On March 22, 2022, the CFPB issued policy guidance regarding potentially illegal practices related to consumer reviews. Through the guidance, the CFPB aims to ensure that customers can write reviews, including those posted online, about financial products and services that accurately reflect their opinions and experiences. The guidance also emphasized that practices such as posting fake reviews or inserting clauses that forbid a customer from publishing an honest review may violate the Consumer Financial Protection Act.
From CFPB Director Rohit Chopra’s statement:
“In America, no corporation should be able to silence a customer from posting an honest review online. Corporate disinformation campaigns that suppress legitimate reviews or manufacture fake reviews are not only a threat to free speech and fair competition, they are also illegal.”
The CFPB believes that customer reviews are an important way to promote competitive markets. Thus, if reviews are unreliable, it might reduce the incentive for companies to provide quality service.
In relation to the Federal Trade Commission’s efforts to prevent fake reviews and related fraud across the digital economy, the CFPB issued policy guidance which describes practices related to customer reviews that are generally unlawful under the Consumer Financial Protection Act. These include:
Contractual ‘Gag’ Clauses: Attempting to prevent consumers from posting an online review can negatively affect fair competition. Including clauses in form contracts that forbid a consumer from posting an honest review may be considered an unfair or deceptive practice.
Fake Reviews: Markets can be harmed if consumers cannot trust that online reviews are legitimate. The use of fake reviews to improve the company's ratings in ways that seem completely independent from the company is a deceptive practice.
Review Suppression or Manipulation: Businesses that limit or manipulate reviews in order to trick or confuse consumers make it harder for consumers to shop and compare products and services. The guidance explains why these practices may be unlawful.
According to the CFPB, financial companies will face consequences for illegally manipulating or suppressing consumer reviews.
Read the CFPB’s press release here.
The Bulletin on Unfair and Deceptive Acts or Practices That Impede Consumer Reviews ca be found here.
