Ask every customer for reviews and never pay for stars: the FTC reviews rule for service businesses

The FTC’s rule on consumer reviews and testimonials, effective October 21, 2024, lets courts impose civil penalties for knowing violations. Incentives are allowed only without a required sentiment, reviews featured in marketing become testimonials, and agencies and review brokers can be liable too.

Source facts

The FTC’s rule Q&A says the Rule on the Use of Consumer Reviews and Testimonials went into effect on October 21, 2024 and authorizes courts to impose civil penalties for knowing violations. The rule does not provide a private right of action, and advertising agencies, public relations firms, review brokers and reputation management companies are not immune from liability.

The rule does not prohibit giving incentives for reviews as long as there is no express or implied requirement that the reviews express a particular sentiment, though failing to disclose incentives could violate the FTC Act. Asking only customers believed to be happy is not specifically prohibited by the rule but could violate the FTC Act.

A business that merely hosts consumer reviews is not liable for fake ones it did not write or buy, even if it prompts submissions or aggregates star ratings. But testimonials on a business’s own website are disseminated, not hosted, and consumer reviews featured in advertising or marketing materials become testimonials, so the business could be liable if they are fake or false.

Applicability

Use this for any business that solicits, displays or pays for reviews or testimonials. The Q&A is FTC staff guidance that the FTC says isn’t definitive or a safe harbor; the FTC Act and Endorsement Guides also apply.

DSE recommendation

DSE recommends a written review policy: request reviews from all customers the same way, never tie incentives to positive ratings, and feature only genuine testimonials. Send the same review request to every completed job, disclose any incentive, keep the source of each testimonial used on the website or in proposals, and require marketing agencies to follow the policy in their contracts.

Verification

Review the website’s testimonials and review requests twice a year against the policy, confirm each featured testimonial traces to a real customer interaction, and check agency invoices for any purchased-review services.

Official reference

Federal Trade Commission — The Consumer Reviews and Testimonials Rule: Questions and Answers. Reviewed October 18, 2026.