FTC Settlement Addresses Incentivized Reviews
Consumers often read reviews before buying a product or signing up for a service. Because of that, many companies closely monitor what consumers say about them online, and even take steps to generate positive buzz. One way companies do that is by incentivizing happy customers to write reviews. Although there is nothing inherently wrong with that tactic, a recent FTC settlement demonstrates that there are still boundaries to what companies can do.
AmeriFreight, an automobile shipment broker, advertised on its website that it had “more highly ranked ratings and reviews than any other company in the automotive transportation business.” It also encouraged prospective customers to trust those reviews, stating: “You don’t have to believe us, our consumers say it all.” What the company didn’t say, however, is that it had provided incentives for some of those consumers to write the reviews.
For example, according to the FTC’s complaint, AmeriFreight provided consumers with a $50 discount, if consumers agreed to review the company’s services online. In addition, the company offered a $100 monthly prize for the review with the “most captivating subject line and best content.” In its agreement with consumers, AmeriFreight also reserved its right to charge consumers who didn’t write reviews, as promised.
As we’ve noted in previous posts, if a company provides consumers with an incentive in exchange for reviewing or promoting the company’s products, the company needs to ensure that the consumers disclose that they’ve received that incentive. That is particularly true in a case like this, where the company itself promoted the reviews, and suggested that the reviews reflected the unbiased views of its customers.