The FTC Ban on Fake Reviews and the Use of Bots: Implications for Small Businesses

August 26, 2024
  • The FTC has banned fake reviews and the use of bots to ensure transparency in online reviews, requiring businesses to disclose any material connections with reviewers.
  • New guidelines prohibit businesses from posting false or misleading reviews and mandate that incentivized reviews must be clearly disclosed to consumers.
  • These regulations aim to protect consumers from fraud and foster a fairer digital marketplace, benefiting both consumers and honest businesses.
  • Small businesses can thrive by focusing on genuine customer feedback, engaging with their audience, and sharing authentic customer-generated content to build trust and credibility.



689 words ~ 3.5 min. read


The Federal Trade Commission (FTC) has made an important move to ensure transparency and honesty in online reviews by banning deceptive practices that manipulate consumer opinions. This ban focuses on fake reviews and the use of bots to create false endorsements, requiring businesses to disclose any material connections with the reviewers. As small businesses increasingly use social media for marketing, this regulation will significantly impact their operations.


The FTC has banned fake reviews and the use of bots to tackle concerns about consumer deception and the loss of trust in online marketplaces. As e-commerce and digital marketing grow, misleading reviews can skew consumer perceptions and lead to poor purchasing decisions. This regulation aims to protect consumers from fraud that can hurt their interests and damage the reputation of honest businesses. The ultimate goal is to create a fairer and more transparent digital marketplace, where genuine feedback and honest endorsements can flourish, benefiting consumers and reputable businesses alike.


What the Rules Entail

Under the new FTC guidelines, businesses can't post reviews or testimonials they know are false or misleading. If they hire third parties to generate reviews, those reviews must also follow FTC standards. If a review is incentivized—like when someone is paid or given free products—the business must clearly disclose this to consumers. Not following these rules can result in hefty penalties, including fines and damage to reputation.

All five FTC commissioners unanimously approved the final rule, which will go into effect 60 days after it's published in the Federal Register, the official government source for rules and notifications. Generally, these rules are published shortly after approval, so consumers should expect the FTC's fake-review ban to start in mid-October.


Impact on Small Businesses Using Social Media

The new FTC regulations help small business owners by encouraging honest competition, which allows them to build credibility and attract customers more effectively on social media. With the ban on fake reviews, businesses should focus on getting genuine customer feedback and creating a loyal community around their brand. This transparency can boost trust and credibility, helping to draw in more customers in the competitive digital landscape. Adjusting marketing strategies to follow these regulations will enable small businesses to succeed authentically instead of relying on misleading practices.


Three Ways to Build an Honest Following

  1. Encourage Real Customer Testimonials: Small businesses should ask happy customers to share their experiences on social media and review sites. Reviews listed on your Google Business Profile are one of the most reliable and powerful places to send your loyal fans. This can be done through follow-up emails after a purchase, prompting customers to leave feedback. Highlighting these genuine testimonials boosts credibility and shows a commitment to customer satisfaction, which can attract future customers.
  2. Engage with Customers Quickly: It's important for small businesses to actively engage with customers on social media to build loyalty. They should respond promptly to comments, messages, and reviews, whether they are positive or negative. By acknowledging feedback and showing a willingness to address concerns, businesses can create a sense of community and trust. This interaction signals to potential customers that the business values their opinions and is committed to providing a good experience.
  3. Share Customer-Generated Content: Encouraging customers to share their own content, like photos and stories featuring the brand's products, adds authenticity and helps to grow an engaged following. Small businesses can create unique hashtags and run campaigns to motivate users to post their content. By sharing this customer-generated content on their own channels, businesses can showcase real customers enjoying their products and strengthen the sense of community among followers.


The Takeaway

The recent FTC regulations are a vital step toward fostering a more honest and transparent online marketplace. By promoting genuine customer feedback and discouraging misleading practices, these guidelines protect consumers and support small businesses in a digital world that values authenticity. As entrepreneurs adapt their marketing strategies to comply with these new rules, they can strengthen customer connections, enhance their reputations, and contribute to a fairer online environment built on trust. Embracing this change will enable businesses to thrive by focusing on real relationships and delivering genuine value to their communities.

 

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The Leavenworth-Lansing Area Chamber of Commerce is a private non-profit organization that aims to support the growth and development of local businesses and our regional economy. We strive to create content that not only educates but also fosters a sense of connection and collaboration among our readers. Join us as we explore topics such as economic development, networking opportunities, upcoming events, and success stories from our vibrant community. Our resources provide insights, advice, and news that are relevant to business owners, entrepreneurs, and community members alike. The Chamber has been granted license to publish this content provided by Chamber Today, a service of ChamberThink Strategies LLC. 


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If you’ve ever parented a teenager, you know talking back is not to be celebrated. But when it comes to your business website, talking back is the next big trend. Most websites feel like digital brochures. You scroll, you click, you squint at tiny menus—and if you can’t find what you’re looking for in 20 seconds, you’re gone. On to the next one. But what if you landed on a website that immediately addresses your needs: “Hi there! Looking for a haircut, a color, or some products?” You type “Color,” and the site replies: “Excellent. Want to see our stylists’ availability this week?” No scrolling, no clicking, no calling. Just the information you want right away. That’s a conversational website—and it’s not just for tech giants. Thanks to new AI tools, even the smallest businesses can create sites that chat with customers, not just sit there looking pretty. Why Conversational Websites Could Be the Next Big Thing There are many benefits to a conversational website. Most visitors want quick answers but they don’t want to speak to a person. If they did, they would’ve called. This gives them the answers they want when they want them. Additionally, a conversational website can: Save time: Customers get quick answers any time of day or night instead of calling or emailing you. It will also save your employees time because they won’t have to put off customers to answer the phone or respond to an email. Make sales easier: Instead of a clunky order form, a friendly bot can walk people through the buying process step by step. With advances in AI and search, people are migrating away from typing answers and questions. Most rely on verbal commands and conversations. Search and inquiries are becoming more and more conversational. Feel personal: Customers want to feel seen, not like they’re filling out a tax form. A conversational flow makes your brand warmer and more approachable, especially when you create the tone for your virtual assistant. But I Can’t Code The good news is you don’t need to know a single line of code. Seriously. Tools are popping up every day that do the heavy lifting for you. 1. Build a Site Just by Talking to It Platforms like Wix’s AI Builder let you describe your business in plain English— “I run a bakery that specializes in birthday cakes and gluten-free treats.” —then it generates a full website, complete with text, design, and images. 2. Replace Boring Forms with Friendly Chats Instead of “Fill out this contact form,” tools like Landbot or Tidio turn that process into a conversation. Bot: “What’s your name?” Visitor: “Samantha.” Bot: “Hi Samantha! Want to see today’s specials or book a table?” Lead captured. Customer happy. 3. Let AI Test and Tweak Your Site for You  Services like Coframe quietly improve your site in the background. They test different headlines, buttons, and layouts to see what gets the most clicks—no knowledge of A/B testing required. A Few Tips to Keep It Human Even with all this cool tech, the magic is in your brand’s personality. Keep these best practices in mind: Use your voice. If you’re a playful boutique, let your chatbot be sassy. If you’re a financial planner, keep it calm and professional. Be clear it’s AI. Customers don’t mind chatting with a bot, but they do mind feeling tricked. There are some really good AIs out there. It may not be obvious to them that they are not talking to one of your employees. Be transparent about that. Guide people forward. Every conversation should end with a next step: “Book now,” “Call us,” or “See more.” Anticipate what would logically come next. Ready to Make Your Website Talk? Your customers (and potential customers) want quick answers, easy booking, and a sense that someone’s listening and understands what they want—even if that “someone” is AI. With today’s tools, you don’t need a tech team or a giant budget. You just need your unique voice and a willingness to let your website have a conversation instead of being a silent billboard. Internet interactions are becoming more conversational. Watch how people around you are using their phones. They’re talking to AIs more often than people. You want to make sure you’re prepared to answer them back. -------- Christina Metcalf is a writer and women’s speaker who believes in the power of story. She works with small businesses, chambers of commerce, and business professionals who want to make an impression and grow a loyal customer/member base. She is the author of The Glinda Principle , rediscovering the magic within. _______________________________________ Facebook: @tellyourstorygetemtalking Instagram: @christinametcalfauthor LinkedIn: @christinagsmith
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You've polished your website, perfected your elevator pitch, and your product or service genuinely solves real problems. Yet somehow, you keep attracting the wrong customers—the ones who haggle over every penny, make unreasonable demands, or disappear after one purchase. Meanwhile, your dream clients seem to float past, elusive, visiting but not buying. Why? As in any human relationship, you need to be more magnetic. If your answer is, “I’m trying,” then perhaps you’re creating the wrong kind of magnetic field around your brand. Opposites Don't Always Attract in Business Did you ever play with magnets? If you did, then you know magnets have two poles that create distinct fields of attraction and repulsion. Your business has something similar. Every decision you make, from your pricing strategy to your communication style, either attracts or repels specific types of customers. Most beginning businesspeople think success is about appealing to as many people as possible. Their marketing consists of claims like, “This is a great gift for everyone,” “This item fits everyone’s lifestyle.” But trying to appeal to everyone creates neutral magnetism that attracts no one strongly. Most customers don’t want to be everyone. They want to be spoken to in ways that catch their attention, such as “Creative architects love our tool,” or “We help people who hate doing yardwork get their weekend back.” Those types of callouts leave a potential customer thinking, “That’s me,” which inadvertently directs them to think, “That (product/service) is for me.” Speaking in Your Customer's Natural Wavelength Additionally, your ideal customers operate on distinct "business frequencies," that’s to say, patterns of decision-making, communication preferences, and value systems that are surprisingly predictable within industries and personality types. Most businesses broadcast on a "Generic FM"—bland, safe messaging that technically reaches everyone but resonates with no one. Your competition is probably doing the same thing, which is why customers can't tell you apart. Tuning Into the Right Station Let's say you run a marketing agency. Instead of saying "We help businesses grow," try identifying your ideal client's specific “frequency”: ● The Overwhelmed Entrepreneur: "For entrepreneurs who lie awake at 2 AM wondering why their great product isn't selling itself" ● The Scaling Company: "When your scrappy startup marketing tactics hit a wall at $2M revenue" ● The Corporate Escapee: "Marketing services for executives who fled corporate life and swore they'd never work with agencies that speak in buzzwords again" Each message repels two groups while magnetizing one and that's exactly what you want. Availability Affects Attraction Many small businesses are getting it backwards. They think being constantly available and accommodating makes them more attractive. 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She works with small businesses, chambers of commerce, and business professionals who want to make an impression and grow a loyal customer/member base. She is the author of The Glinda Principle , rediscovering the magic within. _______________________________________ Instagram: @christinametcalfauthor LinkedIn: @christinagsmith