‘Deceptive endorsements’: FTC cracking down on businesses who use fake online reviews

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FILE – This Jan. 28, 2015, file photo, shows the Federal Trade Commission building in Washington. Federal regulators say they are cracking down on “an explosion” of businesses’ use of fake reviews and other misleading messages to promote their products and services on social media. The Federal Trade Commission said, Thursday, Oct. 14, 2021, it has warned hundreds of major corporations and smaller businesses that they could face fines if they use bogus endorsements to deceive consumers. (AP Photo/Alex Brandon, File)

(ABC4) – Amazon, Apple, and YouTube are one of 700 businesses’ that received ‘notices of penalty offenses’ from the FTC in response to an explosion of deceptive endorsements that are occurring across the internet and social media.

Through this notice, the FTC is sending a clear message that if these companies use endorsements to deceive consumers. The FTC will be ready to hold them responsible with a hefty penalty that could run as high as $43,792 per violation, according to press release statement.

The notice that was sent out specifically identifies a number of practices that the FTC deems unfair or deceptive. These include, falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser, and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.

“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Advertisers will pay a price if they engage in these deceptive practices.”

Companies receiving the notice represent a variety of large companies, top advertisers, leading retailers, top consumer product companies, and major advertising agencies. A full list of the businesses receiving the notice from the FTC is available on the FTC’s website. A business shown on this list doesn’t suggest that they’ve engaged in deceptive endorsements.

The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows has been found unlawful in a previous FTC administrative order, other than a consent order.

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