One advantage of the internet is that it permits users to browse through various reviews about goods and services before engaging with a vendor. However there are growing concerns about this practice both for consumers and businesses, particularly, that non-genuine reviews are misleading consumers and / or causing damage to a vendor’s reputation.
As online business is now so lucrative, companies will go to great lengths to secure custom, from employing third party contractors to leave positive reviews and testimonials on their own sites or possibly negative reviews on competitor sites.
The Advertising Standards Agency (ASA) has only recently ruled in a case about reviews on a well known travel website and held that the reviews were misleading as they could not be substantiated.
What is prohibited under consumer protection legislation?
The Consumer Protection from Unfair Trading Regulations 2008 prohibits unfair commercial practices which, in addition to a general duty not to trade unfairly, also includes a prohibition on misleading consumers through acts (for example, telling a consumer that something needs to be replaced at a greater cost when it can in fact be repaired for less) or omissions (for example, failure to inform the customer about what is not included as part of their purchase) and subjecting consumers to aggressive commercial practices, all of which are likely to cause the average consumer to make a different transactional decision. This relates to both pre-shopping but also after-sales and continues for the lifetime of the product.
In addition there are 31 practices that will always be deemed as unfair including:
- False endorsements, authorisations or quality marks;
- Misleading consumers as to availability, context or effect (for example, stating that a product is available for a limited time only when this is not the case);
- Pyramid schemes;
- Prize draws (where no prizes are awarded);
- Unreasonable and irrelevant demands;
- Creating an impression that a product can be legally sold when in fact it cannot;
- Mislead a consumer into believing that a product is made by a particular manufacturer;
- Persistent and unwanted solicitation;
- Falsely claiming to be a signatory to a code of conduct; and
- Falsely claiming a product is able to cure and illness.
A breach of consumer protection legislation is a serious and sometimes criminal offence. As a result the penalties can be anything from a fine of up to £5,000 (the statutory maximum) and/or up to two years imprisonment.
Who is protected by the legislation and who can bring action under it?
The legislation protects all consumers and action is likely to be brought on a consumer’s behalf by the Office of Fair Trading and the Trading Standards Service. Action cannot be brought by consumers themselves.
The use of third parties to promote goods and services
It is not unlawful for an organisation to use third parties in order to promote its activities, however, where the organisation chooses to do so it must inform consumers that these services have been paid for at the expense of the organisation to ensure that it is not in any way misleading.
Many businesses, in addition to posting reviews on their own websites, will also sign up for 3rd party specialist review sites. In doing so, they should make clear that they are paying for a service for the 3rd party company and whether that 3rd party organisation has any policy not to publish negative reviews and potentially should also check that the 3rd party site promotes fair and impartial pracrti8ces itself and has appropriate measures in place to prevent fraudulent, fake or spam reviews being published. Unfortunately, there does appear to be a growing problem with many review sites, as highlighted by this article.
Where an advertorial is used (an advert that looks like an article) it should be clearly labelled as an advertorial in order to distinguish it from other forms of editorial material. If testimonials are used in the advertorial they must be genuine.
If a business provides for users of its site to leave / read reviews it must be aware of the implications of consumer protection legislation (which prohibits fake reviews) including ensuring that they do not claim that the reviews are from genuine customers.
Failure to comply with these rules could result in the organisation breaching the code of the Committee of Advertising Practice.
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