What multi-location brands need to know about the FTC’s proposed ban on fake reviews

When it comes to multi-location reputation management, online reviews are imperative to growing a business, driving ROI, and building consumer trust. To better understand how consumers use online reviews, Chatmeter initiated a survey in March of 2023 and found that a staggering 88% of respondents use online reviews to evaluate product and service quality. But the question for consumers that looms over the review content they read is, “How do I know if these reviews are legit?”

Whether it be the suspiciousness of multiple 5-star reviews without any comments on Amazon, or the seemingly always empty neighborhood restaurant with loads of current reviews on Yelp, consumers have reason to be wary. 

The Federal Trade Commission (FTC) is keeping a close eye on growing concerns over fake online reviews and strives to crack down on the issue before it becomes too difficult to manage, especially with growing technologies such as generative AI. As stated in the commission’s proposal, the FTC is understandably concerned about “the widespread emergence of AI chatbots making it easier for bad actors to write fake reviews”. 

FTC means serious business when it comes to fake reviews

The FTC’s ban on fake reviews puts regulations in place around a multitude of bogus review types and the companies taking advantage of them, including:

• Companies buying/selling reviews, as well as fake followers and views on social media platforms
• Reviews from employees, or their family members, that do not disclose the relationship with the business reviewed
• Repurposing positive reviews from other products/services, also known as “review hijacking”
• Company-controlled review websites, recommending their products/services over others
• Organizations attempting to suppress negative reviews through intimidation or other means

In 2019 the FTC brought its first case against Cure Encapsulations, challenging the brand’s use of fake paid reviews. The FTC alleged that the company made false claims about their weight loss drug and paid a third-party website to write and post fake reviews on Amazon. The case resulted in Cure Encapsulation being required to send emails notifying their customers of the deception, and Amazon shutting down the company’s ability to sell its products on its platform. This case became the catalyst for sites like Amazon, Google, Yelp, Facebook (Meta), and others to implement more serious policies and moderation of fictitious reviews.

5 strategies for generating great reviews & using AI for good

While the majority of brands handle their social media and review management responsibly, it’s important to take the FTC’s proposed oversight of reputation management seriously. With the right approach, reputation management platform, and team, acquiring more positive customer reviews, and navigating tougher ones, becomes less daunting. 

Here are some strategies to help generate positive reviews, and utilize AI for good:

• Deliver great products, services, and customer service: It may go without saying, (but we’re going to say it anyway,) the foundation of positive reviews is offering high-quality products or exceptional services. And nothing can beat a great customer service experience. If customers are genuinely happy with what a business provides, they’re more likely to leave positive feedback.

• Encourage satisfied customers to leave reviews: Nowadays, opportunities for a customer to leave a review are vast. Whether adding a QR code to a purchase receipt or guiding the customer to a review site after purchasing a product, setting the customer up with an easy way to leave a review makes all the difference. Some other options are email, social media, or even asking the customer politely at the end of a service.

• Monitor and respond to reviews: With so many sites available for customers to leave a review, the best way to monitor reviews is with a reputation management platform. Chatmeter’s platform provides the added benefit of utilizing generative AI. Responding to reviews and curating social posts is a cinch with the help of AI Generator. 

• Share your story on social media and beyond: Engage with your customers on social media platforms, websites, and marketing materials. Share positive experiences, testimonials, or stories. This not only encourages them to leave reviews but also demonstrates your appreciation for their business.

• Drill into real-time data for actionable insights: Figure out what makes customers tick. With Chatmeter’s AI-powered solutions, unstructured data changed into structured, real-time, actionable insights. Regularly analyzing customer feedback helps to see what detractors may be saying, and gain a better sense of customer sentiment. Using this feedback enhances products, services, and customer experiences.

There’s no doubt that the prevalence of fake reviews is detrimental. Although the FTC does not have a clear course of action regarding the ban’s implementation, brand managers must take the proposed regulations to heart or potentially face serious repercussions in the future. Included in the FTC’s proposal, businesses procuring disingenuous reviews could face a fine of up to $50,000 each time a fake review is read-  that’s a hefty fine for any organization! 

If businesses stay true to providing great products, services, and customer experiences, there’s little worry when it comes to these bans. As for any negative reviews, an engaged, diligent, and empathetic team using a great reputation management platform helps ensure a not-so-great experience can turn into a positive one.