Compliance Tips: The FTC’s Final Rule Banning Fake Reviews and Testimonials

The Federal Trade Commission (FTC) has been cracking down on fraudulent online marketing practices in recent years. From greenwashing to undisclosed paid endorsements on social media, the FTC has recently targeted a wide range of practices that it views as being harmful (or at least potentially harmful) to consumers.

Most recently, the FTC has targeted fake reviews and testimonials.

Last year, the FTC published a new Final Rule which it describes as “banning fake reviews and testimonials.” The Final Rule was more than two years in the making; and, as the FTC goes on to explain, it is intended to “combat fake reviews and testimonials by prohibiting their sale or purchase and allow the agency to seek civil penalties against knowing violators.” However, as we discuss below, the prohibition on the sale and purchase of fake reviews is just one aspect of the new Final Rule—and companies that publish consumer reviews and testimonials online must be careful to ensure that they comply with all of the Final Rule’s prohibitions and requirements.

Understanding the FTC’s Definitions of “Consumer Reviews” and “Consumer Testimonials”

Before we discuss the Final Rule’s prohibitions and requirements, we first need to discuss the FTC’s definitions of “consumer reviews” and “consumer testimonials.” Together, these are the focus of the Final Rule; and, for companies that publish reviews and testimonials, it is critical to understand when the rule applies.

The FTC’s Final Rule defines a “consumer review” as:

“[A] consumer’s evaluation, or a purported consumer’s evaluation, of a product, service, or business that is submitted by the consumer or purported consumer and that is published to a website or platform dedicated in whole or in part to receiving and displaying such evaluations.”

Importantly, the Final Rule also provides that “consumer ratings” constitute “consumer reviews” for FTC compliance purposes—even if a rating does not include any text or narrative. While the Final Rule does not provide a clear definition of what constitutes “a platform dedicated in whole or in part to receiving and displaying” customer reviews and ratings, the Final Rule includes several mentions and discussions of social media platforms, and it makes clear that “a business could be subject to civil penalties for social media posts” in appropriate cases.

Another key aspect of the Final Rule’s definition of a “consumer review” is that it includes both evaluations and “purported” evaluations of a company’s products or services. It also includes evaluations submitted by both consumers and “purported” consumers. Thus, not only does the rule apply to actual customer reviews, but it applies to fake customer reviews as well—and this is a central focus of many of the rule’s prohibitions.

Now, what about testimonials? The FTC’s Final Rule defines a “consumer testimonial” as:

“[A]n advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a consumer who has purchased, used, or otherwise had experience with a product, service, or business.”

On its face, this definition appears to overlap with the FTC’s definition of a “consumer review” to a significant extent—and reviews and testimonials serve the same fundamental marketing purpose. As the FTC explains in a set of FAQs, the key difference between these definitions is that while “consumer reviews” are specifically published on websites and other “dedicated” online platforms, “[t]estimonials can appear in a variety of contexts, such as in television or radio ads, on a company website, in Internet ads, or in social media.” However, as discussed above, what constitutes a “dedicated” online platform for consumer reviews is not clearly defined; and, as a result, companies must be careful whenever they publish reviews or testimonials online.

Ultimately, by defining and addressing “consumer reviews” and “consumer testimonials” separately, the FTC is intending to cast a broad net that covers essentially all statements a company publishes that are made (or purportedly made) by the company’s clients or customers. This overarching goal is critical to keep in mind—particularly in light of the FTC’s FAQs, which state that some reviews may also be deemed testimonials, and vice versa.

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6 Key Prohibitions in the FTC’s Consumer Review and Testimonial Rule

With these considerations in mind, we can now examine the core provisions of the FTC’s Final Rule, formally titled the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials. These provisions establish six key prohibitions related to the publication of consumer reviews and testimonials:

1. Fake or False Reviews and Testimonials

Under the Final Rule, it is an unfair or deceptive trade practice to “write, create, or sell” a consumer review or testimonial that materially misrepresents any of the following:

• “That the reviewer or testimonialist exists;”
• “That the review or testimonialist used or otherwise had experience with the product, service, or business that is the subject of the review or testimonial; or,”
• “The reviewer’s or testimonialist’s experience with the product, service or business that is the subject of the review or testimonial.”

As the FTC explained in its press release announcing the new Final Rule, this specifically covers AI-generated reviews and testimonials. It also covers misrepresentative reviews and testimonials from company insiders, as well as those purchased from third parties that do not have direct experience with a company’s products or services.

2. Incentivized Reviews (Buying Positive or Negative Reviews)

The FTC’s Final Rule also specifically prohibits companies from paying for positive reviews—or negative reviews of a competitor’s products or services—when these reviews materially misrepresent the reviewer’s opinion or familiarity with the product or service in question. As the FTC explains in its press release, this provision applies when a company “provid[es] compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment.”

3. Insider Reviews and Testimonials

As noted above, the FTC’s new Final Rule prohibits insider reviews and testimonials that misrepresent insiders’ personal experiences with a company’s products or services. The Final Rule also prohibits insider reviews and testimonials “that fail to clearly and conspicuously disclose the giver’s material connection to the business.” Company insiders include officers, managers, employees, agents, and anyone else with a “material connection.”

The Final Rule states that company insiders may solicit reviews and testimonials from their relatives, provided that these reviews and testimonials accurately reflect their relatives’ opinions and adequately disclose the relationships involved.

4. Company-Controlled Review Websites

Under the FTC’s new Final Rule, it is an unfair or deceptive trade practice for a company to, “materially misrepresent . . . that a website, organization, or entity that it controls, owns, or operates provides independent reviews or opinions . . . about a category of businesses, products, or services including the business or one or more of the products or services it sells.” Effectively, this section of the rule prohibits companies from creating websites that appear to be neutral and/or third-party operated when in fact they are intended for marketing purposes.

5. Review Suppression

The Final Rule also prohibits what the FTC terms “review suppression.” This includes both: (i) using “an unfounded or groundless legal threat, a physical threat, intimidation, or a public false accusation” to attempt to prevent an unfavorable review or have an unfavorable review removed; and, (ii) materially misrepresenting that published reviews “represent most or all the reviews submitted to the website or platform when reviews are being suppressed (i.e., not displayable) based upon their ratings or their negative sentiment.”

6. Fake Social Media Indicators

The last prohibition in the FTC’s new Final Rule makes no mention of consumer reviews or consumer testimonials. Instead, it focuses on “fake indicators of social media influence.” As the FTC explains in its press release, these include indicators such as “followers or views generated by a bot or hijacked account.” Under the Final Rule, it is impermissible to both: (i) “sell or distribute fake indicators of social media influence that [a company] knew or should have known to be fake and that can be used by individuals or businesses to materially misrepresent their influence or importance for a commercial purpose;” and, (ii) “purchase or procure fake indicators of social media influence that [a company] knew or should have known to be fake and that materially misrepresent their influence or importance for a commercial purpose.”

Non-Compliant Reviews and Testimonials Can Expose Companies to Substantial Penalties

Companies that violate the FTC’s rule banning fake reviews and testimonials can face civil monetary penalties (CMP) of $53,088 per violation (as of 2025). The FTC can impose other penalties as well. As a result, companies need to prioritize compliance—and company owners, executives, and in-house lawyers who have questions or concerns about their companies’ obligations should consult with experienced FTC compliance counsel promptly.

Schedule a Consultation with an FTC Compliance Lawyer at Oberheiden P.C.

If you have questions or concerns about the FTC’s new Final Rule banning fake reviews and testimonials, we invite you to get in touch. To schedule a consultation with a senior FTC compliance lawyer at Oberheiden P.C., please call 888-680-1745 or inquire online today.