Accused of failing to disclose that it gave cash discounts to customers to post online reviews, AmeriFreight and owner Marius Lehmann agreed to a settlement with the Federal Trade Commission.
The Georgia-based automobile shipment broker’s Web site claimed that the company had “more highly ranked ratings and reviews than any other company in the automotive transport business,” in ads such as: “Google us ‘bbb top rated car shipping.’ You don’t have to believe us, our consumers say it all.”
In its first complaint charging that the defendant violated Section 5 of the Federal Trade Commission Act by failing to disclose that incentives were tied to reviews, the agency said customers were provided with a $50 discount for a review and the chance to win a $100 “Best Monthly Review Award” for most creative subject title and “informative content.” Customers that elected not to write a review were charged an additional $50.
AmeriFreight even contacted customers after their cars had been shipped to remind them about the “online review discount” and the chance to qualify for the award, the FTC said.
A proposed order settling the suit would prohibit future misrepresentations about customer reviews and require clear and prominent disclosures of any material connections with endorsers. In addition, the defendants would be required to maintain records of all advertisements and relevant documents, among other notice requirements, for the life of the 20-year order.
To read the complaint and proposed consent order in In the Matter of AmeriFreight, click here.
Why it matters: “Companies must make it clear when they have paid their customers to write online reviews,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in a statement about the case. “If they fail to do that—as AmeriFreight did—then they’re deceiving consumers, plain and simple.” Advertisers should ensure compliance with the agency’s Guides Concerning the Use of Endorsements and Testimonials, which require that “[w]hen there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.”