The Federal Trade Commission (FTC) regulators plan to crack down on fake business reviews parading internet platforms, especially companies’ websites. Online reviews are now used as evidence to show a business’s performance since most of them are written by customers or doled out by service providers. Due to the rampant use of internet services, many consumers check out most businesses online before seeking services. They are automatically enabled to read reviews posted by the company or customers.
The FTC is against fake business reviews, which are being used by specific businesses to lure consumers. It stated that “When the Federal Trade Commission finds a case of fraud perpetrated on consumers, the agency files actions in federal district court for immediate and permanent orders to stop scams; prevent fraudsters from perpetrating scams in the future; freeze their assets, and get compensation for victims. When consumers see or hear an advertisement, whether it’s on the Internet, radio or television, or anywhere else, federal law says that ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence” [Source].
For small companies, this is a marketing strategy that appears like a well-established entity with many customers. It is hard for a new business owner to attract consumers without spraying around inviting aroma, where fake business reviews come into play. Also, some institutions tend to fabricate their performance and appear to exhibit prowess in executing their duties.
Such moves are deemed unfair to customers as they can get substandard services after being sold a lie to get their money. Lying for the sake of financial gains is wrong, and the Federal Department is in pursuit of putting a cap on these activities. Since the Internet does not have a credibility check, it is easy to propagate lies and get paid. Also, people tend to trust information acquired on the Internet and do not exert any effort in trying to find out if it’s correct or not. A famous description of online platforms or the Internet states that these online services are a pool of opinions propelled by individuals who have access to the Internet, and this means that one should be skeptical of the information obtained online.
Businesses tend to exploit this aspect and crown themselves as gods in delivering world-class services. The coronavirus outbreak pandemic ensured that businesses marketed their products and services on social media. A post on these platforms can only attract people with many followers, likes, shares, retweets, comments, and good reviews.
And most businesses chase these elements as a way of fishing buyers. According to the FTC, on Thursday, it warned hundreds of established corporations and small companies against this trend as it can attract a fine. “The FTC looks especially closely at advertising claims that can affect consumers’ health or their pocketbooks – claims about food, over-the-counter drugs, dietary supplements, alcohol, and tobacco and on conduct related to high-tech products and the Internet. The FTC also monitors and writes reports about ad industry practices regarding the marketing of alcohol and tobacco,” and this outlines its area of concern.
In a released statement on its website, it was noted that “During the recent coronavirus (COVID-19) pandemic, the FTC has been sending warning letters to companies that may be violating the FTC Act, to warn them that their conduct is likely unlawful and that they can face serious legal consequences, such as a federal lawsuit if they do not immediately stop.”
The FTC revealed how it had “sent formal notices of penalty offenses to about 700 companies, warning they could face penalties of up to $43 792 for each violation”. The Commission noted how some businesses use “bogus endorsements to deceive consumers.” Warned companies composed of retailers, advertisers, ad agencies, and consumer product entities. These companies include Amazon, Apple, Facebook, Google, Google’s YouTube video service, AT&T, Comcast, Abercrombie & Fitch, Anheuser-Busch, General Electric, General Motors, Honda, eBay, and Yelp [Source]. But the FTC explained that not all organizations which received notices are engaging in these illicit activities or dubbing their customers.
“The rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace,” as noted by the FTC. Contents of the notices were centered on condemning malpractices of “falsely claiming a third-party endorsement, misrepresenting whether an endorsement is an actual user or using an endorsement to make deceptive performance claims. It also listed failing to disclose a significant connection with an endorser and misrepresenting that the endorser’s experience represents that of a typical consumer”.
The FTC is trying to enforce consumer protection laws which are undermined across the globe as customers are swindled of their hard-earned money through false advertising. Samuel Levine, who heads the agency’s consumer protection bureau, said, “Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses.” He added that “Advertisers will pay the price if they engage in these deceptive practices.”
In its job description, “The FTC enforces these truth-in-advertising laws, and it applies the same standards no matter where an ad appears – in newspapers and magazines, online, in the mail, or on billboards or buses.”