Why You Can’t Stop Negative Reviews: Understanding the Consumer Review Fairness Act
Have you ever received a negative review and wished that you could have prevented it from being posted? Here’s why you can’t merely contract the problem away.
There is always that one patient who seems to give you trouble. They post horrible reviews that slander your practice, and you worry about how these reviews are affecting your business and potential future patients. But what if that negative review didn’t exist in the first place?
Some have decided that the best way to eliminate the stress is to have their clients sign contracts that stop them from posting negative reviews. In theory, this seems like the perfect solution – you don’t have to do the damage control because the negative review did not exist in the first place.
But preventing consumers from posting negative reviews is not an easy solution.
The Consumer Review Fairness Act
In 2016, the Consumer Review Fairness Act (“CRFA“) was passed to say that companies could not write contracts that prevent their customers from posting negative reviews. The CRFA aimed to allow individuals the freedom to share their honest opinions on goods and services on any forum without the fear of legal repercussions.
The CRFA went on to provide the Federal Trade Commission (“FTC”) with enforcement power. And the FTC is currently authorized with the same powers it has in regulating fair or deceptive acts or practices. Thus, companies who violate the CRFA can be forced to pay financial penalties.
Does the FTC Enforce the CFRA?
In May 2019, the FTC settled three complaints enforcing the CRFA with smaller businesses across the country. This was the first time the FTC had filed and settled complaints focused solely on compliance with the CRFA.
In the settlements, each company agreed to stop using the problematic contracts and to notify any consumers who already signed those contracts that the prohibited text was not enforceable.
One such case originated with the FTC’s complaint against LVTR LLC, a recreational horseback riding company located in Nevada. LVTR asked its customers to sign contracts that included the language:
I agree to our non-disparagement and protection of reputation clause. For the purposes of this Section, ‘disparage’ shall mean any negative statement, whether written or oral, including social media about our Company, Volunteers, Owners, Representatives, etc.
Under LVTR’s contract, if a consumer posted a negative review, they agreed to pay the company a $5,000 fine. Essentially, if the customer did not want to pay a hefty fine, they could not post a negative review of the company in any capacity on any website.
The FTC stated that LVTR could not prevent consumers from posting negative reviews under the CFRA and ordered LVTR to refrain from using these contracts. LVTR agreed to notify its customers that the contracts contained illegal provisions, submit compliance reports, and subject itself to compliance monitoring by the FTC.
The FTC Continues to Bring Cases Against Small Businesses
By August 2019, the FTC brought and settled five more complaints against smaller companies for failure to comply with the CRFA.
The FTC alleged in a complaint against Shore to Please Vacations LLC that in contracts offered to its vacation house rental customers, Shore to Please included a disclaimers section that used prohibited language such as:
By signing below, you agree not to defame or leave negative reviews (includes any review or comment deemed to be negative by a Shore to Please Vacations LLC officer or member, as well as any review less than a “5 star” or “absolute best” rating) about this property and/or business in any print form or on any website….
Shore to Please’s contract said that any consumer who violated that clause would have to pay a minimum of $25,000 for breach of the contract.
Shore to Please settled with the FTC. As in the LVTR case, the company is now expected to refrain from using these contracts and agreed to notify its customers that the contracts contained illegal provisions. Furthermore, Shore to Please must submit compliance reports as well as be subject to compliance monitoring by the FTC.
Again, note that LVTR and Shore to Please are smaller companies that are not in the public eye. So, if you assume the FTC will not pay any attention to your practice due to your size, think again! The FTC is just as likely to focus on your practice’s compliance with the CFRA as they are any other business.
What You Can You Do About Negative Reviews
As we’ve established, you cannot use language in your contracts that prevents consumers from posting negative reviews. However, that doesn’t mean that every negative review has to be out for the world to see.
There are times when you are allowed to remove negative reviews, such as when the review:
- contains confidential or private information like a person’s financial, medical, or personnel file information or a company’s trade secrets
- is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or is inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristics
- is unrelated to the company’s products or services
- is clearly false or misleading.
If you want to learn more, visit our blog post about responding to negative reviews. And if you want to discuss your practice’s policies, procedures, and contracts, schedule a complimentary consultation with one of Jackson LLP’s experienced healthcare attorneys below.