Online reviews are among the most influential factors shaping consumer decisions in today’s digital marketplace. Whether it’s a Google review, a star rating on your website, or customer testimonials featured in advertising, reviews can significantly impact a dealership’s reputation and sales.

But with that influence comes responsibility. The Federal Trade Commission has made it clear that online reviews and testimonials are advertising claims subject to specific regulatory requirements under the FTC’s Consumer Review Rule.

What Is the FTC Review Rule?

In August 2024, the FTC finalized the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, commonly known as the FTC Review Rule. The Rule took effect on October 21, 2024, is codified at 16 CFR Part 465, and gives the FTC explicit authority to seek civil penalties for knowing violations involving deceptive reviews and testimonials. 

The Rule requires dealerships to carefully evaluate what reviews are used, who is posting them, and how they are presented to consumers.

Key Prohibitions Every Dealership Should Understand

1. No Fake or False Reviews

The Rule prohibits creating, selling, buying, or disseminating fake or false consumer reviews or testimonials. This includes reviews generated by AI or reviews that misrepresent a reviewer’s experience.

Prohibited reviews include those that:

• Purport to be from real consumers but are not
• Misrepresent the nature or extent of a reviewer’s interaction with the dealership
• Are posted without a genuine customer experience

If a review is posted at a dealership’s direction by someone who never actually engaged with the dealership, that practice likely violates the Rule.

2. No Conditional Incentives Based on Sentiment

Businesses may not offer compensation or incentives conditioned on the content or sentiment of a review, positive or negative.

For example, statements such as, “Leave us a 5-star review and receive a gift card” are expressly prohibited.

3. Insider Reviews Must Be Fully Transparent

Reviews or testimonials from employees, agents, officers, or managers must include clear and conspicuous disclosure of the reviewer’s relationship to the business.

This requirement can also apply when friends, acquaintances, or colleagues post reviews on a dealership’s behalf, even if they are not on payroll. The Rule further prohibits a business from publishing insider reviews if it knew—or should have known—that required disclosures were missing.

4. No Misrepresenting Control Over Review Platforms

If a business creates or controls a website, platform, or page that appears to provide independent consumer reviews, it must not misrepresent that independence.

This is particularly relevant when dealerships embed or curate reviews in a way that makes them appear third-party or unbiased when they are not.

5. No Review Suppression

The Rule prohibits:

• Using threats—legal or otherwise—to suppress negative reviews
• Claiming that displayed reviews represent “most” or “all” consumer feedback when unfavorable reviews have been hidden or excluded

Selective presentation that misleads consumers is a compliance risk.

The FTC Means Business

On December 22, 2025, the FTC announced that it sent warning letters to 10 companies regarding potential violations of the Review Rule, signaling that enforcement is underway. 

According to the FTC, the warning letters addressed concerns that:

• Reviews misrepresented whether the reviewer actually used the product or service
• Incentives may have been conditioned on positive review sentiment
• Insider relationships were not properly disclosed
• Controlled review platforms or social media indicators may have misled consumers

The FTC emphasized that continued noncompliance could lead to civil penalties of up to $53,088 per violation and additional legal action.

This development makes one thing clear: the FTC is actively scrutinizing real-world review practices across industries.

What Dealerships Should Do Now

To reduce regulatory risk under the FTC Review Rule, dealerships should:

• Post only reviews from real customers with bona fide dealership experiences
• Avoid incentives tied to review sentiment; neutral incentives are safer
• Clearly disclose material connections between reviewers and the dealership
• Periodically audit website and advertising content for review compliance

If you are unsure whether your current review practices comply with the Rule or how to align your marketing strategy with FTC requirements, consider consulting with a compliance professional experienced in FTC advertising and consumer protection law, such as Steve Levine of Ignite Consulting Partners.