The FTC’s $52K Warning: A Guide to Ethical Consumer Reviews

by Dec 10, 2024Digital Marketing, Ethics in business and marketing

Before the Nitty-Gritty

As self-proclaimed rule-breakers, even we know there is a time and place to follow the rules (especially when not following the rules can result in significant fines for your business). In late October 2024, The Federal Trade Commission (FTC) unveiled its new rules regarding online consumer reviews and social media engagement to promote transparency through honest consumer feedback.

Before the nitty-gritty, here’s the rundown of these new rules:

  • No Fake Reviews
  • No Bribes or Gifts for Good Reviews
  • Honesty About Connections
  • No Bullying to Remove Bad Reviews
  • No Fake Clout (They didn’t put it like that, but we will. We’re going into 2025–stop buying followers, people.)

As you continue to market your business online, it’s more than important that you stay up to date with these kinds of regulations (it’s also a good reason to have a marketing partner on speed dial, just saying).

Let’s take a look at the specifics of the new regulations together and discuss how they can positively impact your reputation and business growth.

No Fake Reviews

One of the most critical rules established by the FTC is the prohibition of fake consumer reviews. This means that creating, purchasing, or encouraging the posting of false reviews is strictly forbidden.

Fake reviews are simply unfair to everyone who encounters them. If your Google reviews are praising promises you can’t keep, they don’t belong on your profile. If customers discover that a business has been dishonest (and if you aren’t practicing what you preach, this will take no time), they are highly likely to take their business elsewhere.

Additionally, the consequences of disobeying these guidelines aren’t worth the risk! “How much would a fake review really cost me?” you may be asking. Violations can lead to hefty fines up to nearly $52,000 per infraction.

How to Comply: Social proof significantly influences purchasing decisions, thus authenticity is key. By prioritizing real consumer reviews, you not only comply with FTC regulations but also foster a positive image that resonates with your audience, leading to long-term success.

No Bribes for Good Reviews

Under the new FTC regulations, offering bribes for positive reviews is strictly prohibited. You might be thinking “I’d never bribe people.” If you offer a free product or a discount for a GOOD review, that is considered a bribe in the eyes of the FTC.

The best route for businesses is to simply focus on creating a great customer experience that naturally encourages positive feedback. Ask customers for their opinions regularly, and make it easy for them to leave honest reviews.

How to Comply: It is still okay to offer a discount code or other incentives for a Google review or Facebook review, but there are no strings attached! Whether it’s good, bad, or somewhere in between is up to the reviewer.

Honesty About Connections

If someone is connected to your business—whether they are an employee, a family member, or a close friend—their reviews should clearly indicate that relationship. Failure to disclose these connections can lead to skepticism from potential customers.

Imagine customers find out that half of your glowing reviews were written by your managers, staff, grandma, cousin Bob, and CFO with no disclosure provided; it could weaken trust in both your reviews and the integrity of your brand. Your real customers need to speak about your business for true credibility.

How to Comply: Encourage your team to be upfront about their affiliations when leaving reviews. It’s also advisable to create a policy that outlines how to handle reviews from employees or connected individuals. Continue to encourage reviews from your customers on a regular basis!

No Bullying to Remove Bad Consumer Reviews

This should go without saying, but bullying is bad. Bullying your customers is even worse. Instead of trying to silence critics, it’s more beneficial to respond thoughtfully and constructively to their feedback.

Publicly addressing complaints shows prospective customers that you are willing to engage with all forms of feedback and that you value customer satisfaction.

How to Comply: Look at each piece of feedback as a chance to understand what your business can improve. By responding to negative reviews transparently and professionally, you build trust with your audience and demonstrate commitment to customer service.

Side Note: Never use tactics like offering compensation in exchange for review removal. This breaches the FTC guidelines and can cause greater harm to your reputation if uncovered.

No Fake Popularity

Buying followers, likes, or views is a major no-no. While it might be tempting to boost your social media presence quickly, using fake accounts or bots to inflate your numbers will never help you in the long run.

After nearly a decade in social media management, we’ve seen the ebb and flow of buying followers and views from businesses, especially influencers. It almost always results in lowering your natural engagement and can lead to having your account banned. (Plus, a lot of people understand engagement metrics these days. If you think buying engagement isn’t noticeable, here’s your reassurance it absolutely is.)

How to Comply: Genuine social media engagement is built over time through authentic content that resonates with your audience. Focus on creating content your audience wants to see, engaging with your community thoughtfully, and participating in meaningful conversations.

The Long & Short Of it

Look, out of everyone, we get it. Building a solid online presence and reputation takes time, effort, and a whole lot of patience. It’s tempting to take shortcuts, especially when you’re just starting out or trying to keep up with the competition. But trust us, playing by the rules is the way to go.

These new FTC regulations aren’t just about avoiding fines (though $52K per review violation is nothing to sneeze at). They’re about fostering a more honest, transparent online environment where businesses and consumers can connect authentically. And isn’t that what we all want in the end?

So, as we head into 2025, let’s make a pact to keep it real. No more fake consumer reviews, no more bought followers, and definitely no more bribing Aunt Sally for a five-star rating. Instead, focus on what really matters: providing kick-ass products or services, treating your customers like gold, and letting your authentic self shine.

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