On December 22, 2025, the Federal Trade Commission (FTC) issued letters to ten (10) companies, warning of potential violations of its “Consumer Review Rule,” 16 C.F.R. § 465, which took effect on October 21, 2024. The FTC’s recent enforcement action demonstrates its continued effort to combat deceptive and unfair customer reviews and testimonials.
KingSpry’s Business Law and Employment Law Attorney, Taisha K. Tolliver-Duran, Esq., reviews the Consumer Review Rule and offers compliance recommendations for employers to avoid facing civil penalties.
Overview of the Rule
On October 14, 2024, the FTC’s Consumer Review Rule (the “Rule”) took effect, which prohibits businesses from engaging in certain review-related conduct. The Rule broadly defines “business” to include “an individual who sells products or services, a partnership that sells products or services, a corporation that sells products or services, or any other commercial entity that sells products or services.” Per the FTC’s warning letter, noncompliance with the Rule may result in the filing of a federal lawsuit and the imposition of civil penalties up to $53,088 per violation against businesses.
Reviews & Testimonials
Under the Rule, businesses cannot write, create, sell, purchase, or disseminate a consumer review, consumer testimonial, or celebrity testimonial that materially misrepresents (1) that the reviewer or “testimonialist” exists, (2) that the reviewer or testimonialist used or otherwise experienced the product, service, or business, or (3) the reviewer’s or testimonialist’s experience with the product, service, or business. Businesses are also prohibited from procuring such reviews or testimonials from their officers, managers, employees, or agents, or any of their immediate relatives.
Purchasing Reviews
Businesses cannot provide compensation or other incentives in exchange for consumer reviews of a particular sentiment, whether positive or negative. In its warning letter, the FTC provided that this includes giving gift cards or discounts for 5-star reviews only.
Insider Reviews
Reviews or testimonials created by an officer or manager of a business must have a clear and conspicuous disclosure of the reviewer’s relationship to the business. “Clear and conspicuous” means the disclosure is “easily noticeable” and “easily understandable by ordinary consumers.” The Rule also places certain restrictions on the solicitation of consumer reviews from an officer or manager’s immediate relatives or employees.
Company-Controlled Websites
Businesses cannot misrepresent that a website it controls provides “independent” reviews or opinions about its products or services. In its warning letter, the FTC provided that a website claiming to rate or rank a type of product must clearly and conspicuously disclose if the site is controlled by a manufacturer or seller of the product.
Review Suppression
Businesses cannot use threats to prevent or remove negative consumer reviews. This includes the use of an “unfounded or groundless legal threat, a physical threat, intimidation, or a public false accusation.”
Social Media Influence
Finally, the Rule prohibits “anyone” from selling, distributing, purchasing, or procuring fake indicators of social media influence that materially misrepresent their influence for a commercial purpose. This includes the purchasing of followers or viewers.
Compliance Recommendations for Employers
In light of the FTC’s recent enforcement actions, businesses are encouraged to be proactive and ensure their continued compliance with the Rule. We recommend that businesses undergo comprehensive policy reviews and brief their senior leadership, technology, social media, and other applicable departments to ensure their staff understands the Rule’s requirements.
If your company has questions regarding its consumer-review practices or its compliance with the Consumer Review Rule, KingSpry’s Business Law and Employment Law Teams are prepared to assist you. Employment News is a publication of KingSpry’s Employment Law Group. These articles are meant to be informational and do not constitute legal advice.
