- in United States
The Federal Trade Commission (FTC) issued warning letters to ten companies for alleged deceptive review practices, indicating its intent to step up enforcement of its relatively new Consumer Review Rule (16 C.F.R. Part 465) (“the Rule”).
The warning letters have implications for all direct-to-consumer sellers. For industries that rely heavily on consumer reviews, including dietary supplement, health and wellness, and beauty/personal care companies, the FTC's action is particularly significant. These industries often market using consumer reviews, influencer endorsements, testimonials, and before-and-after content—practices that now carry increased regulatory risk. While the warning letters do not constitute formal findings of liability, they underscore the FTC's readiness to pursue civil penalties of up to $53,088 per violation against the recipients (an amount that will likely increase in 2026 with inflation-adjusted civil penalties).
The FTC's Enforcement Targets
The FTC released a warning letter template as a compliance guide for businesses that use consumer reviews or testimonials. The FTC's warning letters outline six types of conduct that the FTC believes are prohibited under the Rule:
- Fake or False Reviews: Creating, purchasing, or disseminating reviews or testimonials from individuals who did not actually use the product or service, or that misrepresent the reviewer's experience.
- Incentives for Positive Reviews: Offering compensation (e.g., discount, refund, free product) that is expressly or implicitly contingent on the review expressing positive (or negative) sentiment.
- Undisclosed Insider Reviews: Officers, managers, employees, agents, or their relatives posting reviews or testimonials without clearly and conspicuously disclosing their material connection to the company.
- Company-Controlled “Independent” Review Sites: Operating or controlling a purportedly independent review website or platform without clearly disclosing the company's ownership or control.
- Review Suppression (“Gatekeeping”): Using legal threats or other coercive tactics to remove negative reviews or misrepresenting that displayed reviews reflect all or most consumer feedback while selectively suppressing unfavorable reviews.
- Fake Social Media Indicators: Buying or selling bot-generated followers, views, or other engagement metrics to artificially inflate perceived commercial influence.
Compliance Considerations
These warning letters confirm that the FTC is actively monitoring consumer complaints, online reviews, and company websites for potential Rule violations. Businesses should promptly take the following steps:
- Audit Review Display Practices: Ensure your website and marketing materials do not selectively display only positive reviews or misrepresent the completeness of consumer feedback.
- Review Incentive Programs: If your company offers incentives for reviews, ensure requests are neutral and not explicitly or implicitly tied to positive sentiment. Phrases like “Tell us how much you loved it for 10% off” may increase regulatory risk.
- Train Employees on Disclosure Obligations: Remind employees, executives, and agents that any reviews or testimonials they post about company products or services must clearly and conspicuously disclose their relationship with the company.
- Verify Third-Party Vendor Compliance: If you use reputation-management firms, marketing agencies, or social media vendors, carefully audit their practices. The FTC will take the position that companies can be held liable for fake reviews, review suppression, or artificial engagement by third parties acting on their behalf, regardless of contractual disclaimers.
Key Takeaway
The FTC's warning letters and template make clear that enforcement of the Consumer Review Rule is now active. Companies that use consumer reviews in marketing or sales should reassess their practices to reduce regulatory risk, especially as the FTC prioritizes deceptive digital advertising and online influence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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