We have previously discussed the emphasis that the FTC has put on fake reviews throughout 2022, with proposed updates to the Endorsement Guides and a proposed rule to combat fake reviews in addition to enforcement efforts. State Attorneys General continue to also make fake reviews a top priority. Washington Attorney General Bob Ferguson closed out 2022 by filing suit against Allure Esthetic, a Seattle-area plastic surgery provider, and Javad Sajan individually, alleging a series of practices including:
- Requiring patients to agree, before treatment or even seeing Dr. Sajan, to sign a non-disclosure agreement limiting negative reviews, including for a time expressly stating that consumers could not leave a review that was less than 4 stars, or they would be subject to a $250,000 fine and potentially have their personal health information disclosed:
- After service, if a customer left a negative review, offering cash, free services, and free products to resolve their complaints, but first requiring the signing of a second non-disclosure agreement that required removal of the negative review.
- Creating fake positive reviews, allegedly at the direction of Dr. Sajan, using a VPN to disguise the IP address of the origin of the reviews.
- Manipulating social media reviews by purchasing followers and “likes.”
- Altering “before” and “after” photos used in advertising, for example manipulating photos of patients receiving hair plugs to cover up bald spots.
The suit was filed in federal court, alleging violations of the Consumer Review Fairness Act, the Health Insurance Portability and Accountability Act, and violations of the Washington Consumer Protection Act.
While the allegations against Allure and Sajan may seem extreme, they underscore the importance that businesses put on positive reviews (and the sometimes great lengths they will go to in order to obtain those reviews) and the reasons why enforcers are paying such close attention to the source of reviews. Some important takeaways to keep in mind:
- State Attorneys General have the authority to enforce the CRFA and HIPAA, and are increasingly doing so. While not independently enforceable, Washington also cites to the FTC’s Endorsement Guides, as well as CFPB bulletins, in its action. States may take their cues from federal enforcers, but they certainly can act independently in enforcement efforts.
- Consistent with the recent emphasis that the FTC and CFPB in particular have put on individual liability, Washington also sued Allure’s owner. While the ability to pursue individuals under state law varies from state to state, we expect to see this trend continue by State AGs in 2023.
- Remember: enforcers expect reviews to be fair and honest assessments of your company’s practices. Any manipulation of those reviews may result in scrutiny, an investigation, or even a lawsuit.