If you’ve ever read an online review for a product or service and thought, “This is too good to be true,” you were probably right.
On average, about 30% to 40% of online reviews are fake, according to estimates from consumer advocacy groups.
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But that will soon change as the era of fake online reviews is about to come to an abrupt end. The Federal Trade Commission has officially finalized a new rule, which will go into effect in October, that will ban fake online reviews in several different ways.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” said FTC Chair Lina Khan in a press release that announced the rule on Aug. 14.
What will the new rule do?
Fake reviews can be generated through multiple controversial practices, which will be deterred under the new rule.
First, the rule will prohibit “reviews and testimonials" from people who do not exist, which includes reviews that are generated by artificial intelligence, according to the press release. Also, reviews from individuals who never experienced the product, business or service will be banned as well.
In addition, the rule will block businesses from “providing compensation or other incentives” for positive or negative reviews. Also, insider reviews, such as those written by individuals who work for the company, will also be prohibited.
Businesses will also no longer be allowed to use “groundless legal threats, physical threats, intimidation, or certain false public accusations” to prevent or remove a negative review from a consumer.
They will also be banned from “misrepresenting” that a “website or entity” that they control “provides independent reviews or opinions about a category of products or services,” including their own.
Lastly, intentionally buying or selling bots that generate fake followers or views for a social media account will also be barred under the new rule.
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According to the press release, those violating the FTC’s new rule will face civil penalties.
The FTC's final version of this rule comes after it was first proposed in November 2022.
The move from the FTC appears to be part of President Joe Biden’s latest efforts to “end corporate rip-offs,” which involves promoting competition and protecting consumers in the American economy.
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Online reviews can make or break a business, so it is no surprise that some companies have resorted to using deceptive tactics to maintain a five-star rating.
According to a recent survey from CouponBirds, about 76% of consumers said they always check reviews before making an online purchase, and roughly 93% said that online reviews have impacted their buying decisions.
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