No shortcuts to five stars: Lessons from the FTC’s settlement with Sitejabber

For some events business owners may face, an immediate response is key to a positive outcome. Think dealing with medical emergencies, fires, and data breaches. And then there are other things where a slow, deliberate approach yields better results. Hiring a new executive. Locating perfect office space. Applying for grants. Today’s settlement with Sitejabber is a reminder of another task businesses should keep on that slow-and-steady list: building your brand through non-misleading customer reviews.

The FTC’s case against GGL Projects, Inc., operating as Sitejabber, involves two tools the company marketed to businesses as ways to collect “an unprecedented volume of positive feedback” from customers. The problem? The tools in question collected ratings and reviews from people the minute they bought a product or service, before they ever had a chance to use it. Then, according to the FTC’s complaint, Sitejabber displayed those reviews and ratings to prospective customers on its website and in paid Google search results without clarifying that they came from people with no experience using the products or services advertised. Sitejabber also gave business clients widgets they could display on their websites to highlight these reviews and ratings.

To make this more concrete, the complaint describes an online furniture retailer with a Sitejabber profile showing 83,154 reviews, with an average rating of 4.72 stars. Well, it turns out over 98% of those reviews and ratings were given at point-of-sale by people who hadn’t actually used the products in question. When you removed those ratings, the FTC says the business’s average dropped to 2.19 stars. That’s a big difference that would probably matter to someone deciding whether to buy that business’s products.

Sitejabber’s practices, the FTC says, likely misled consumers and violated the FTC Act. To resolve the case, the company agreed to clean up its act and stop making or helping others make deceptive claims about ratings or reviews.

What are the lessons for businesses?

• Take your time to collect truthful reviews from bona fide customers. People rely on reviews when choosing to buy a product or service. If your product is new to the market, you may be tempted to seek out services to help you build up positive reviews as quickly as possible. Don’t take shortcuts to five stars. Collecting reviews and building your business’s reputation takes time. Creating, buying, or selling fake reviews could run afoul of the FTC’s Rule on the Use of Consumer Reviews and Testimonials, and violations can cost you. And, even if your shortcut of choice falls outside the rule – as in this case – the FTC may still sue you for violating the FTC Act.
• When it comes to reviews, don’t mislead your customers. When people see customer reviews on your website, unless you say otherwise, they’re going to assume those reviews are coming from people who have purchased and tried your product or service. If that’s not true, you need to make it clear.
• Platforms can violate the FTC Act. Businesses misrepresenting information that matters to people when choosing to buy a product or service violate the FTC Act. This includes platforms like Sitejabber when they make their own misrepresentations about third-party products or services.