Crowell & Moring’s Holly Melton, Roy Abernathy, and Helen Ogunyanwo discuss what brands need to know about consumer reviews, testimonials, and endorsements in 2024. Read more in Law360: Link to Full Article
Consumer Reviews
FTC Issues Long-Awaited Updates to the Endorsement Guides
On May 20, 2022 the Federal Trade Commission’s (“FTC”) Commissioners unanimously approved a request for public comment on proposed updates to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides” or “Guides”). In the draft revisions, released last week, the FTC seeks to update the Endorsement Guides and provide new examples that reflect advertisers’ growing reliance on social media advertising. The Endorsement Guides were last revised in 2009. See 16 CFR pt 255.
The Endorsement Guides require advertisers that feature endorsements made by endorsers with an unanticipated material connection to the advertiser—for example, monetary payment, a sweepstakes entry, or something else of value—to disclose that connection in the advertising. In addition, endorsements must be truthful and accurate, reflecting the endorser’s actual experience with the product. Marketers that fail to comply with the Endorsement Guides violate Section 5 of the FTC Act.Continue Reading FTC Issues Long-Awaited Updates to the Endorsement Guides
CFPB Announces Policy Against Consumer Review Suppression
We recently reported on the Federal Trade Commission’s (“FTC”) increased enforcement against review curation policies that disproportionately restrict or remove negative reviews. Now, the Consumer Financial Protection Bureau (“CFPB”) has issued a Bulletin that makes clear that the suppression or manipulation of consumer reviews posted about financial products and services is an unfair and deceptive act or practice. The CFPB’s Bulletin drew from recent FTC guidance and enforcement activity as well as the Consumer Review Fairness Act of 2016 and stated that conduct such as (1) deceptively posting fake reviews that appear independent, (2) suppressing or manipulating reviews such as by limiting the posting of negative reviews, or (3) imposing contractual ‘gag’ clauses on consumers in form contracts that prohibit honest reviews is generally a violation of the Consumer Financial Protection Act.
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FTC Ramps Up Enforcement on Consumer Reviews
A few months after putting the nation’s top advertisers on notice that consumer endorsements are high priority, the Federal Trade Commission (“FTC”) recently announced a settlement with online retail company Fashion Nova, LLC (“Fashion Nova”) for allegedly blocking negative reviews from being posted on its website, signaling to retailers that the FTC is cracking down on companies that inflate consumer reviews. In conjunction with the settlement, the FTC also released guidance regarding the collection and publication of online reviews directed to online retailers and review platforms and announced that it sent letters to 10 companies offering review management services.
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