What You Need to Know About the FTC’s New Rule on Reviews and Testimonials
The FTC has rolled out a new rule targeting misleading practices in consumer reviews and testimonials, especially for affiliate and influencer marketing. This rule is all about making things more transparent and protecting consumers from fake or deceptive content.
What’s the Rule About?
The rule cracks down on businesses that create or buy fake reviews or testimonials. It also covers situations where reviews are incentivized but require the reviewer to leave a specific positive (or negative) comment without letting the audience know that they were compensated.
Transparency is Key
One of the big takeaways here is the importance of clear disclosures. If an employee, owner, or even an immediate family member leaves a review or testimonial, they have to disclose their connection to the business. And it’s not enough to bury this info — it has to be obvious and easy for consumers to understand.
What Happens if You Don’t Follow the Rule?
The penalties can get steep. The FTC can issue fines up to $51,000 per violation, and that can stack up quickly. They can also take legal action to get money back for consumers who’ve been harmed by deceptive practices.
What About Incentivized Reviews?
You can still offer incentives for reviews, but there’s a catch: you can’t require the review to be positive or negative. And, of course, you have to be upfront about offering the incentive. Also, if your employees or close family members are leaving reviews, those connections must be disclosed.
Are Platforms and Middlemen Affected?
If a platform just facilitates transactions between brands and creators, they’re usually in the clear. But if they get involved in suppressing negative reviews or other shady practices, they could still face trouble under the FTC Act.
In short, the FTC’s new rule is all about honesty and transparency. Businesses should take note and make sure they’re following these guidelines, or they could face some hefty penalties. It’s also a great way to build consumer trust by being upfront and avoiding any deceptive practices.
Need help keeping your influencer marketing program FTC compliant? We can help! Reach out to us at brands@influencelogic.com for more information.
