The Federal Trade Commission (FTC) announced a settlement with AmeriFreight “that will halt the company’s allegedly deceptive practice of touting online customer reviews, while failing to disclose that the reviewers were compensated with discounts and incentives.” The FTC settlement on February 27, 2015 with AmeriFreight (an automobile shipment broker based in Peachtree City, Georgia) was for “failing to disclose that they compensated consumers for their online reviews.” The FTC complaint specifically stated that AmeriFreight:
- Provided consumers with a discount of $50 off the cost of AmeriFreight’s services if consumers agreed to review the company’s services online, and increased the cost by $50 if consumers did not agree to write a review;
- Provided consumers with “Conditions for receiving a discount on reviews,” which said that if they leave an online review, they will be automatically entered into a $100 per month “Best Monthly Review Award” for the most creative subject title and “informative content”;
- Contacted consumers after their cars had been shipped to remind them of their obligation to complete a review to receive the “online review discount,” and qualify for the $100 award;
- Failed to disclose the material connection between the company and their consumer endorsers — namely, that AmeriFreight compensated consumers to post online reviews;
- Deceptively represented that its favorable reviews were based on the unbiased reviews of customers.
The term astroturfing was not used by FTC, but indeed this is an example of astroturfing since AmeriFreight admitting that it paid for reviews.