The Federal Trace Commission recently settled with three student debt relief companies over charges that they falsely promised to lower or eliminate consumers’ student loans in return for an illegal upfront fee. As part of the settlement, the companies agreed to be permanently banned from the debt relief business and to turn over almost a half million dollars in assets.
One of the ways that the debt relief companies promoted their services was through encouraging consumers to post positive reviews about the companies' services on the Better Business Bureau's website. In order to get them to post the reviews, the companies offered to give consumers a $20 gift card (and later, a check) if they posted a positive review.
They said to consumers, "Now that you have had the chance to experience the service SLAC INC. provides, we would like to hear from you on our BBB page. Unfortunately, the BBB is used by many customers as a tool to negatively respond or give feedback to companies for those who have had counteractive experiences, [sic] especially as this student loan industry matures from its infancy stage. However, with many clients, including yourselves, we hoped [sic] to have reached every expectation [sic] in providing a positive experience, and it is our hope that you can testify to that existence by taking a moment to write a positive review." The companies then told the consumers that they would receive the gift card once the consumer's review was submitted and reviewed.
The FTC said that the companies did not tell consumers that, when posting a review, they were required to disclose that they had been offered an incentive to post it. Moreover, consumers posted reviews on the BBB's website, even though the BBB requires consumers who are posting reviews to certify that they, "have not been offered any incentive or payment originating from the business to write the review." The FTC alleged that, as a result, users of the BBB website saw reviews that were not permitted to be posted by the BBB and also were misled into thinking that these reviews "reflect the independent opinions or experiences of ordinary impartial consumers."
When using consumer endorsements, marketers should comply with the FTC's Endorsement Guides. This case raises several important compliance points:
- If you pay (or otherwise incentivize) a consumer to post a review, you should tell the consumer to disclose that fact -- and then you should make sure that the consumer does, in fact, make a proper disclosure. An important, related point here is that you shouldn't ask consumers to post reviews on sites that don't permit incentivized reviews.
- Regardless of whether a review is incentivized, and no matter what disclosure the consumer uses, the review must still generally reflect the consumer's honest opinions, findings, beliefs, or experiences. That means that you shouldn't ask a consumer to post a positive review, unless that consumer actually has a positive opinion about the product or service.
"in numerous instances the consumer reviews on the BBB website do not reflect the independent opinions or experiences of ordinary impartial consumers"