Money can’t buy loyalty. If you need us to tell you that, you may want to reevaluate your own marketing strategies.
Not that incentivizing loyalty hasn’t occurred before. But the line between incentivizing loyalty through a rewards program and purchasing loyalty isn’t a thin one. Nor is it solely a question of ethics. It’s a question of a general protocol between brands and customers. And that protocol establishes trust—the most valuable asset a brand can hope to have.
Brands know this. Customers know this. And the FTC knows this.
That’s why they’ve finalized a new rule prohibiting fake reviews and testimonials.
Why it took over two years for that rule to be finalized is another question altogether.
Bad Actors, Bad Practices and the FTC Crackdown
As any established seller will tell you, Amazon is far from immune to review manipulation. It's an unfortunate tactic which disreputable sellers have stooped to countless times—sometimes with results that can be almost hilarious. It’s particularly true in China, where a thriving underground fake review market has sprouted up unchecked and rarely enforced, despite Amazon’s best efforts.
But domestic fake reviews are enforceable, and not solely by Amazon seller protocol.
In August 2024, The FTC established a ruling “addresses reviews and testimonials that misrepresent that they are by someone who does not exist, such as AI-generated fake reviews, or who did not have actual experience with the business or its products or services, or that misrepresent the experience of the person giving it. It prohibits businesses from creating or selling such reviews or testimonials. It also prohibits them from buying such reviews, procuring them from company insiders, or disseminating such testimonials, when the business knew or should have known that the reviews or testimonials were fake or false.”
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” stated FTC Chair Lina Khan.
“By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive,” she added.
The 2024 ruling isn’t the first time that the agency has proposed a strengthening of guidelines against deceptive review manipulation. But the ruling specifically “prohibits businesses from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative. It clarifies that the conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed.”
“Implicitly” conveyed, that is.
Fair Advertising and Social Proof
There's a reason why review manipulation is against Amazon's terms of service. Social proof is one of the most significant drivers of Amazon's success; and social proof demands authentic feedback to validate the customer-centricity that Amazon was built upon.
That's why sellers can't automatically remove reviews. It's not just misleading. And it's not just against Amazon guidelines. It violates what customers demand from a social proof-driven environment like Amazon: the good, the bad and the ugly.
The FTC’s action can now charge sellers with potential fines of up to $51,744 for each violation of the ruling. It also bans companies from threatening customers to remove negative reviews, purposely deleting negative reviews, and selling fake social media followers or views.
The decision was the result of a 5-to-0 vote and is scheduled to be in effect by mid October.
Are Online Platforms Doing Enough to Thwart Bad Actors?
Yet federal guidelines and legality may not be enough to staunch the influx of bad actors.
Amazon allegedly removed over 200 million fake reviews in 2020. But Amazon isn’t the only platform affected by fake reviews. in 2021, Yelp! reported over 950 “suspicious groups, posts, or individuals” engaged in review manipulation on other platforms, leading to their removal of over 200,000 deceptive reviews while that same year revealed reports of a widespread extortion scheme using Google reviews to denigrate the reputation of restaurants in multiple metropolitan cities.
But the steady popularity of generative AI has also increased the preponderance of fake reviews. With a simple yet liberal peppering of keywords and prompts, even the most clumsy and tersely written review can be turned into a 5 star accolade that is both coherent and nearly indistinguishable from everyday language.
The FTC ruling may be a breakthrough, and certainly a step in the right direction. But it’s also up to both sellers and digital platforms to take their own steps in preventing fraudulent testimonials.
With the rampant proliferation of misinformation online,protecting the integrity of social proof is needed now more than ever. Businesses can take the first step by reporting suspiciously written reviews for both their brands and their competitors.
Poorly written reviews that are seemingly nonsensical and replete with spelling mistakes and grammatical errors is generally a good indicator that a human is attempting to rig the review system. Similarly, finding an otherwise small and obscure brand with several thousand reviews (both positive and negative) should also be viewed with suspicion.
As the third party marketplace on Amazon and other sites continues to reach near saturation, it's up to both brands and platforms to be proactive in ensuring objective reviews. Because like it or not, it's not just fair advertising laws being affected by review manipulation and fake testimonials.
It's the integrity of digital commerce itself.
Not knowing who is reviewing your business can hurt you more than your competitors can. Find out more at Color More Lines
Comments