The Federal Trade Commission and State Attorneys General are aggressively investigating the use of fake or false consumer reviews and testimonials – including AI-generated reviews – on consumer review platforms like Google and Yelp. At both a federal and state level, regulatory agencies are seeking harsh monetary civil penalties and damages against violators of applicable consumer protection legal regulations.
What is the FTC Consumer Reviews and Testimonials Rule?
The FTC Consumer Reviews and Testimonials Rule (the “Rule”) took full effect in October 2024 and prohibits deceptive or unfair conduct related to the use of product reviews in advertising and marketing.
Specifically, the Rule prohibits:
- Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials:
The Rule 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.
The Rule also prohibits businesses from creating or selling such reviews or testimonials. It prohibits businesses 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.
- Buying Positive or Negative Reviews:
The Rule prohibits businesses from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative. The Rule clarifies that the conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed.
- Insider Reviews and Consumer Testimonials:
The Rule prohibits certain reviews and testimonials written by company insiders that fail to “clearly and conspicuously” disclose the giver’s material connection to the business. The Rule prohibits such reviews and testimonials given by officers or managers.
It also prohibits a business from disseminating such a testimonial that the business should have known was by an officer, manager, employee, or agent. Finally, the Rule imposes requirements when officers or managers solicit consumer reviews from their own immediate relatives or from employees or agents – or when they tell employees or agents to solicit reviews from relatives and such solicitations result in reviews by immediate relatives of the employees or agents.
Consult with a seasoned FTC Review Rule attorney with respect to such requirements and compliance with the Rule.
- Company-Controlled Review Websites:
The Rule prohibits a business from misrepresenting that a website or entity it controls provides independent reviews or opinions about a category of products or services that includes its own products or services.
The Rule prohibits a business from using unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove a negative consumer review. The Rule also bars a business from misrepresenting that the reviews on a review portion of its website represent all or most of the reviews submitted when reviews have been suppressed based upon their ratings or negative sentiment.
- Misuse of Fake Social Media Indicators:
The Rule prohibits anyone from selling or buying fake indicators of social media influence, such as followers or views generated by a bot or hijacked account. This prohibition is limited to situations in which the buyer knew or should have known that the indicators were fake and misrepresent the buyer’s influence or importance for a commercial purpose.
The Rule was enacted to deter deceptive review and testimonial practices, and strengthen FTC enforcement actions via the imposition of monetary civil penalties for violations thereof.
How the FTC and State AGs are Investigating the Use of Fake Reviews
The FTC is issuing Civil Investigative Demands (CIDs) and Access Letters. A CID is a kind of subpoena – a legal document enforceable in court that seeks documents and other information related to an FTC investigation. An Access letter is a preliminary, non-compulsory request from the FTC asking a company to voluntarily provide documentation and information. An Access Letter often precedes a formal CID or lawsuit.
FTC CIDs and Access Letters investigating the violations of the FTC Consumer Reviews and Testimonials Rule often inquire into whether a company and its principals have engaged in unfair or deceptive acts or practices in connection with consumer reviews in violation of the Rule or Section 5 of the Federal Trade Commission Act.
Areas of inquiry may differ but may generally include;
- Company ownership and the identification of present and former employees, independent contractors, freelancers, or volunteers with involvement in the provision of review management (including dates of service, titles and summary involvement)
- Year by year total net and gross revenues, net profits and gross profits
- Methods used to solicit, procure or otherwise obtain consumer reviews
- Persons or entities responsible for soliciting, procuring, or otherwise obtaining consumer reviews along with a description of respective responsibilities
- Documents relating to solicitations of potential employees, independent contractors, freelancers, volunteers, or others to assist in the performance of review management
- Persons or entities responsible for publicly replying to consumer reviews on consumer review platforms like Google and Yelp
- Whether consumer reviews have been purchased, and if so, the identity and roles of all persons or entities involved in purchasing such reviews
- What platforms reviews appeared, how many reviews were purchased, how many appeared and when such reviews appeared
- Persons or entities from which consumer reviews were purchased, the dates of all purchases and the ways communicated with and paid persons or entities;
- Copies of communications that sold consumer reviews
- Records of payments made to persons or entities
- Applicable contracts or agreements, including agreements with SEO, reputational management and marketing companies for the procurement of consumer review related services
- Copies of consumer reviews that were purchased
- Whether the recipient has written or created consumer reviews and, if so, the identification of all persons that wrote or created reviews, what platforms they used to write or create such consumer reviews and for each such platform, all user names, platform account names, and email addresses used in connection with writing or creating such reviews, the total number of such reviews written or created, copies of consumer reviews written or created, identification of who wrote or created such reviews, what facts were relied upon to describe the experiences depicted in the review, and whether the person depicted in the review as its author was a customer/consumer that paid for and received service
- Whether incentives or payments were offered in exchange for or conditioned on persons writing or creating consumer reviews that were positive or gave a specified star rating (e.g., 5 stars, or 4 or more stars), and if so, a detailed description of the terms of such offers, including, what was offered to prospective reviewers, when it was offered, to whom such offers were made, the ways that the offers were communicated, representative examples of offers and resulting consumer reviews, identification of all persons that wrote consumers reviews in response to such offers, and the date and platform on which each review appeared
- Information relating to complaints concerning consumer reviews
- Lists of names of reviewers with requests to identify the authors, state whether the authors were actual client/customers, describe any relationship (e.g., employee, spouse of employee, or friend of co-owner), provide copies of all communications with the authors, identify the person who wrote and approved the reply if there was a reply to the review on a consumer review platform whether the Company has made threats to any consumer(s), including legal threats, in order to cause a posted negative Consumer Review to be removed or to prevent a negative Consumer Review from being written or posted, and, if so, for each such consumer, the identity of consumers that have been threatened and the nature of and basis for the threats, whether threats were successful in causing a posted negative consumer review to be removed or preventing a negative consumer review from being written or posted, copies of all consumer reviews that were posted by the consumer and for each, whether the review was posted before or after the initial threat, and provide copies of all communications with customers/consumers
- Copies of policies, procedures, forms, memoranda, employee handbooks, and training material concerning consumer reviews and review management
- Copies of all communications with consumer review platforms referring or relating to consumer reviews the platform identified as fake, problematic, or otherwise suspicious
- Copies of documents, including internal or external emails and messages, referring or relating to the purchase of consumer reviews
- Copies of documents relating to the offering of incentives in exchange for, or conditioned, on persons writing or creating consumer reviews that were positive or gave a specified star rating (e.g., 5 stars, or 4 or more stars)
- Copies of documents relating to suspected or known fake consumer reviews (e.g., reviews written or submitted by persons who were not genuine customers of applicable services)
State Attorneys General are issuing subpoenas with similar areas of inquiry relating to the use of fake or false consumer reviews, online review management and offers to compensate customers that change their online reviews and testimonials. The New York Office of the Attorney General primary consumer protection statutes NY General Business Law §§ 349 (deceptive acts or practices) and 350 (false advertising).
What is the Difference Between the FTC Consumer Reviews and Testimonials Rule and the FTC Endorsement Guidelines?
The FTC Consumer Reviews and Testimonials Rule formally prohibits certain practices identified as unfair or deceptive in the updated Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”). The Endorsement guides were released in June 2023.
However, unlike the Endorsement Guides – which are not themselves independently enforceable – violations of the Rule carry direct monetary consequences and violators are subject to civil penalties of more than $50,000, per rule occurrence and consumer redress, injunctive restraints, broad oversight authority and negative publicity.
Importantly, the Endorsement Guides address a broader range of conduct than the Rule. The Endorsement Guides set forth general principles relating to the use of endorsements and testimonials in advertising and reflect the FTC’s administrative interpretation of how Section 5 of the FTC Act – which prohibits “unfair or deceptive acts or practices in or affecting commerce” – applies to the same.
FTC Sent Warning Letters to Companies About Potential Violations of the Review Rule
On December 22, 2025, the Federal Trade Commission announced that staff sent letters to 10 companies, warning them of potential violations of the Rule.
The letters, which were based on consumer complaints and information provided by the companies, are not formal determinations that the recipients have violated the Consumer Review Rule. The letters, however, remind the recipients of their obligations under the Rule, and warn them that Rule violations can result in the filing of a federal lawsuit or other legal action, and civil penalties of up to $53,088 per violation.
Warning letters have served as an early compliance tool and can escalate to formal investigations or enforcement actions if issues remain unresolved.
Contrary to reports, the warning letters do not mark the first major enforcement steps since the Rule’s implementation. The FTC and State Attorneys General have already begun investigating and enforcing the use of fake reviews and testimonials, in earnest.
Takeaway: Companies should closely assess their consumer review, review management, and influencer marketing practices to ensure compliance with applicable legal regulations. To help mitigate potential liability risk under the Rule and other applicable legal regulations, companies may want to consider consulting with an experienced FTC lawyer to audit review practices, eliminate incentivized sentiment, bolster disclosures, audit third-party vendors, and provide compliance training for employees and influencers/agencies.
[View original source at FTC Review Rule Lawyer for additional information and analysis]
