NCL urges FTC to prohibit user review manipulation

January 10, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

WASHINGTON DC. – The National Consumers League (NCL) this week filed comments in support of a Federal Trade Commission (FTC) regulation to ensure the reliability of user reviews. In its comments, NCL urged the FTC to prohibit user reviews from individuals who did not purchase a product or service (or are misrepresenting their experiences with a product or service) and to prohibit sellers from manipulating consumer reviews. In addition, the League advocated for the Commission to require hosts of user reviews to implement measures to protect review integrity, such as requiring purchase verification.  

“Consumers frequently cite user reviews as a key factor when deciding what to buy,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “As a result, fake endorsements steer billions of dollars each year towards certain products and away from competitors. The impacts range from buyers receiving goods of poorer quality than expected to serious safety risks.” 

NCL also encouraged the FTC to prohibit the commercial exploitation of social media engagement metrics, such as buying and selling likes, comments, or shares. Such practices can be used to boost fraudulent product reviews and endorsements, allowing bad actors to manipulate social media platforms to broaden their reach. 

“Right now, it is extremely easy to spend a few dollars and receive hundreds of likes, followers, or other signals that a product or service is of high quality,” said Eden Iscil, NCL Public Policy Manager. “By jumpstarting a post with purchased engagement, the content has a greater chance of reaching a real audience—and being believed by them. Such practices not only affect consumers making purchasing decisions but can also be used to spread other types of misinformation.” 

The FTC initiated this regulatory process following NCL’s request for greater federal enforcement against organized user review fraud, which can be found here 

NCL’s full comments to the FTC can be found here. 

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit https://nclnet.org.

NCL supports FTC efforts to ban non-compete clauses

January 6, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

WASHINGTON DC. – The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy organization, applauds the Federal Trade Commission’s (FTC) initiative to ban non-compete clauses. Such provisions prevent employees from taking new jobs in the same industry, violating free-market values and dampening fair competition. 

The following statement is attributable to NCL Chief Executive Officer, Sally Greenberg: 

“Non-compete clauses harm workers by blocking them from seeking better wages and working conditions. They also reduce market competition by barring other businesses from attracting talent and stopping employees from setting up their own shops. The FTC’s proposed ban on non-compete clauses is a significant step towards a more fair and free economy for all.

Allowing the unrestricted movement of labor will benefit consumers in addition to workers and competitive businesses. NCL has long believed that consumers stand to gain when purchasing goods and services provided by a healthy and robust workforce. We look forward to supporting the FTC’s efforts to prohibit non-compete clauses across the country.”

The FTC estimates that once its ban on non-compete clauses goes into effect, workers earnings would increase by nearly $300 billion per year, creating new opportunities for approximately 30 million individuals. Furthermore, these unjust clauses harm all incomes groups, with a 2019 report finding that 29% of workplaces offering an average hourly pay under $13.00 were subjecting their employees to a non-compete agreement. 

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit https://nclnet.org.

Consumer and industry groups call on agencies to crack down on user review fraud

October 11, 2022

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, (202) 207-2832

Washington D.C.— A coalition of consumer advocacy and industry organizations is calling on the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to do more to crack down on organized user review fraud. In a letter to FTC Chair Lina Khan and Attorney General Merrick Garland, the groups stressed that the trustworthiness of user reviews is a critical factor in consumers’ purchasing decisions and for businesses’ reputations.

While fraudulent reviews are not new, organized rings of review brokers coordinating the placement hundreds or even thousands of fraudulent reviews for products on popular marketplaces and e-commerce websites are a growing problem. These operations sell positive reviews to sellers of substandard products, resulting in consumers purchasing poor quality or even unsafe products and services. Honest sellers, including small businesses, are harmed when they lose sales to dishonest competitors who purchase reviews.

Fraudulent reviews cost consumers an estimated $152 billion globally in 2021, with $28 billion in losses from the U.S. economy alone. Additionally, researchers found that by deceiving buyers into purchasing lower quality and potentially unsafe products, fake reviews lead to $0.12 of consumer welfare lost for every $1 spent online.

Earlier this year, the Federal Trade Commission brought suit against Roomster, a rental listing platform that allegedly deceived consumers by buying fake reviews and charging for access to fraudulent listings. The FTC’s suit also targeted a review broker who organized the sale of tens of thousands of fake reviews to Roomster. The groups’ letter urged the FTC and DOJ to increase the resources devoted to fighting such scams to hold the purveyors of organized review fraud accountable.

“User reviews are a critical part of the purchasing process for millions of consumers every day,” said Sally Greenberg, Executive Director of the National Consumers League, which organized the coalition. “While the FTC and DOJ have taken some steps to crack down on brokers who profit off of fake reviews, more needs to be done if we are to safeguard the trustworthiness of reviews.”

“Online reviews provide great value to small brands as they are the great equalizer when customers are considering buying new products or patronizing new businesses,” said Rob Retzlaff, Executive Director of the Connected Commerce Council. “Fake reviews undermine trust in the entire e-commerce industry, and the FTC and DOJ should do everything in their power to crack down on those abusing the system.”

“Consumers have come to rely on online reviews to distinguish a valuable product or service from a waste of time and money. If fraudulent reviews become rampant online, they risk ruining a sizable portion of online purchases, “said Ruth Susswein, Consumer Action’s Director of Consumer Protection. “We need to rein in online fake review brokers.”

“It’s crucial that consumers have faith in brands,” said Maura Regan, president of Licensing International. “Counterfeiting and fraudulent reviews go straight to the heart of the global licensing industry because a lack of trust hurts all businesses across every category and on every platform.”

The letter to the FTC and DOJ was signed by the Center for Data Innovation, Chamber of Progress, Consumer Action, Connected Commerce Council, Licensing International, National Consumer Law Center (on behalf of its low-income clients), National Consumers League, National Restaurant Association, TechNet, and Women in Toys, Licensing & Entertainment/W I T Foundation.

To view the full letter, click here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit https://nclnet.org.