The FTC’s Crackdown on Fake Reviews and Why Businesses Must Avoid Deceptive Practices

The Federal Trade Commission (“FTC”) has taken a firm stance against deceptive marketing practices, with its first case challenging the use of paid fake reviews on independent retail sites. In a settlement with Cure Encapsulations, Inc., the FTC addressed the issue of fabricated five-star reviews that inflated the reputation of their garcinia cambogia weight-loss supplement. The case highlights the importance of ethical marketing and serves as a stern reminder for businesses to be cautious when handling consumer reviews and testimonials. Cure Encapsulations and its owner, Naftula Jacobowitz, were accused of paying a third-party website to create and post fake reviews for their product on Amazon. These fabricated reviews, which falsely represented the experiences of actual customers, helped to artificially boost the product's ratings and visibility. In their communications with the review site, the defendants made it clear that they needed the reviews to keep the product’s average rating at 4.3 stars, an effort designed to ensure continued sales. In addition to the fake reviews, the company was also charged with making false and unsupported claims about the product's effectiveness. They advertised the garcinia cambogia supplement as a powerful appetite suppressant that could block fat formation and promote rapid weight loss, including claims of losing up to 20 pounds. The FTC found these claims to be misleading, as they were not backed by credible scientific evidence.