FTC Fake Reviews Rule Check (16 CFR Part 465)

The FTC’s Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, at 16 CFR Part 465, took effect on October 21, 2024. It turns long-standing FTC guidance into enforceable rules, which means the FTC can now seek civil penalties of more than $50,000 per violation (the figure is adjusted for inflation each year) under Section 5(m)(1)(A) of the FTC Act, as well as refunds for consumers. The rule bans writing, buying or selling fake reviews and testimonials, including AI-generated reviews by people who don’t exist or who never used the product, and offering incentives for reviews that are conditioned on them being positive or negative.

It also covers practices that small businesses and freelancers often overlook: reviews by owners, staff or their relatives that don’t disclose the connection, so-called independent review websites that you control, suppressing negative reviews by threats or by hiding them on your own site, and buying fake followers, likes or views for commercial purposes. It sits alongside the FTC’s Endorsement Guides (16 CFR Part 255) and the Consumer Review Fairness Act of 2016, which makes contract terms that stop customers from posting honest reviews void. Any business that collects, shows or asks for online reviews, from local trades to online stores and service providers, should check its review practices.