The U.S. Federal Trade Commission (FTC) has passed a Final Rule specifically targeting the use of fake or false reviews and testimonials. While an FTC press release announcing the rule states that it will allow the Commission to “combat fake reviews and testimonials by prohibiting their sale or purchase,” the Final Rule also goes further—imposing penalties for companies that generate and publish fake reviews and testimonials as well.
The spread of false consumer reviews has been a priority enforcement area for the FTC for several years. The FTC has repeatedly expressed concern about the proliferation of false and misleading consumer advertising online—including on company websites, in search results, and in social media posts. With its new Final Rule, the FTC can now specifically target the use and sale of false reviews and fake testimonials (among other deceptive practices), and it can impose substantial fines for violators.
Fake Customer Testimonials and Reviews: What is Prohibited?
The FTC’s Final Rule on fake customer testimonials identifies six distinct practices as “unfair or deceptive acts or practices” under Section 5(a) of the Federal Trade Commission Act (FTC Act), under which the FTC can seek civil penalties. Violating Section 5(a) of the FTC Act can expose companies and individuals to civil fines of $53,088 per violation (as of 2025). While violations of Section 5(a) won’t ordinarily expose companies and individuals to criminal prosecution, the FTC’s Criminal Liaison Unit will work with the U.S. Department of Justice (DOJ) to pursue criminal charges when warranted.
So, what does the FTC’s new Final Rule prohibit?
Fake Consumer Reviews and Testimonials
As the FTC explains in its press release, the new Final Rule, “addresses reviews and testimonials that misrepresent that they are by someone who does not exist, such as AI-generated fake reviews, or who did not have actual experience with the business or its products or services, or that misrepresent the experience of the person giving it.” The Final Rule itself states that it is an unfair or deceptive act or practice for a company to “write, create, or sell” a customer review or testimonial that is not based on a genuine review from a legitimate customer or that does not reflect a customer’s legitimate opinion.
Fake Celebrity Testimonials
The FTC’s new Final Rule also prohibits fake celebrity testimonials. The Final Rule defines a celebrity testimonial as, “an advertising or promotional message . . . that consumers are likely to believe reflects the opinions, beliefs, or experiences of a well-known individual who purchased, used, or otherwise had experience with a product, service, or business.”
Paying for Positive Reviews
The FTC’s new Final Rule prohibits companies from offering incentivized reviews–that is, “providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment.” In other words, it prohibits companies from paying for positive feedback. To trigger enforcement under the new Final Rule, such reviews must “materially misrepresent[], expressly or by indication,” either: (i) that the reviewer exists; (ii) that the reviewer has experience with the company or its product or service; or, (iii) that the review’s experience with the company or its product or service was positive.
Paying for Negative Reviews
Since the FTC’s new Final Rule prohibits companies from paying for reviews that “express[] a particular sentiment,” this means that it is a violation to pay for negative consumer reviews as well. The FTC makes this clear in its press release, stating that companies can face penalties under the New Rule for “buying positive or negative reviews.” Notably, the Final Rule also addresses companies’ efforts to get customers to modify or take down legitimate negative reviews—to an extent. As the FTC explains in a series of FAQs accompanying the Final Rule, it does not prohibit, “offering incentives to consumers for taking down their negative reviews . . . but offering such incentives could be an unfair practice in violation of the FTC Act.”
Misleading “Insider” Reviews and Testimonials
In addition to prohibiting companies from posting fake reviews and paying for fake third-party customer testimonials, the FTC’s new Final Rule also prohibits companies from publishing misleading “insider” reviews and testimonials. As the FTC explains:
“The final rule prohibits certain reviews and testimonials written by company insiders that fail to clearly and conspicuously disclose the giver’s material connection to the business. . . . [It also] imposes requirements when officers or managers solicit consumer reviews from their own immediate relatives or from employees or agents – or when they tell employees or agents to solicit reviews from relatives . . . .”
If we look at the language of the Final Rule itself, it is clear that this prohibition applies to “insider” reviews that either: (i) materially misrepresent the existence of the reviewer or the reviewer’s experience (or lack thereof) with the company’s product or service; or, (ii) “fail[] to have a clear and conspicuous disclosure of the [insider’s] material relationship to the business, unless, in the case of a consumer testimonial, the relationship is otherwise clear to the audience.”
Misleading Company-Controlled Review Websites
The FTC’s new Final Rule prohibits businesses from, “misrepresenting that a website or entity it controls provides independent reviews or opinions about a category of products or services that includes its own products or services.” The Final Rule refers to these as “company-controlled review websites.” Here too, the Final Rule’s prohibitions apply to misrepresentations made both “expressly” and “by implication.”
Negative Review Suppression
Along with prohibiting companies from paying for negative reviews targeting their competitors, the FTC’s new Final Rule also addresses companies’ efforts aimed at suppressing reviews from their clients or customers. The Final Rule states that it is an unfair or deceptive act or practice to, “use an unfounded or groundless legal threat, a physical threat, intimidation, or a public false accusation,” to attempt to get a client or customer to change or delete a negative review.
Misrepresenting the Absence of Negative Reviews
When companies publish reviews, they are prohibited from displaying only positive reviews and suppressing negative reviews or misrepresenting their absence under the FTC’s new Final Rule. Specifically, it is a violation of the Final Rule (and the FTC Act), “for a business to materially misrepresent, expressly or by implication, that . . . consumer reviews . . . represent most or all the reviews submitted . . . when reviews are being suppressed (i.e., not displayable) based upon their ratings or their negative sentiment.”
Misuse of “Fake Indicators of Social Media Influence”
Finally, among the key provisions of the FTC’s new Final Rule on fake reviews and testimonials is a prohibition against the use of “fake indicators of social media influence.” Fake social media indicators are defined as, “indicators of social media influence generated by bots, purported individual accounts not associated with a real individual, accounts created with a real individual’s personal information without their consent, or hijacked accounts, or that otherwise do not reflect a real individual’s or entity’s activities, opinions, findings, or experiences.”
For the Final Rule’s prohibitions to apply, a company must know (or have reason to know) that a social media indicator is fake. Given the prevalence of fake social media accounts and testimonials, the “reason to know” standard may create a high bar for companies that use social media marketing strategies involving paid followers and engagement. Ultimately, however, we will have to see how the FTC approaches enforcement of this provision of the new Final Rule in the years to come.
When Can FTC Violations Lead to Criminal Charges?
It is important to note that the FTC’s new Final Rule on fake reviews and testimonials provides exclusively for the imposition of civil penalties—and, as a general principle, the FTC does not have criminal enforcement authority on its own. However, as noted above, the FTC’s Criminal Liaison Unit will work with the DOJ to pursue criminal charges in appropriate cases.
Criminal charges are most likely when there is evidence of a substantial attempt to intentionally defraud consumers. In these cases, prosecutors at the DOJ may be able to pursue charges under the federal wire fraud statute, among other federal criminal laws. While the specific “elements” of a federal wire fraud charge vary between federal jurisdictions, generally speaking, to substantiate a charge for wire fraud DOJ prosecutors must be able to prove that a company or individual:
- Intentionally or willfully devised or participated in a scheme to defraud;
- Intended to use the scheme to defraud; and,
- Used interstate wire communications (i.e., the Internet) when devising, participating in, or executing the scheme.
Under the federal wire fraud statute (18 U.S.C. Section 1343), companies convicted of a federal offense can face up to a $500,000 fine, while convicted individuals can face up to a $250,000 fine and 20 years of federal imprisonment. If the DOJ pursues other charges as well, as will often be the case, the risks involved in facing prosecution can be even greater. This makes it essential to engage experienced FTC defense counsel as soon as possible.
Speak with a Senior FTC Defense Lawyer at The Criminal Defense Firm in Confidence
At The Criminal Defense Firm, we represent companies and individuals in all FTC-related enforcement matters–including those involving online reviews. This includes both civil FTC enforcement actions and criminal prosecutions led by the DOJ. If you or your company is facing scrutiny from the FTC related to its use of online customer reviews or testimonials, we encourage you to promptly call 866-603-4540 or contact us online for a confidential consultation.
Brian Kuester offers his extensive experience to counsel companies and individuals under civil or criminal government investigation. When resolution requires litigation, clients choose Mr. Kuester’s proven court and litigation experience.