Just last week, the FTC penalized a fashion company with a $4.2 million fine for deceptive review practices. In this week’s video, we walk through the fine and why it was assessed – and explain why thousands of sites are in danger of being fined for the same reason.
VIDEO TRANSCRIPT
Welcome back to another episode of Local Search Tuesdays. This week, I’m sharing a crazy story about a massive fine the FTC just gave to a clothing retailer because of review violations… and it’s a violation you might have on your own site!
Just last week, it was announced that the FTC assigned a $4.2 million fine to Fashion Nova because of the way it displayed customer reviews on its site. What’s really scary about the situation is that they were doing something that tens of thousands, maybe even hundreds of thousands of other businesses are also doing.
Basically, they were fined for “misrepresenting customer reviews on their website”. They used a third-party tool to display reviews – a widget that pulled in reviews from other sources and aggregated them on their site.
BUT – that review widget only pulled in 4 and 5-star reviews. The 3 star and below reviews simply weren’t displayed.
Sound familiar? It should – that’s basically how pretty much every “review widget” works right now. The FTC has now penalized this company with a massive fine because that widget concealed negative reviews. From late 2015 to 2019, none of the thousands of negative reviews were posted to the site, which the FTS says “deprived customers of potentially useful information and artificially inflated the aggregate star rating”
In the same announcement about the fine, the FTC also said that they’ve sent letters to 10 companies that offer reputation management service, placing them on notice that avoiding the publication of negative reviews is a violation of FTC law.
This is pretty scary since most review widgets do exactly the same thing. Tons of auto dealers have the DealerRater widget on their site that does the same thing, for example. If you’ve got a page on your site with one of these widgets, you need to make sure you change the settings to show all of your reviews, or you’ll be risking an FTC fine as well.
To be sure you’re not in FTC violation, here are a few simple guidelines to follow:
If you’re publishing reviews on your site, publish all of your reviews, not just positive ones
Don’t display reviews in a misleading way. Displaying positive reviews more prominently is still a violation.
Do not incentivize reviews
If you’re going to ignore number 3 and a reviewer has received any compensation for a review, it should be explicitly stated in the review
Treat all reviews equally
That’s all the time we’ve got left for this week’s episode, so you know what that means.
Put your hand on the screen right here:
We totally just high-fived ‘cause you learned something awesome.
Thanks for watching, and we’ll see you again next week for another episode of Local Search Tuesdays.
