FTC’s New Rule on Fake Reviews: What Service Contractors Need to Know
By Dipa Gandhi
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The Federal Trade Commission (FTC) is stepping up its game in the fight against fake reviews and testimonials. Service area businesses, especially those that rely on local reviews—like roofers, electricians, and landscapers—must pay close attention to the recent ruling. Alongside the FTC, Google is also tightening its policy on fake reviews, which could lead to suspension or removal of a business's Google Business Profile (GBP). On top of civil penalties, businesses could face serious reputational harm if caught using misleading testimonials. Here's what you need to know to protect your business and maintain customer trust.
Strengthening the Fight Against Fake Reviews
The FTC's latest rule cracks down on businesses that attempt to game the system with fake or AI-generated reviews. We've all seen it—those suspiciously glowing five-star reviews that sound too good to be true. But this isn't just a problem for large corporations; even small, local businesses are at risk of getting pulled into the enforcement net.
A contractor in New Jersey learned this lesson the hard way. After hiring a third-party service to generate positive reviews, they found themselves under FTC investigation. The result? A $25,000 fine and the loss of their Google Business Profile. With Google now cracking down on fake reviews as well, this New Jersey business was hit from both sides. The combined effect of the FTC's civil penalties and Google’s policy enforcement was devastating.
The FTC’s new rule gives the agency more teeth, allowing it to issue civil penalties without needing to prove intent. Similarly, Google is tightening its policies, using advanced AI detection tools to root out fake reviews and remove them. In some cases, businesses caught in violation may even see their GBP suspended.
How This Impacts Home Service Contractors
For service area businesses like plumbers, painters, and roofers, reviews are often a make-or-break factor for securing new leads. Potential clients trust the experiences of others in their community, but fake reviews undermine that trust. With the new rule, the FTC will be cracking down on businesses that try to manipulate public perception through fabricated testimonials. At the same time, Google’s new enforcement measures make it risky to rely on paid or AI-generated reviews.
In an era where many businesses use automated tools to manage reviews, the stakes are even higher. AI can write convincing reviews that pass as authentic, but both the FTC and Google are now explicitly targeting the use of these tools to deceive consumers. Imagine a cleaning company that uses an AI tool to generate dozens of positive reviews on their GBP. While it may temporarily boost their rankings, the joint enforcement from the FTC and Google makes this a dangerous strategy. It’s simply not worth the risk.
What You Can Do to Stay Compliant and Thrive
So, how do you avoid getting caught up in the FTC’s and Google’s tightening net while still growing your business through reviews? The answer is simple: authenticity.
- Focus on organic reviews: Encourage satisfied customers to leave genuine reviews by making the process as easy as possible. Send a follow-up text or email with a direct link to your GBP or other review platforms.
- Be transparent in your requests: Don’t offer incentives like discounts or freebies in exchange for a positive review. Not only does this violate FTC and Google guidelines, but it also erodes trust if the word gets out.
- Invest in quality service: The best way to earn positive reviews is to provide excellent service. Word-of-mouth marketing from happy customers will always be more powerful than anything fabricated.
- Monitor your reviews regularly: Use services like 99 Calls, which can help track and manage reviews across platforms like Google and Yelp, ensuring that you stay on top of any suspicious activity.
- Train your team: Make sure everyone understands the importance of authentic reviews and knows how to request them properly from satisfied customers.
One local plumber in California found success by focusing on customer satisfaction rather than shortcuts. Instead of relying on paid review services, they simply asked happy customers to share their experiences. Over time, this genuine feedback led to a noticeable increase in leads, all without the fear of an FTC or Google audit.
The Bottom Line
For service businesses, reviews are vital to success—but only if they’re real. With the FTC’s new rule and Google’s stricter policies, fake reviews are a risk that’s simply not worth taking. Instead of shortcuts, invest in authentic customer relationships and high-quality service. Not only will this protect you from hefty fines and suspensions, but it will also create a stronger, more sustainable reputation in the long run.
