FTC issues $250,000 fine for fake online reviews

The Federal Trade Commission took decisive action against a company that paid affiliate marketers to write positive reviews of its product.


The Federal Trade Commission nailed another company for paying for positive reviews online.

Tennessee-based Legacy Learning Systems is staring down a $250,000 fine and other sanctions. Here’s what the company did, according to paidContent.org:

Legacy Learning Systems hired “affiliate marketers to sing the praises of its DVD series by writing glowing reviews on websites. But because those affiliates didn’t disclose they were getting paid for the praise they heaped on the educational DVD series, called ‘Learn and Master Guitar,’ the FTC said the ads were deceptive and illegal.”

In the wake of the ruling, the Public Relations Association of America (PRSA) offered some advice. Marisa Vallbona, a member of the PRSA board of directors, wrote on the blog PRSAY:

“Let’s say your client or employer gives a gift to a blogger and expects a review. Tell—don’t ask—the blogger to disclose the fact in his or her review. Otherwise, you’re asking the review to be considered fake and putting yours and your client’s reputation at stake.”

Vallbona added:

“Isn’t time time for this madness to end? It’s unfortunate that the disreputable work of some continues to cast doubt across an entire industry.”

In 2009, the FTC issued guidelines on how companies and bloggers should approach the messy business of paying for blog coverage or online reviews. Legacy Learning Systems is the third high-profile example of the FTC’s enforcement of the guidelines.

In April 2010, the FTC investigated retailer Ann Taylor, but didn’t issue a fine.

In August 2010, Reverb Communications settled with the FTC over an issue involving fake online reviews.

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