FTC Settles First Complaint Against Company Accused of Trading Discounts for Good Reviews
The Federal Trade Commission (FTC) has approved a final consent order barring an automobile shipment broker from touting its “highly ranked ratings” without disclosing that consumers were offered a $50 discount to write favorable reviews. According to the agency, the complaint against AmeriFreight is the first time FTC “has charged a company with misrepresenting online reviews by failing to disclose that it gave cash discounts to customers to post the reviews.” See FTC Press Release, February 27, 2015.
FTC apparently flagged AmeriFreight’s website and advertising materials for claiming that the company had “more highly ranked ratings and reviews than any other company in the automotive transportation business.” Consumers were apparently offered $50 discounts in exchange for good reviews, with the opportunity to win $100 if their review was selected for a monthly prize. In addition, the agency claimed that the respondents (i) “contacted consumers after their cars had been shipped to remind them of their obligation to complete a review to receive the ‘online review discount,’ and qualify for the $100 award”; (ii) “failed to disclose the material connection between the company and their consumer endorsers—namely, that AmeriFreight compensated consumers to post online reviews”; and (iii) “deceptively represented that its favorable reviews were based on the unbiased reviews of customers.”
“Companies must make it clear when they have paid their customers to write online reviews,” said FTC Bureau of Consumer Protection Director Jessica Rich. “If they fail to do that—as AmeriFreight did—then they’re deceiving consumers, plain and simple.” See FTC Press Release, April 20, 2015.
Issue 563
