The Commission’s Rule on the Use of Consumer Reviews and Testimonials went into effect on October 21, 2024. The Rule addresses deceptive and unfair conduct involving consumer reviews and testimonials. You can review other guidance on reviews and testimonials, including materials relating to our Endorsement Guides.

The FTC’s Revised Endorsement Guides address a broader range of conduct than the Rule does. The former sets forth general principles relating to the use of endorsements and testimonials in advertising and reflect the FTC’s administrative interpretation of how Section 5 of the FTC Act, 15 U.S.C. § 45 - which prohibits “unfair or deceptive acts or practices in or affecting commerce” - applies to the same. The Rule, on the other hand, formally prohibits certain practices identified as unfair or deceptive in the updated Endorsement Guides.

Unlike the Endorsement Guides, which are not themselves independently enforceable, violations of the Rule can result in, without limitation, heavy civil monetary violations of more than $50,000, per occurrence (subject to annual inflation adjustment).

The following is intended to illustrate 10 things advertisers should know about the Rule. It is not intended, nor should it be relief upon, as a complete recitation of legal obligations in restrictions set forth in the Endorsement Guides or the Rules.

    1. Can individuals be liable under the Rule for what they say or don’t say in reviews or testimonials?

Ordinary consumers cannot be liable under the Rule for what they say or do not say in reviews or testimonials. The provisions that address what reviews or testimonials say or do not say only apply to the conduct of businesses.

Influencers who are in the business of posting testimonials about products or services are selling celebrity testimonials and could be liable under Section 465.2(a) of the Rule if they lie about having used the product or service or about their experience with it.

Also, an individual in the business of selling or creating fake consumer reviews could be liable under Section 465.2(a) of the Rule.

    2. Can advertising agencies, public relations firms, review brokers, or reputation management companies be liable under the rule?

Yes. These entities are not immune from liability under the Rule. 

For example, they could be liable under Section 465.2(a) if they write, create, or sell a fake or false consumer review, consumer testimonial, or celebrity testimonial. They could be liable under Section 465.4 of the Rule if they provide compensation or other incentives conditioned on the writing or creation of consumer reviews expressing a particular sentiment. They could also be liable under Section 465.7(a) if they engage in review suppression or under Section 465.8 if they misuse fake or false indicators of social media influence.

    3. Does the rule cover when and how influencers should disclose their relationship to a brand?

No. The Rule’s only disclosure requirements relate to certain situations involving company insiders. However, failing to disclose relationships between influencers and brands could violate the FTC Act. FTC staff has guidance about such disclosures to help businesses and influencers avoid violations.

    4. Does this section of the rule apply to brokers of fake reviews?

Yes. Brokers of fake reviews would generally fall under Section 465.2(a)’s prohibition against selling a consumer review, given that such brokers are generally being paid to provide fake reviews.

    5. Our business hires influencers to review our products. Are those reviews covered by the rule?

Under the Rule, a hired influencer’s social media post touting a product would be considered a celebrity testimonial, not a review. Your business could be liable under Section 465.2(b) if it knew or should have known that any such influencers misrepresented that they used or had experience with the product or misrepresented their experiences with it.

    6. When our business hires influencers, how are we supposed to know that they are telling the truth about their experience with the product?

Businesses should look for red flags indicating that a testimonial is likely fake or false, and they should act accordingly if such a flag is present. For example, if someone gives a testimonial and then asks for the product, a business should question whether the testimonialist used the product. Similarly, if you know that someone who gives a testimonial is using a competing product, you should inquire into whether the testimonial for your own product is truthful. Also, a business should not provide the text for a testimonial without a reasonable basis to conclude that the text is truthful about the testimonialist’s experience.

    7. Can my business ask for reviews only from customers whom we think are happy with our services?

The Rule does not contain a specific prohibition against such conduct. But this practice could violate the FTC Act. See, e.g., Endorsement Guides 16 C.F.R 255.2(d) and (e)(11). Contact a social media influencer lawyer to discuss strategies designed to minimize liability exposure related to the manner in which your business is soliciting reviews. 

    8. Is our business allowed to give consumers incentives for reviews?

The Rule does not prohibit giving incentives for reviews, as long as there is not an express or implied requirement that the reviews have to express a particular sentiment. But remember that failing to disclose incentives could be a violation of the FTC Act. See, e.g., Endorsement Guides 16 C.F.R 255.5(a) and (b)(6)(ii).

    9. Can my business pay incentives for 5-star reviews on third-party review platforms, so long as we ask the reviewers to add a disclosure about the incentive?

No. That conduct would violate Section 465.4 of the Rule. Note also that this section applies whether the reviews appear on your website or third-party review platforms.

   10. The rule prohibits businesses from implying that a review has to be positive in order for consumers to get an incentive for the review. What does that mean in practice?

It means that you cannot suggest to consumers that their reviews must be positive (or negative) in order to obtain a promised incentive – even if you don’t say so explicitly. For example, you would be implying that reviews have to be positive if you said: “Tell us how much you loved your visit to John’s Steakhouse and get a $5 coupon” or “Tell your friends about all the fun you had at Jane’s Arcade for a chance to win prizes.”

   11. Does the rule prohibit my business from offering compensation to a consumer to remove or change a review?

No, but paying consumers to change or remove truthful negative reviews may violate the FTC Act as an unfair or deceptive act or practice, because it may wind up distorting or otherwise misrepresenting what consumers think about your business or its products. See, e.g., Endorsement Guides 16 C.F.R 255.2(d)..

   12. Is my business violating the Rule if we ask insiders to write reviews of our products, without instructing them to disclose their relationships to the company in the reviews?

Yes, if the reviews do not contain clear and conspicuous disclosures. But be aware that, if these reviews materially increase the average star rating of a product, the business could be violating the FTC Act even with such disclosures, because consumers might see only the star rating and not look at the individual reviews. See, e.g., Endorsement Guides 16 C.F.R 255.5(b)(6)(ii).

   13. What does a business need to do after an officer asks employees to get reviews from their relatives? Does it need to take affirmative steps to see whether any reviews are then posted by such relatives and appear without disclosures?

The FTC does not expect an officer or manager to scour every review of the business for possible insider reviews appearing without a disclosure. There may be red flags, however, that should cause officers or managers to inquire further. An example that is at least applicable to smaller companies is when an officer or manager asks employees to obtain reviews from relatives and later spots a review without a disclosure by someone who the officer or manager recognizes as having the same last name as an employee. Another example is an employee sending a soliciting officer or manager a link to the resulting review, in which case the officer or manager should take the time to see if that review has a disclosure.

   14. The Rule says that, when a disclosure is required, it has to be “clear and conspicuous,” and the definition of that term says that the disclosure needs to be “unavoidable.” What does “unavoidable” mean? Can I use a hyperlink?

“Unavoidable” is an objective standard that turns on whether consumers could have avoided the disclosure. The Rule’s “clear and conspicuous” definition says that a disclosure is avoidable when “a consumer must take any action, such as clicking on a hyperlink or hovering over an icon, to see” it.

   15. If someone posts a negative review about my product, can I respond publicly? Do I need to watch what I say?

Yes, you can respond publicly to the review, and yes, you should watch what you say. An experienced FTC influencer lawyer may be able to provide guidance on how to safely interact with those that leave reviews about your business.

The Rule prohibits making a false accusation about the reviewer if you know that the accusation is false or make it with reckless disregard as to its truth or falsity. Your response also should not use physical threats or intimidation to get the review (or a portion of it) removed or changed.

The foregoing is not intended to be, and should not be relied up as, a complete or comprehensive summary of the obligations and restrictions set forth in applicable legal regulations, including, but not limited to, the FTC’s Rule on the Use of Consumer Reviews and Testimonials, and the FTC’s Endorsement Guidelines.