Roca Labs, Inc., a Florida based business that sells dietary supplements and food products recently got some unwanted attention in the form of a federal complaint filed by the Federal Trade Commission. The case is a warning for what companies ought not do when it comes to online reviews.
Roca managed to get itself in trouble two different ways. The first way had to do with online reviews and testimonials touting the wonders of Roca’s products. As part of its marketing plan, Roca actively solicited customers to provide glowing testimony about the effects of Roca’s products. And the solicitation involved more than a mere plea for support. There was cash involved.
Roca made this offer to its customers:
You can earn money back as a reward for losing weight. Simply document your weight loss from your starting weight to achieving your weight loss goal. Demonstrate your weight loss with smaller size clothing, using the Success Belt or show your body in a clear convincing way. When you achieve your weight loss goal and send us the video, you will receive Money Back Reward or up to $1,000.00 within 10 days conditional and based on:
- You must have passed the 3 stage goal
- Your documented success is inspirational & convincing
- Your claimed weight loss is evident in the “before & after”
Roca even offered some production tips:
In short, to get this reward, film yourself now, during and after you’ve reached your goal. The video should be about 10 minutes long, talk about your past eating problems, the ease 2 of using the Program, how much weight you’ve lost and how your life has changed. You can tell us about improvements in your health, self-esteem, relationships and love life, and even compliments you’ve received about your new look. Your video must be real, convincing and of good quality.
But Roca left out one tip for the video testimonials. It neglected to tell customers to mention that they were being compensated for providing the shout out. According to the FTC, endorsers are required to disclose any type of affiliation or compensation behind an endorsement. Failing to do so may constitute a deceptive act.
And Roca didn’t concern itself only with positive news. It also included package inserts in its shipped products that the customers would not write negative product reviews, and if they did, they’d lose out on any previously promised discounts. Here’s how it looked in real life:
You agree that regardless of your personal experience with RL, you will not disparage RL and/or any of its employees, products or services. This means that you will not speak, publish, cause to be published, print, review, blog, or otherwise write negatively about RL, or its products or employees in any way. This encompasses all forms of media, including and especially the internet. This paragraph is to protect RL and its current and future customers from the harm of libelous or slanderous content in any form, and thus, your acceptance of the [Terms] prohibits you from taking any action that negatively impacts RL, its reputation, products, services, management, or employees...If you breach this Agreement, as determined by RL in its sole discretion, all discounts will be waived and you agree to pay the full price for your product. In addition, we retain all legal rights and remedies against the breaching customer for breach of contract and any other appropriate causes of action.
In this FTC’s view, placing this onerous condition on the discount, after the fact, constitutes a deceptive practice.
We’ll see how the suit plays out. But the FTC’s track record is pretty strong. It’s not clear to me why companies don’t abide by the endorsement guidelines. A little transparency is not a bad thing. And it completely astounds me how some folks take such incredibly heavy handed approaches to negative reviews. That is truly a lose/lose tactic. The negative review stays up, the company looks terrible, and the FTC’s radar goes up. What part of all that sounds like a good idea?