Online reviews are an important factor influencing customer spending – with an estimated 54% of adults checking online reviews before making a purchase.
A favourable online review of your pub, restaurant or hotel can make you flavour of the month overnight. Conversely, a negative review can leave tables and rooms empty. But have you ever paid for a favourable online review or incentivised a customer to post one? Have you ever posted or paid someone to post a negative review of a competitor.
You should know how the law applies to online advertising reviews and what action you can take against a malicious review.
Customers must be able to trust online advertising if this vital tool is to work effectively for the benefit of both customers and operators. A recent report by the Consumer and Markets Authority (CMA) was commissioned because concerns were being raised over misleading practices which were breaching consumer law.
The Concerns
The main areas of concern highlighted by the report were:
- fake reviews posted online
- negative reviews not being published
- reviews being paid for (advertorials) but this not being made clear to readers
The Law
The Consumer Protection from Unfair Trading Regulations expressly prohibits a business from using advertorials without making it clear that the business has paid for the promotion. The CAP Code – the UK non-broadcast advertising, sales promotion and direct marketing code – also regulates misleading advertisements.
CMA Guidance
As a result of its information gathering exercise earlier in the year the CMA is investigating some companies for potential non-disclosure of paid endorsements. It also published two 60 second guides for businesses on what they need to do to comply with consumer protection law.
Reviews must provide the full picture to consumers and must not mislead them.
The CMA advises businesses:
- not to offer money or gifts to customers to write positive reviews about your business;
- not to pretend to be a customer and write a review about your own business or pay anyone to do this;
- ensure that anyone acting for the business (advertising agencies etc) knows these rules.
In order to ensure that reviews published on your website give customers an accurate picture you should:
- be clear about where reviews come from and how they are checked before publishing;
- publish all reviews, even negative ones, as long as they are genuine;
- explain when reviews might be edited or not published, e.g. if they contain bad language;
- identify any advertising or reviews that have been paid for;
- disclose any commercial relationships with businesses who appear on your site and explain how this might affect the review; and
- have procedures in place to detect and remove fake reviews.
Enforcement
Trading Standards will enforce against minor breaches of the law. They can refer cases to the Advertising Standards Authority who may “name and shame” offenders and in more serious cases businesses can be prosecuted by the OFT with a penalty of a fine or, where directors are held personally liable, they may be sentenced to up to 2 years imprisonment.
ALMR position
The Association of Licensed Multiple Retailers has called for the CMA to go further in regulating online reviews with procedures introduced for detecting and removing unfair or malicious reviews and a formal dispute resolution and complaints procedure.
Further Information
CMA – Online Reviews: giving customers the full picture
CMA – Online Endorsements: being open and honest with your audience – 60 second summary
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