Operators of Comparison-Shopping Website to Settle Federal Trade Commission Charges Alleging Deceptive Rankings of Products, Fake Reviews

The operators of a website that compares student loans and other financial products have agreed to settle Federal Trade Commission (FTC) allegations that the operators misled consumers to believe their website provided objective product information, when, in fact, they offered higher rankings and ratings to companies that paid for placement.

In an administrative complaint against the Delaware-based company and its three operators, the FTC also alleged the company touted fake positive reviews of its website.

Andrew Smith, Director of the Bureau of Consumer Protection, said that, while the company “told consumers that its financial product rankings were based on objective and unbiased information about the quality of the product being offered,” it had instead sold its rankings to the highest bidders. “These misrepresentations undermine consumer trust,” he said, adding the Bureau of Consumer Protection will hold lead generators like this accountable for their false promises of objectivity.

According to the FTC’s complaint, the operators of the website falsely claimed that the website provided “objective,” “accurate” and “unbiased” information about consumer financial products, such as student loans, personal loans, and credit cards. Specifically, the company misrepresented that the information on its website was not affected by compensation from advertisers.

In addition, the complaint alleges that the company and its operators misrepresented that consumer reviews on its website and third-party websites reflected actual experiences of impartial consumers. In most instances, it was found, those reviews were written or made up by the company’s employees, their family or friends, or other individuals with personal or professional relationships with the company.

According to the FTC’s complaint, reviews about the website and customer service appear on third-party review platforms, including trustpilot.com, which allows users to select a star rating when reviewing a company. Of the 126 reviews on trustpilot.com, 90 percent were written or made up by employees or their family, friends or other associates—and all of these manufactured reviews provided five-star ratings for the company, according to the FTC.

The proposed settlement order would prohibit the company and its operators from making the same types of misrepresentations cited in the FTC’s complaint. The proposed order also requires the company to pay $350,000.

The FTC vote to issue the proposed administrative complaint and to accept the proposed consent agreement with the company and its individual operators was 5-0. Commissioner Rebecca K. Slaughter issued a statement on the matter. “I write separately to highlight the importance of this case in addressing a cutting-edge market practice that I fear is becoming increasingly common online: Purportedly neutral rankings and recommendations that actually reflect paid product placement,” she said.

The FTC also voted 5-0 to issue the proposed administrative complaint and to accept the consent agreement with the company. The FTC published a description of the consent agreement package in the Federal Register; the agreement will be subject to public comment until March 13, 2020, after which the FTC will decide whether to make the proposed consent order final. Once processed, comments will be posted on regulations.gov.

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email