesses that violate the rule may face civil penalties. Additionally, the FTC can seek redress for consumers who have been harmed by deceptive review and testimonial practices. Based on my initial research, the FTC does actively pursues and enforces advertising and marketing rules.

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The Bottom Line

"No honest business should be worried about the rule, as it only reflects what we believe is already illegal under Section 5 of the FTC Act." 

<div class="post-note-cute"><p>Need Help Getting This Right?</p><p>It’s a lot to handle. If you need help, hit up your legal counsel, then if you need implementation help, send us an email at info@momenticmarketing.com. We'll either be able to help or point you in the right direction.</p></div>

<aside><div class="post-note">Article update history:<br><ul><li>2024-11-04 (current version): Added collaborator, Adam Di Frisco, who contributed a new section, Questions You Should Ask Your Review Provider. Added call for contributors at the bottom of the article.</li><li>2024-10-30: Added more details to "Reviews / Testimonials on Your Website" section, plus added collaborative notes from Krystal Taing</li><li>2024-10-28: Original version</li></ul></div></aside>

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<div class="post-note-cute"><p>Want to contribute to this guide?</p><p>Over 250 people have read this article as of November 4, 2024. Most of them have come from LinkedIn. If you'd like to contribute, send me a message on LinkedIn (Tyler Einberger) with what you think should be added and why you're qualified to add to this guide.</p></div>