Michael Podolsky, Co-founder and CEO of PissedConsumer, a review platform that helps consumers be heard and brands improve their service.
While online reviews play a big part in consumer decision-making, with 75.5% of surveyed consumers saying they trust online reviews as they do personal recommendations, fake reviews and testimonials have become so prevalent on review websites that skepticism towards the authenticity of online reviews is increasing. The Federal Trade Commission aims to address the issue of astroturfed online reviews with its incoming FTC rule on fake reviews, which arms the FTC with expanded abilities to crack down on such deceptive practices.
What Is The FTC Fake Review Rule?
The new rule is aimed at entities that participate in the generation or solicitation of fake online reviews, and, to this extent, grants the commission greater powers to issue penalties of up to $51,744 per violation to businesses that seek to gain an advantage by misleading the public through:
• Buying fake reviews that give a brand false praise
• Censoring, suppressing or deleting negative reviews
• Offering incentives in exchange for positive reviews
• Issuing threats or using intimidatory tactics against customers that leave a critical/negative, etc., review
The FTC Fake Review Rule And Business Reputation
A brand’s reputation is among its most valuable and also fragile assets. The new FTC review guidelines will increase the level of scrutiny that businesses face and ratchet up the pressure on them to comply with the new legislation. Businesses that persist with dishonest review practices, despite the ruling, will face not only financial consequences but also reputational damage that could prove even more costly.
While the impact of the new ruling remains to be seen, it does provide businesses that do comply with the FTC consumer protection guidelines a springboard from which to differentiate themselves from the competition. If the FTC does wield its new powers to actually make a noticeable, lasting impact on the fake review industry, then those brands that are transparent and honest in their review practices will emerge as credible and trustworthy, benefiting reputation as well as boosting consumer confidence and trust in reviews.
Restoring Consumer Trust
Consumers are increasingly savvy, and they can often spot fake reviews. When a consumer sees such reviews backing up a particular brand, they will usually walk away, regardless of whether or not the brand has been caught manipulating its reputation by an official body.
However, with the new legislation that signals increased scrutiny of such practices, brands that do maintain a high standard of transparency and meet the FTC consumer protection guidelines will stand out to the consumer as having earned an ‘approval’ that will likely lessen consumer skepticism and ‘verify’ the brand, so to speak.
Brands that prioritize transparency and allow a true reflection of consumer experience instead of cherry picking—accepting the good as well as the bad—through compliance with the FTC review regulations will likely see customers who feel confident that reviews they read are genuine. Hence, they are more likely to refer to them as an accurate representation of reality.
What Changes Can We Expect?
Will the FTC fake review rule live up to its promises and usher in profound changes to the way brands respect consumer rights and handle online reviews? This is something that will only become apparent in the coming years. I do, however, anticipate the rapid development of more and more advanced review verification methods, AI-powered solutions, for example, which filter inauthentic reviews based on linguistic patterns and tells in posting activity.
Should the FTC put its weight behind enforcing the new legislation, investing resources and taking a more aggressive approach, I see them pursuing not only the offending companies and ensuring business compliance with the FTC rules, but also tackling the serious problem of the fake review industry that has grown in parallel with fake review practices.
Enhancing Transparency And Trust
The FTC rule on fake reviews has the potential to calm the turbulent waters of the online marketplace in a way that renews consumer confidence in online testimonials and by that enhances their usefulness.
While I welcome this development and am strongly in favor of it, the truth is that I feel that few companies will react to it immediately. Rather, the majority will hesitate to take it seriously and will not make any changes in response until we see it in action. By this I mean the first high-profile case that dishes out significant penalties and makes the industry pause.
That being said, the advantages of a business acting on the message stand independent of this new regulatory legislation. By striving for transparency and openness that is encouraged by high-quality standards and a robust customer satisfaction strategy, brands can and will establish stronger, genuine customer relationships that pay dividends in the traditional sense as well as in terms of online reputation.
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