The FTC fake review rule for small businesses
Reviews drive local search, and for years the rules around them were scattered across platform policies and general consumer protection law. Since October 21, 2024, the United States has had a specific federal rule: the Federal Trade Commission's Rule on the Use of Consumer Reviews and Testimonials, 16 CFR Part 465. It lets courts impose civil penalties for knowing violations. Most honest businesses already comply, but a few common habits sit close to the lines, and those are what this guide covers.
This is a practitioner's summary, not legal advice. If you've received a letter from the FTC or a state attorney general, talk to a lawyer.
On this page
What the rule prohibits
The FTC's own question-and-answer page groups the rule into a handful of sections:
- Fake or false reviews and testimonials (section 465.2), including reviews from people who never used the product and reviews that misrepresent the reviewer's experience.
- Paying for reviews of a particular sentiment (465.4). Incentives become a problem when there's an express or implied requirement that the review be positive, or negative about a competitor.
- Undisclosed insider reviews (465.5). Reviews by officers, managers, employees, or agents, and in some cases their relatives, need a clear disclosure of the relationship.
- Company-controlled review sites (465.6) presented as independent.
- Review suppression (465.7), such as legal threats, intimidation, or false accusations used to get reviews removed.
- Fake social media indicators (465.8), like bought followers or views, when the business knew or should have known they were fake.
What you can still do
You can ask every customer for a review. The FTC says the rule exempts generalized requests to purchasers to post reviews about their experiences, and offering an incentive to everyone who responds doesn't change that, as long as the incentive doesn't depend on what the review says.
The incentive question has a second layer. Google's own guidelines for Business Profiles go further than the FTC and prohibit offering incentives for reviews on Google at all. A gift card for every reviewer may be legal under the rule and still get reviews removed or a profile penalized on Google. When the platform's rule is stricter, the platform's rule is the one that governs your listing.
Review gating
Review gating means asking customers how their experience was and sending only the happy ones to Google or Yelp, while routing unhappy ones to a private feedback form. The FTC's guidance says the rule doesn't contain a specific prohibition against asking only customers you expect to be satisfied, and in the same answer it warns that the practice can still violate the FTC Act if it misleads people about how the business is rated. Google's review policy forbids selectively soliciting positive reviews.
My advice is simpler than either text: send the same request to every customer, with one link, and handle complaints in your reply to the review. Many reputation tools still ship with gating switched on by default, so check yours.
Employees and family
Staff and relatives are the easiest source of early reviews and the most common source of trouble. Under the rule, a review by an officer or manager that doesn't disclose the relationship is a problem, and a business that asks employees to write reviews has duties to keep those reviews disclosed. Google, for its part, removes reviews that come from conflicts of interest. The cleanest policy is that employees don't review the business they work for.
Responding to bad reviews
The suppression section targets threats and false accusations meant to get a review taken down. Replying publicly, offering to make things right, and reporting a review to the platform when it breaks the platform's rules are all ordinary practice. Threatening a customer with a lawsuit over an honest negative review, or claiming a review is fake when you know it's real, is where the rule bites.
Testimonials on your own website
The rule covers testimonials too. Quotes on your site should come from real customers, reflect what they said, and not be edited to change the meaning. If you show only your best reviews, don't present the page as a complete or independent rating. When you pay or comp someone for a testimonial, disclose it next to the quote. And never add review star markup for reviews of your own business that you collected and display yourself; Google treats those as self-serving and won't show them.
A compliance checklist
- One review request, sent to every customer, with no screening question in front of the link.
- No incentives for Google reviews; any incentive elsewhere offered to everyone and not tied to sentiment.
- No reviews from owners, staff, or relatives, or a clear disclosure where the platform allows them.
- No bought followers, likes, or views.
- Bad reviews answered in public, reported only for real policy violations.
- Website testimonials sourced, unedited in meaning, and disclosed when compensated.
Questions about reviews and the rule
Does the rule apply to a small local business?
Yes. It applies to businesses of any size that sell to consumers in the United States.
Can I ask a happy customer in person to leave a review?
Yes. Asking is fine. The risk comes from a system that asks only the happy ones and steers everyone else away.
Can I buy reviews from a service that promises they're real?
No. A review written to order by someone who wasn't your customer is a fake review under the rule, whatever the seller calls it.
For honest ways to earn mentions that AI tools and search engines trust, see my guide to earned mentions. Review strategy for local businesses is part of my local SEO work.