Let’s say you’re shopping for a new credit card or perhaps a new skin care regime.  You go online and do a search like “best travel credit cards” or “best anti-aging eye creams.”  You will almost certainly get a lot of search results driving you to product review sites where you can get recommendations and advice from…whom?  A site, like Wirecutter, with strict editorial controls, that receives affiliate compensation for purchases through product links on the site but whose editorial judgments are otherwise unaffected by compensation?  Or, a site called something like “BeautyReviews.com” run by a company that owns and sells the products it is purportedly independently reviewing? 

In just the last month, two consumer protection organizations, with very different purviews, examined certain practices of product review sites to gauge potential consumer harm. Their conclusions are important and underscore the significance of both transparency and the separation of editorial and advertising objectives in the product review eco-system.

On leap day, the Consumer Financial Protection Bureau issued Circular 2024-01, addressing the issue of whether operators of digital comparison-shopping tools and lead generators  -- the digital intermediaries in the financial marketplace -- can violate the Consumer Financial Protection Act by “preferencing products or services based on financial or other benefits to the operator.” By way of background, the Circular notes that the CFPA prohibits covered entities from engaging in any unfair, deceptive or abuse act of practices.  An act can be considered abusive if it “takes unreasonable advantage” of certain circumstances, including “the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.”  Further, ensuring that consumers can effectively compare and choose among options for consumer financial products and services is “among the core statutory objectives of the CFPB.”

Under this rubric, the Circular states that operators of digital comparison-shopping tools are “covered persons” under the CFPB and that they can “engender reasonable consumer reliance by virtue of playing the role of helping people select providers.”  In other words, they rank, rate and recommend, and provide tools for consumers to evaluate financial products like credit cards. And they often claim that their rankings, ratings and recommendations are objective, independent and based on the interest of the consumer.  Even when they’re not.  And that’s the rub.  When product review sites hold themselves out as independent and acting in consumers’ best interest, but then steer consumers to more expensive or less favorable products because those products will generate more revenue for the review site itself, they are taking unreasonable advantage of consumers.

The Circular sets forth a number of examples of conduct that can be considered “abusive” if the site is taking unreasonable advantage of the consumers’ reasonable reliance on the site to act in their interests. These examples includes dark pattern type design features that steer a consumer to a particular product; featuring a product based on compensation; matching consumers with higher fee products; using steering practices to meet threshold requirements set by the product provider; providing a comparison tool that prompts users to provide information to get matched with the best products based on that information but actually just providing “matches” that maximize the site’s own revenues; and more. 

It is important to remember when considering this list of illustrative abusive practices that consumers’ “reasonable reliance” is an important part of the CFPB’s analysis: that reliance is created when a site explicitly says or implies that it is providing information and tools to maximize the consumers’ objectives in finding the best products and services for themselves.  When sites do that – i.e., claim or imply that they are using their expertise and research to help consumers find the objectively best products  --  they create consumer reliance.  And they take “unreasonable advantage” of that reliance – act abusively -- when they steer those credulous consumers to products and services selected to maximize the review site’s own compensation rather than the consumers’ objectives. 

Does this mean that a product review site can’t accept advertising or post affiliate links?  Or rank and review products?  It does not.  (In fact, the CFPB specifically carved out payments by advertisers for ads that are clearly set apart from the content of the comparison shopping tool, like banner ads and pop-up ads that are visually separate and that are not embedded or intertwined with product rankings and recommendations.) What the Circular makes clear is that the CFPB’s view of product review sites is consistent with that of the FTC and NAD: you can’t pretend to be providing objective recommendations to consumers if your recommendations are in fact governed by your own monetary interests.  

And speaking of NAD, a decision issued last month underscores the organization’s continued interest in product review sites and maintaining their integrity in the digital marketplace. The action, brought by NAD itself in its routine monitoring capacity, involved a product review site, Smarter Reviews.  NAD was concerned that the reviews and ranking of eye creams on the site appeared to be “the product of a dispassionate, independent analysis conducted by an editorial team” but were in fact advertising for the listed products. Even though the site included disclosures that the site was operated by the owner of the products, NAD did not believe that these disclosures cured the misleading message of objectivity created by the ranking and review format of the site.  Accordingly, NAD recommended (as its has in several earlier cases involving other product review sites) that Smarter Reviews discontinue its rankings and review format or modify the site to avoid conveying a message that the rankings and reviews are unbiased and independent.  NAD/CARU Case Reports, Report #7205R (February 2024).