What Businesses need to know about “The Federal Consumer Fairness Act”

March 03, 2017

What Businesses need to know about “The Federal Consumer Fairness Act”

March 6, 2017
Most people today have either written or looked at a consumer review before or after making a purchase decision or hiring services. Customer reviews can be extremely helpful to consumers and businesses alike when making such decisions; however, customer reviews can also be potentially detrimental to a business’s reputation. In the age of the Internet, every business action can be exposed and reviewed in real time.  Nothing is local or confidential.

We live in the age of the consumer, and customers today have more influence over a business than ever before.  It is all about what they say, positive or negative, to a friend in person or through digital communication. Today’s social and very mobile consumers have grown accustomed to getting what they want, when they want it, and their expectations have risen accordingly over the years.  With a single post on social media or a review site, a customer can broadcast their opinion about a business to thousands within a few minutes.  

What you may not know is that some businesses have prohibited their customers from publicly posting such negative experiences. These businesses add non-disparagement clauses to their policies and/or terms of service, which prohibit their consumers from posting a negative review about their experience with the business. In some instances, businesses have been known to approach their customers and ultimately demand they remove the posted negative reviews.  When confronted by a business to remove a negative review, many consumers simply comply. Up until this time, businesses have even been able to seek damages if consumers do not agree to act in accordance to remove a negative customer review.

Now because of the Federal Consumer Fairness Act, businesses can no longer prohibit consumers from publicly sharing their negative customer reviews. On December 14th, 2016, the Federal Consumer Review Fairness Act was signed into law.  This new federal law voids clauses in form contracts (contracts that consumers cannot meaningfully negotiate) that prohibit or impose fees for publishing consumer reviews or complaints to the business.  Clauses in existing contracts are voided following 90 days after enactment, which is March 14, 2017.  Beginning December 14, 2017, the Act is enforceable by the FTC, state Attorney Generals, and consumer protection authorities as an unfair or deceptive act or practice. The full text of the Act and its further details can be found here: Consumer Review Fairness Act of 2016.

As a business owner, it is especially important to understand The Federal Consumer Fairness Act.  Beginning March 14, 2017, the Act makes it unlawful to offer a form consumer contract containing non-disparagement and any similar clause.  Any business that uses such a clause will thus be acting contrary to the new law, and therefore contrary to the BBB Code of Business Practices, which can ultimately affect a business’s BBB Accreditation.  Also starting on March 14th, if any business cites a non-disparagement or similar clause insisting BBB discontinue publishing a review or complaint text, the business can expect the clause to be voided by federal law.

BBB of Middle TN reminds businesses that negative reviews can be a golden opportunity to show that you are a business of integrity and that you care about your customer. They may not always be right, but they are always your customers.  Your customer relationships trump advertising, image building, public relations, and marketing.  Business has always been about happy, satisfied customers and it always will be.

Positive reviews from satisfied customers deliver an authentic, transparent endorsement that reinforces why new customers can consider doing business with a business. While a business may be hesitant to ask for a review, satisfied customers are willing to help as long as it can be done easily and quickly.
BBB Middle TN provides a free mobile app that allows a business to request a customer review from anywhere. The Review Solution can be downloaded to any iOS or Android device mobile device and is available to all BBB accredited businesses.

To learn more about BBB Customer Reviews and How To Handle Negative Reviews, please visit Customer Reviews: From a Brand You Trust

For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2016, people turned to BBB more than 224 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org.

There are over 100 local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Middle TN and Southern KY, which was founded in 1961 and serves 38 counties in Middle TN and 7 in Southern KY.