FTC Warns Businesses About Fake Reviews, Urges Consumers to Stay Vigilant

The headline refers to a recent FTC enforcement push under its new Consumer Review Rule, which targets businesses that use fake or deceptive online reviews and urges consumers to scrutinize reviews more carefully and report suspicious ones. The agency has sent warning letters to multiple companies and is emphasizing both legal risks for businesses and practical steps for shoppers to protect themselves.​

What the FTC is doing

• The FTC has launched an enforcement sweep under its Consumer Review Rule, which took effect in late 2024 to combat fake and misleading reviews. The rule bans creating, buying, or selling fake reviews, paying for only positive reviews, and suppressing honest negative feedback.​

• Staff recently sent warning letters to 10 companies, saying their review practices may violate the rule and warning that continued problems could lead to federal lawsuits and civil penalties of up to about $53,000 per violation. These letters stress that deceptive review tactics can trigger enforcement even if the company has not yet been formally found in violation.​

Key rules for businesses

• Businesses are prohibited from creating or selling fake reviews or testimonials, and from buying or using reviews they know or should know are fake or materially misleading. The rule also bars compensating reviewers for expressing a particular sentiment (for example, only 5‑star or positive reviews).​

• Companies cannot misrepresent insider reviews (from employees, agents, or family) as independent and must clearly disclose those relationships. They also may not hide or filter out negative reviews, threaten customers to remove criticism, or run company-controlled “review” sites that appear independent.​

What consumers are urged to do

• The FTC advises consumers to look at reviews from multiple sources and note whether a site or its reviews are sponsored or curated by the seller. People are encouraged to pay attention to how recent reviews are and be cautious if there is a sudden burst of very similar or uniformly glowing reviews in a short time.​

• When a review seems fake or deceptive, consumers should report it to the platform (for example, major marketplaces or search sites) and can also report it to the FTC via ReportFraud.ftc.gov, using “fake review” in the description if needed.​

Why this matters

• Fake reviews can waste money, distort competition, and make it harder for people to make informed choices about products and services. Honest businesses are also harmed because they lose customers to competitors who artificially inflate their reputations with deceptive tactics.​

• Under the FTC’s Consumer Review Rule, a fake review is essentially any review or testimonial that misrepresents who wrote it or what their experience was. In plain terms, a review is treated as fake or false if it:​

  • Pretends to be from a person who does not exist or did not actually use the product, service, or business being reviewed (including AI‑generated or fabricated identities).​

  • Misrepresents the reviewer’s experience, such as exaggerating benefits, inventing experiences, or claiming results the reviewer never had.​

  The rule makes it an unfair or deceptive practice to write, create, sell, buy, or disseminate such reviews when a business knew or should have known they were fake or false