The FTC rule on fake reviews: what businesses need to know
Since October 2024, an FTC rule bans fake reviews, buying reviews and hiding negative ones, with civil penalties. What it covers and how to ask for reviews safely.
The FTC's rule on fake reviews, in force since October 21, 2024, bans businesses from creating, buying or selling fake consumer reviews and testimonials, paying for reviews that must be positive, posting undisclosed reviews by insiders, running "independent" review sites they control, suppressing negative reviews through threats or false claims, and buying fake social media followers or views. Breaking it can bring civil penalties of more than $50,000 per violation, an amount adjusted for inflation every year.
The rule's official name is the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials. Before it, the FTC could usually only seek penalties after a business had been warned or ordered once. Now it can seek them for a first violation. For small businesses, the practical message is clear: get reviews honestly, disclose relationships and never hide or fake feedback. This guide explains the six banned practices in plain English. It is not legal advice; for specific situations, ask your attorney.
The six banned practices
1. Fake reviews and testimonials. Reviews by people who do not exist, people who did not actually use your product or service, or that misrepresent the reviewer's experience. That includes reviews written by AI and presented as real customers. Businesses must not create, buy or sell them, or disseminate them when they knew or should have known they were fake.
2. Buying positive or negative reviews. Offering money, lower prices, free products or other incentives conditioned on the review saying something specific, positive or negative. An incentive for any honest review is a different matter under this rule, but see the platform rules below.
3. Insider reviews without disclosure. Reviews by your owners, managers, employees or agents, or their immediate relatives, without clearly disclosing the connection. The rule also covers soliciting such reviews in certain situations and testimonials by insiders.
4. Company-controlled review websites. A site that looks like an independent review or comparison resource but is actually controlled by you to promote your products.
5. Review suppression. Using unjustified legal threats, intimidation or false accusations to stop or remove negative reviews. It also covers presenting the reviews on your own site as representing most or all reviews when you have hidden negative ones based on their rating or sentiment.
6. Fake social media indicators. Buying or selling fake followers, views or likes generated by bots or hijacked accounts, when used to misrepresent your influence or importance for commercial purposes.
What this means in practice
| Common practice | Under the rule |
|---|---|
| Asking every customer for a review | Fine |
| Asking staff to post five-star reviews as "customers" | Banned |
| Money off only for five-star reviews | Banned |
| A small thank-you for any honest review, disclosed | Not banned by this rule, but often against platform rules |
| Showing only positive reviews on your site as if they were all reviews | Can be review suppression |
| Replying calmly to a negative review | Fine and recommended |
| Threatening a customer with a lawsuit over an honest bad review | Banned if the threat is unjustified |
| Buying followers to look bigger | Banned when used commercially and you knew they were fake |
The Endorsement Guides and platform rules
The rule works alongside the FTC's Endorsement Guides, updated in 2023, which require clear disclosure of material connections. If an influencer got a free product, a creator was paid or a reviewer is a relative, that must be disclosed clearly and close to the review or post.
Platforms add their own rules on top. Google's policies prohibit offering incentives for reviews and discourage selectively asking only happy customers to review, a practice often called review gating. Yelp asks businesses not to solicit reviews at all. Amazon has strict programs and bans. Breaking platform rules can lead to removed reviews, warnings on your listing or suspension, even when no law is broken.
How to get honest reviews safely
The good news: honest reviews are not hard to get when you ask consistently.
- Ask every customer, at the moment they are happiest, usually right after the job or visit.
- Make it one tap: a direct link to your Google review form, sent by text or email.
- Send one reminder a few days later, then stop.
- Do not filter. The same request goes to everyone, regardless of how you think the job went.
- Reply to every review, positive and negative, briefly and politely.
- Fix the cause of repeated complaints. That improves reviews faster than any tactic.
A CRM can send the request automatically when a job is marked complete. The Google reviews guide covers wording and timing, and lead follow-up sequences show how the same automation can run before the sale.
Testimonials on your own website
The rule applies to testimonials on your website and in ads too. Use real quotes from real customers, with their permission, unchanged in meaning. Do not combine several customers into one "composite" story presented as a single person. If someone got something in return, disclose it. If you have no testimonials yet, it is better to show case details and results honestly than to invent quotes; that is the approach I take on my own site.
A note for service businesses and local shops
Most small businesses will never deal with the FTC directly. The more likely consequences of shortcuts are practical: Google removes a batch of reviews, a warning appears on your profile, a competitor or customer reports you, or a journalist notices. Local reputation is hard to rebuild. A slow, steady flow of genuine reviews is worth more than a sudden spike that draws attention, and it is the kind of signal customers trust when they compare you with the business down the street.
What to do if you are not sure
Review what you have done in the past two years: incentive programs, old reviews by staff, testimonials you edited heavily, review widgets that show only five-star ratings. If something looks questionable, talk to your attorney about removing or correcting it. Then set up a simple, honest review process going forward.
For businesses that also advertise prices, the FTC's rules on hidden fees are covered in showing prices honestly. If you want review requests built into your CRM, see the CRM page.
Reviews the safe way
Send the same review request to all customers, happy or not.
Employees, relatives and paid creators must make the connection clear.
Calmly and factually. It shows future customers how you handle problems.
No paid reviews, no reviews by staff posing as customers, no AI-written fakes.
An incentive must never depend on the review being positive.
No pressure to remove honest negative reviews and no showing only the good ones as if they were all.
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Fake reviews rule questions
Can I offer a gift card for leaving a review?
The FTC rule bans incentives conditioned on a review expressing a particular sentiment, such as a positive one. An incentive for any honest review is not banned by that rule, but it must be disclosed under the Endorsement Guides, and Google, Yelp and Amazon have their own rules, which are often stricter. Many businesses simply ask without incentives.
Can my employees leave reviews?
Reviews by officers, managers, employees or agents, and their relatives, must clearly disclose the relationship. The rule also bars a business from soliciting such reviews from immediate relatives or employees without disclosure. The safest path is that staff do not review their own employer at all.
Does the rule cover testimonials on my own website?
Yes. It covers consumer reviews and testimonials wherever they appear, including your website, ads and social media. Testimonials must come from real customers, reflect their actual experience and include disclosures where there is a material connection.
What about AI-generated reviews?
A review written by AI and presented as coming from a real customer misrepresents who wrote it or their experience, which the rule prohibits. AI can help you draft a review request email; it should not write the reviews.
Want a steady flow of
real reviews?
I set up review requests that go to every customer automatically after a job, through your CRM or email platform. No incentives, no gating.