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wednesday22 Apr 2020

FTC Settled Charges Against LendEDU for Allegedly Deceiving Consumers with Fake Reviews

The United States Federal Trade Commission (FTC) announced a $350,000 settlement with an online review company. The announcement warns others to not make similar mistakes. The company, LendEDU, was also accused of not disclosing financial ties with the reviewed companies.

LendEDU ranked loans for customers. The FTC lawsuit claims that they failed to disclose that they negotiated payments for top rankings. The lawsuit alleges that the product rankings were objective but in reality the rankings were paid for.

According to the FTC, a link to a disclosure from the footer may not be enough:

In some instances – like when the affiliate link is embedded in your product review – a single disclosure may be adequate. When the review has a clear and conspicuous disclosure of your relationship and the reader can see both the review containing that disclosure and the link at the same time, readers have the information they need.

The above statement says the link and the disclosure must be clearly seen at the same time. Adding a link to a “Disclosure” page from the footer does not appear to conform with FTC guidelines.

The FTC settlement announcement warned online review sites to avoid the following deceptive practices.

Three ways testimonials are deceptive:

  1. If reviews don’t reflect actual reviewer experiences.
  2. If there’s a relationship between the reviewer and the advertiser (like employee, friend or family).
  3. If the reviews are completely made up

FTC Settles with LendEDU

FTC Affiliate Site Guidelines

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