Companies are advised to thoroughly investigate the companies they hire to manage their online reputations and reviews to ensure that only truthful and accurate reviews and comments from actual consumers are posted online. A company that does not thoroughly investigate the companies they use could find themselves in violation of the Federal Trade Commission’s (FTC) Guides Concerning the Use of Endorsements and Testimonials in Advertising (the 'Guides'). The Guides set forth the principles that the FTC uses when evaluating testimonials and endorsements.
The FTC and other regulators recognize that consumer endorsements and testimonials are a powerful selling tool for businesses and that some companies are exploiting that by writing and posting fake online reviews. Recent studies have estimated that almost 20% of Yelp reviews are fake or suspicious and filtered by Yelp’s fraud algorithm. To combat these tactics, regulators are investigating and taking action.