This week, the Federal Trade Commission (FTC) and six states filed a lawsuit against rental listing platform Roomster Corp. and its owners based on their posting of fake positive reviews, claiming to offer verified and authentic listings, and using phony listings to attract paid users. The lawsuit was also asserted against the person who sold Roomster the tens of thousands of fake reviews, but the FTC filed a stipulated final order with him and obtained his agreement to cooperate in the ongoing case. In that order, he has agreed to a permanent injunction prohibiting him from selling or misrepresenting consumer reviews or endorsements, a $100,000 monetary judgment, and other relief. For example, he must notify certain app stores that Roomster paid him for posting reviews on each platform and must identify the fake reviews and approximate times they were posted.
According to the FTC’s press release, this lawsuit is an effort to “crack down on fake and deceptive reviews.” As a reminder, the FTC has no tolerance for fake reviews and phony listings, and companies should make sure that both its and its vendors’ advertising strategies are lawful and legitimate.