This article originally appeared in the August 2023 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
In the old days, if you wanted to know whether a product was worth buying, you asked around. As technology developed, customers could post and read online reviews. Large retailers like Amazon, for example, offer online customer reviews for every product they offer to help prospective purchasers make informed decisions; however, this also presumes that the reviews are not fake or contrived.
Many years ago, I purchased my first wireless speaker. In the early days, customer reviews of the product were predominantly favorable; however, after several years, the company abandoned support for its old app and speakers, and in turn, the customer experience changed – particularly for legacy customers like me. Online reviews went from mostly good to mostly bad; however, what was curious (and remains curious), is that the overall numerical rating for the product never changed, staying at 4.7 out of 5.0 stars, despite bad review after bad review.
It occurred to me that maybe the customer review process is flawed. How could a product that abandoned its legacy customers and engendered such anger and disappointment maintain the same favorable rating? I do not mean to suggest that the company did anything illegal, but I am not naïve enough to think the company played no role in cultivating its own reviews…as many companies do.
Now, the law may have something to say about it.
In late June 2023, the Federal Trade Commission proposed a new rule to stop companies from using fake reviews, suppressing honest negative reviews, and paying for positive reviews.
While the proposed rule is not specific to the security industry, like most businesses, security companies rely on customer reviews to support and grow their businesses; thus, it would surely apply if enacted.
The proposed rule would prohibit the following:
- Selling or obtaining fake consumer reviews and testimonials: This covers writing or selling consumer reviews or testimonials by someone who does not exist, who did not have experience with the product or service, or who misrepresented their experiences. It also holds the company accountable if it knew or should have known that reviews were fake or false.
- Review hijacking: Using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product.
- Buying positive or negative reviews: No compensation or other incentives can be offered conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative.
- Insider reviews and consumer testimonials: Reviews or testimonials of a company’s products or services written by a company’s officers, managers or other insiders (or even relatives) without clearly disclosing their relationships.
- Company-controlled review websites: Creating or controlling a website that claims to provide independent opinions about a category of products or services that includes its own products or services.
- Illegal review suppression: Using unjustified legal threats, other intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule also would bar a business from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been suppressed.
- Selling fake social media indicators: This covers false indicators of social media influence, such as fake followers or views.
The Potential Impact
The proposed rule could lead to monetary penalties for violators. It could also lay a foundation for private lawsuits – enabling consumers to claim that a violation of the rule vests in them a claim for money damages (and maybe even a class action).
Can security companies cultivate their own reviews and mitigate negative ones? What responsibility do security companies have to remove reviews that they know are fake or false? Are the stakes higher for security companies – given the life safety implications for their products?
Truth and transparency in the consumer review process should be your guide. If your business is inappropriately meddling in consumer reviews, there could be legal liability whether this proposed FTC rule is enacted or not. The proposal simply makes it easier for the FTC to impose penalties on violators. That should benefit consumers who want to trust what we read – whether we are purchasing a security system or speakers.
Timothy J. Pastore, Esq., is a Partner in the New York office of Montgomery McCracken Walker & Rhoads LLP (www.mmwr.com), where he is Vice-Chair of the Litigation Department. Before entering private practice, Mr. Pastore was an officer and Judge Advocate General (JAG) in the U.S. Air Force and a Special Assistant U.S. Attorney with the U.S. Department of Justice. Reach him at (212) 551-7707 or by e-mail at [email protected].
