Customer reviews are some of the most persuasive material a business can show, which is exactly why the US Federal Trade Commission (FTC) wrote a dedicated rule about them. This article explains what that rule prohibits, what remains perfectly legitimate, and how a marketing team can check its own practices.
What is the consumer reviews and testimonials rule?
The rule is formally titled the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials. It went into effect on October 21, 2024, according to the FTC. A “trade regulation rule” is different from general guidance: it turns specific practices into clear violations, and courts can impose civil penalties on businesses that break it knowingly.
Before the rule, the FTC had to argue case by case that a misleading review was a deceptive practice under the general FTC Act. The rule names the practices outright, so there is less room to claim that a questionable tactic was a gray area. The FTC’s own question-and-answer guide for businesses is organized by section, and it is the clearest way to see the structure of the rule.
The six practices the rule targets
Each prohibition sits in its own section of the rule. In plain language, based on the FTC’s guide:
| Section | What it covers | Plain-language meaning |
|---|---|---|
| 465.2 | Fake or false reviews | Writing, creating or selling fake reviews or testimonials, including celebrity testimonials, or knowingly using ones that misrepresent the reviewer’s use or experience |
| 465.4 | Buying reviews | Giving compensation or incentives conditioned on a review expressing a particular sentiment, positive or negative |
| 465.5 | Insider reviews | Reviews from insiders must clearly disclose their connection to the business |
| 465.6 | Company-controlled review sites | No pretending that a site you control offers independent opinions |
| 465.7 | Review suppression | No false accusations, intimidation or unfounded legal threats to stop or change reviews |
| 465.8 | Fake social media indicators | No buying or using fake followers or views when you knew or should have known they were fake |
The table compresses the legal text, so treat it as an orientation aid rather than a substitute for the rule itself.
Fake and AI-generated reviews
The first prohibition is the headline one. A business may not write fake reviews, buy them, or pay for them to be produced. The FTC’s guidance confirms that the knowledge standard cuts both ways: a business can be liable if it knew or should have known that a testimonial misrepresented the testimonialist’s use or experience. That matters for anyone who repurposes testimonials in advertising, because featuring a review in a campaign turns it into a testimonial that the business is responsible for.
Can you still offer incentives for reviews?
Yes, with a firm limit. According to the FTC’s guide, giving an incentive for a review is not itself prohibited. What is prohibited is an express or implied requirement that the review take a particular line. A discount for anyone who writes an honest review is different from a discount for anyone who writes five stars.
The FTC’s guide is explicit that offering incentives for five-star reviews is prohibited even if the reviewer is asked to disclose the incentive. A disclosure does not cure a sentiment condition. The guide also notes that consumers who accept payment are not liable under this section; only the business offering it is.
A related point concerns paying people to change or remove truthful negative reviews. The FTC says that practice may still violate the general FTC Act even though it is not a separate rule section.
What counts as review suppression, and what does not?
Suppression is where many teams worry about ordinary housekeeping. The rule bars knowingly or recklessly false accusations against reviewers, intimidation, and unfounded legal threats used to stop or change reviews. A genuine dispute, such as a review about the wrong business, is not the same thing.
The FTC’s guide draws several practical lines:
- Businesses may refuse reviews that are about the wrong business, and may adopt neutral policies on reviews that mention other products.
- Sorting reviews by helpfulness or by star rating is not suppression under the rule.
- Burying negative reviews so they are hard to find may still raise concerns under the FTC Act.
The same guide says the rule has no specific ban on asking only happy customers for reviews, a tactic sometimes called review gating, but that this too may violate the FTC Act. In other words, the absence of a rule section is not a safe harbor. A healthy test is whether a shopper reading your reviews would get an honest picture of customer experience.
Are insiders and influencers covered?
Insiders are covered through the disclosure requirement. Reviews and testimonials from officers, managers, employees or their immediate relatives must clearly and conspicuously disclose the material connection. The FTC’s guide explains that “clear and conspicuous” means unavoidable, and that a disclosure at the start of a post can qualify.
There are practical carve-outs. According to the guide:
- A generalized solicitation sent to all purchasers is exempt, even if an incentive is offered and some respondents turn out to be employees.
- Businesses need not ask every testimonialist whether they are an insider, but they should act on red flags.
- If an officer asks employees to collect reviews from relatives, the business should check those reviews when there are signs of an undisclosed relationship.
Influencers raise a separate question about audience size. The rule on social media indicators applies only when a business knew or should have known the numbers were fake, which requires red flags. The FTC says that hiring an influencer who happens to have fake followers does not, by itself, create liability under the rule, and that an influencer encouraging real followers to follow a business account is not a fake indicator. If you are weighing influencer partnerships, this is a reason to look at engagement quality and not only follower counts. A broader discussion of measurement discipline appears in how to measure marketing without drowning in metrics.
Do review platforms and retailers carry the same risk?
Hosting and marketing are treated differently. According to the FTC’s guide, retailers that merely host reviews are exempt under section 465.2(d), even if they solicit reviews or aggregate star ratings, and a host has no duty to investigate whether reviews are fake.
That exemption has an edge. The same guide says a business can still be liable if it wrote or bought fake reviews, or if it features reviews in its marketing, which turns them into testimonials. A store that shows customer reviews on a product page is hosting. The same store that copies a glowing review into an email campaign is advertising with a testimonial and should be confident it is genuine.
What do penalties and enforcement look like?
The FTC’s guide says courts can impose civil penalties for knowing violations. The agency did not state a dollar amount in that guide, but its December 22, 2025 announcement did. On that date, the FTC said it had sent warning letters to 10 companies and that civil penalties could reach $53,088 per violation. The FTC adds that the letters were not formal determinations that any recipient had violated the rule.
The announcement also listed the conduct of concern: fake reviews, including reviews that misstate whether the reviewer had a positive or negative experience or used the product at all; incentives tied to a particular sentiment; undisclosed reviews by insiders or their immediate relatives; and related issues on company-controlled review sites, suppression, and social media indicators.
A simple illustration shows why “per violation” matters. In a worked example with hypothetical numbers, a business that published 20 reviews found to be non-compliant could, in theory, face a ceiling of 20 × $53,088 = $1,061,760 in civil penalties. That is arithmetic about a maximum, not a prediction of what any court would order, and real outcomes depend on the facts and the court. The point is that exposure scales with volume.
A practical audit for your review program
A marketing team does not need a lawyer’s checklist to find the obvious problems. Start with these questions, drawn from the prohibitions above:
- Who writes our reviews? If any are written by staff, agencies or tools on a customer’s behalf, stop and investigate.
- What do we ask for in exchange? Review requests may offer a thank-you, but the wording must not hint at a rating.
- Do we disclose insiders? Employees and relatives who post must disclose the connection clearly.
- Do we filter requests? Sending review invitations only to customers likely to be happy invites an FTC Act problem even though the rule has no specific ban.
- How do we respond to negative reviews? Disputes about facts are fine; threats and false accusations are not.
- What do we quote in ads? Anything featured in marketing is your testimonial, so check that it reflects a real experience.
- What do our follower counts rest on? Avoid purchased followers or views.
Honest review programs tend to be more resilient anyway. Trust built on real customer voices holds up under scrutiny, a theme explored in content marketing that earns trust. Teams that also run email programs should note that promotional messages carry their own rulebook, covered in the CAN-SPAM guide.
Reviews are evidence, so treat them like evidence
The rule’s logic is simple: a review is only useful to a shopper if it reflects a real experience. Each prohibition protects that idea from a different angle, whether through fabrication, paid sentiment, hidden relationships, controlled sites, suppression or inflated popularity.
For marketers, the practical message is that asking for reviews, responding to them and showcasing them are all still allowed. What changed is how clearly the lines are drawn. Teams that document how they collect reviews, avoid steering sentiment and disclose connections will be well placed whatever rules develop next.
This article offers general information, not legal advice. Consult a qualified attorney about how consumer protection rules apply to your business.
Sources: Federal Trade Commission
