CFPB Follows FTC’s Lead On Consumer Online Reviews – Finance and Banking

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CFPB Follows FTC’s Lead On Consumer Online Reviews

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On March 22, 2022, the Consumer Financial Protection
Bureau announced that it has
issued guidance designed to dissuade financial institutions from
curbing consumers’ rights to post online reviews
Specifically, the CFPB put the industry on notice that it intends
to rely on the Consumer Financial Protection Act’s prohibition
on unfair, deceptive, and abusive acts or practices, or UDAAPs, to
prevent institutions from using contracts or other marketing
practices to interfere with consumers’ ability to post and
access online reviews, increasing risks associated with how
institutions manage online reviews. The announcement follows
the Federal Trade
Commission’s warning last fall
 to 700+ companies that
they could face fines for posting misleading online endorsements,
and heavily cites to prior FTC actions as precedent for the policy

Citing studies showing the importance of online reviews to
increased company revenues, the CFPB’s
 expresses concern about the incentives for
“dishonest market participants” to “manipulate”
the online review process, rather than compete on the value of
their services, which frustrates the competitive marketplace. To
that end, the CFPB identified the following practices that may be
unfair or deceptive:

  • Utilizing contractual “gag” clauses to create the
    impression that consumers are restricted in their ability to
    publish an honest review. The CFPB indicates that using such a
    provision is deceptive because it is unenforceable under
    the Consumer Review Fairness
    . The CFPB also notes that a qualifier indicating the
    restriction is “subject to applicable law” will be
    insufficient to cure the misrepresentation.

  • Pressuring a consumer to remove an already posted negative
    review by invoking unenforceable contractual restrictions.

  • Manipulating which reviews are displayed online (e.g.,
    displaying only positive reviews in a context that suggests they
    represent a comprehensive collection of all reviews about the
    company or its products) or posting fake reviews (e.g., by asking
    employees to post reviews without adequate disclosures of their
    relationships to the institution, or by paying third parties to
    post reviews that are materially misleading or that fail to
    disclose that the reviewer was compensated by the

What does this mean for you?

In light of the CFPB’s announcement, financial services
providers may want to consider:

  • Reviewing consumer agreements to identify language discouraging
    consumers from posting honest reviews.

  • Assessing the way company-owned and third-party websites
    display consumer reviews, along with any associated disclosures
    regarding those reviews.

  • Reviewing and updating existing marketing or social media
    policies to ensure they prohibit online review manipulation, and
    contain clear guidelines for making adequate disclosures when
    engaging in any sponsorship or other paid arrangements, or in any
    relationship whereby the company provides an incentive or special
    benefit to a reviewer or endorser that would not otherwise be
    obvious to the audience reading the review.

Although this most recent announcement was from the CFPB, the
FTC and state attorneys general have their own authority to
prohibit unfair or deceptive practices – and institutions
should be mindful of the increased litigation and enforcement risks
created by the announcement. (For more information, refer to the
FTC’s principal guidance
applicable to the collection and use of reviews, endorsements, and

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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