Many successful independent agencies rely on their online presence, including online reviews, to attract new customers. Recently, the Federal Trade Commission (FTC) provided guidance to businesses seeking to benefit from glowing online reviews while remaining compliant with the law.
In a recent case, In the Matter of AmeriFreight, Inc., the FTC alleged that AmeriFreight represented to consumers that its online reviews were trustworthy, unbiased and voluntary, claiming it has “more highly ranked ratings and reviews than any other company in the automobile transportation business.” But according to the FTC, AmeriFreight did not properly disclose to consumers that customers who provided online reviews received a $50 discount to provide the reviews and customers who declined to provide online reviews were charged an additional $50.
The FTC also alleged that AmeriFreight failed to properly disclose to consumers that it enticed customers with an additional $100 discount for the “Best Monthly Review Award,” which it based on the most “creative ‘Subject Title’” and “informative content.” According to the FTC, AmeriFreight never directed customers to disclose the incentives and most customer reviews did not disclose the incentives.
AmeriFreight and its owner entered a consent order that prohibits misrepresentation of AmeriFreight’s customer ratings and reviews as unbiased. The consenting parties must also meet various document retention requirements and clearly and prominently disclose any material connection between them and their endorsers. The consent order will remain in place for 20 years.
The AmeriFreight matter shows strong online reviews are best when earned, not encouraged through incentives. If any connection exists between the reviewer and the reviewed agency, the consumer is entitled to know that connection—whether it’s a discount, a reviewer’s employment with the agency or receipt of a free gift. The agency should request that the reviewer disclose the connection in the review and if the reviewer does not do so, the agency must clearly and prominently disclose the connection.
Questions about this topic? Contact the Big “I” Office of General Counsel.