The Federal Trade Commission is proposing new rules to ban companies from using bogus consumer reviews to promote products.
The FTC said with the growth of artificial intelligence, it is becoming easier for companies to write fake reviews.
The new rules would prohibit companies from writing or selling consumer reviews by someone who does not exist or did not have experience with the product or service. Businesses would also be banned from using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product.
Companies would be banned from providing incentives for writing a positive review.
Businesses would also be prohibited from disseminating testimonials from employees and their relatives without disclosing their relationship with the company.
The new rules are set to go into effect at the end of August.
“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”
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According to researchers from the University of Oxford and the University of Southern California, 42% of all Amazon consumer reviews are fake or unreliable. Meanwhile, 82% of consumers say they look at customer reviews before buying an item online for the first time.
"Fake reviews make consumers more likely to choose inferior products," the study determined.
Earlier in 2023, the FTC fined the Bountiful Company, whose brands include Nature’s Bounty and Sundown, $600,000 after the FTC charged the company with deceiving customers on Amazon.com.
The FTC alleged the Bountiful Company with “hijacking ratings and reviews” on the website to make customers think their products were higher rated. The FTC said it used this tactic by “merging its new products on Amazon with different well-established products that had more ratings, reviews, and badges.”
@scrippsnews You’ve likely seen them before, fake online reviews could be impacting your decision on buying a product. The FTC proposed new rules last week to ban fake product reviews and other deceptive practices. #reviews #OnlineShopping ♬ original sound - Scripps News
