Incentivized Reviews Without Disclosure Get Panned By FTC

In the latest iteration of the Federal Trade Commission's (FTC) approach to testimonials and endorsements in the context of online advertising, the Commission alleged that AmeriFreight, a company that arranges the shipment of consumers' cars through third-party freight carriers and its owner posted customer reviews without disclosing that it had provided a financial incentive for the reviews and for affirmatively representing that the reviews were unbiased. The consent order underscores that incentivized reviews generally must be accompanied by some form of disclosure of the incentive. The order also touches on an aspect in the growing jurisprudence of customer reviews, namely the use of contractual provisions between service companies and customers that restrict the nature of reviews published by those customers. The FTC suggests that any such contractual provision is a material connection that must be disclosed if a resulting review is used in advertising.