“Companies should know by now that fake reviews are illegal, but this scourge persists,” said Samuel Levine, Director of the Federal Trade Commission (FTC) Bureau of Consumer Protection, in a press release published on October 20, 2022. Since publishing the press release, the FTC has warned that the passing of the official trade regulations regarding reviews and testimonials was imminent. Companies were advised to shape up or be prepared to face thousands of dollars in fines and penalties.

Well, put on your party hats because it’s official!  Four versions and two years later, the FTC’s stance on fake reviews is set in stone, meaning violators will soon be held accountable. To provide further context, before any official ruling, the FTC releases guidelines to the public for comments to ensure that any new ruling is as fair, comprehensive, and clear as possible. This happens over many years to ensure that the FTC can refine its language, close any legal loopholes, and ensure the guidelines are workable and cover the intended scope without creating negative consequences. 

The good news is that TrustRadius has always complied with the FTC since it was founded in 2012 (before the FTC ruling on reviews), including this most recent pronouncement. 

The new ruling regarding the Trade Regulation Rule on the Use of Consumer Reviews and Testimonial, FTC 16 CFR Part 465, is a 163-page document. Its purpose is to handle untrustworthy business practices regarding online reviews, endorsements, and testimonials in all types of advertising. 

Don’t worry; I read it, so you don’t have to. You’re welcome. 

Here are the five takeaways that the ruling covers:

Fake reviews

The FTC prohibits businesses from using fake customer reviews to mislead potential customers. That seems like a no-brainer, but whether in B2B or B2C, companies are still soliciting positive reviews for something in exchange, like free products, money, or publicity. At TrustRadius, we believe in building and maintaining buyer trust, so we vet every user before publishing their content on our platform. I wrote about how we successfully fight fake reviews in this year’s Fighting Fraud: Review Quality Report 2024. There, I spilled all the secrets to fighting fake reviews successfully, including reviews written using artificial intelligence (AI).

We get it. Chat GPT is super useful, and it’s fun to ask it to help with everything from telling the best dad jokes to fixing that email to your boss. Where it doesn’t belong is in your technology reviews. In our product-specific questionnaires, we ask questions to learn about your personal insights and how you use specific software in your role. Given that ChatGPT doesn’t use it and can’t help with that, we only publish authentic reviews written by actual users.

Other people have also noticed our hard work in fighting against the AI machine. Jonathan Gillham, CEO at Originality.ai, shared in a recent third-party case study that the “…stark difference between TrustRadius and [G2 and Capterra] appeared once ChatGPT was released near the end of 2022, with TrustRadius well below the other two who rose to more than 25% of reviews being AI generated. Perhaps this reduction is not surprising, as TrustRadius says it rejects 47% of reviews submitted and that ‘suspicious user’ is the #1 reason for rejection.”

Suppressing negative reviews

The recent iteration of the FTC ruling prevents companies from hiding negative reviews from potential customers and creating a false representation of their products. So, many review sites openly sell the top spot on the list to the highest bidder. That might be their business model, but it doesn’t help actual buyers and build trust. At TrustRadius, we promise our buyers that they can trust that the user feedback they are reading is genuine and not manipulated. No one can pay to have a review removed or suppressed.

Review manipulation, aka cherry-picking

The FTC also prohibits soliciting, incentivizing, or purchasing positive reviews. There is no amount of money, goodwill, or favors any business can give us to change the sentiment of a review. It’s something we will not do. The only way a review will be updated on our platform is by the reviewers themselves. Don’t take my word for it; we built a proprietary algorithm, trScore, that calculates a product’s score based on a weighted average of its reviews and ratings rather than a simple average. This gives an actual representation of buyer sentiment that can’t be manipulated.

But what’s so bad about cherry-picking? Happy customers are real users, but the product’s score based on a simple average will be biased when over-represented. Why not just an average? Over time, simple averages don’t always tell the most up-to-date story. A product two years ago can look and function entirely differently than today.  

To combat these things, we weigh scores from reviews from a random, representative sample of users more heavily than scores from biased samples. We also give more weight to recent reviews and ratings than past ones. 

In 2021, we launched our transparent, responsive, unbiased, and ethical (TRUE) program, which celebrates vendors who invite all of their customers to write reviews rather than cherry-picking the happiest ones. This certification is proudly promoted on product pages that embody its values, regardless of their customer status with TrustRadius, and serves as a trust signal for buyers.

TRUE-certified vendors must:

• Provide equal opportunity for product users to safely share honest feedback in reviews (i.e., they don’t cherry-pick certain customers to invite to write reviews)
• Disclose how they source reviews and how incentives are used
• Read all published reviews and respond when necessary
• Represent review content accurately in sales and marketing materials
• Disclose the use of intent data for marketing purposes

This isn’t a one-time certification, either. Vendors must renew this designation annually. See the full list of 2024 TRUE vendors.

Incentive disclosures

The FTC mandates that incentives be disclosed, i.e., when cash or free goods are received in exchange for writing a review. Both TrustRadius and vendors use incentives to encourage users to write long-form reviews and as a thank you for their time. Incentives increase response rates overall and motivate reviewers to spend more time on their reviews, leading to a more representative set of opinions. Incentives are never contingent on sentiment, and if an incentive has been received, we disclose that information with the review for all readers to see. A badge appears on a review that says “incentivized” if one was given to the reviewer, so any buyer can keep that in mind when using that review as part of their research. 

Incentives are widely used in B2B reviews because they increase response rates overall. Let’s face it: Product users need to be intrinsically motivated to leave long-form technology reviews that could help inform other buyers’ purchase decisions. Otherwise, details on features, integrations, or use cases would be left out or summarized from a 30,000-foot view. Incentives increase participation from a broader range of users rather than just those on the polar sides of the rating scale, like extreme promoters and detractors. 

On TrustRadius, our reviewers must confirm that any incentive received does not rely on the score or on specific positive language used in their review. If that’s the case, we will not publish it. 

Enforcement and penalties

Do you have a spare $51,744 in your budget? The FTC now has the authority to impose penalties against businesses that violate the rules. That’s $51,744 per violation per impacted user. The FTC is not messing around. The goal is to protect consumers from deceptive marketing practices and maintain trust in both the B2B and B2C marketplaces. We agree and have been following all outlined regulations for years.  

The new FTC ruling ensures transparency, fairness, and accuracy in all consumer reviews, moving us toward a more trustworthy marketplace. I love that for them and us. TrustRadius and its customer reviews, assets created by our team, content syndicated from our platform, etc., are all in complete compliance with the recently finalized Federal Trade Commission 16 CFR Part 465. Wow, that’s a mouthful; we must give it a catchier name. 

So now you know all reviews you read should be legally legitimate. Is this a truly enforceable law? That has yet to be determined.

Because it’s still the Wild West out there, it’s up to review platforms to defend the marketplace from bad actors with ill intentions. It’s a huge task. So ask yourself, is the peer review platform you use to research your next tech purchase being proactive against FTC violations like TrustRadius or reactive like those other sites?