FTC moves from warnings to cases under its fake review rule
The FTC has moved from warning letters to cases under its fake review rule. What the rule bans, the 2026 cases, and what to ask the agency running your reviews.
In this article
The Federal Trade Commission has moved from warning letters to cases under its rule against fake reviews. In 2026 it settled with a supplement seller whose website carried employee-written reviews and, with Illinois, sued a home repair company over fake listings and reviews. Both cases name the company behind the reviews and its owners.
From warning letters to cases
The shift began with letters. On December 22, 2025, FTC staff warned 10 companies about possible violations of the rule FTC . The FTC did not name the companies, and it said the letters are not formal findings that the rule was broken. The letters warned that violations can lead to a federal lawsuit and civil penalties of up to $53,088 per violation.
On April 13, 2026, the FTC charged Vanilla Chip LLC, a Nevada company that sells height supplements for kids and teens as TruHeight. The complaint named its co-founders, Eden Stelmach and Justin Rapoport FTC . The FTC alleged that until at least November 2024, the TruHeight website showed several thousand five-star reviews presented as customer reviews but written by company employees. It said the company relied on reviews written by its own employees and vendors. It said TruHeight gave free and discounted products in exchange for 5-star reviews on its own site and on third-party platforms. The complaint charged violations of the FTC Act and the agency’s Reviews and Testimonials Rule. It covered health claims about the supplements too.
The FTC approved a final order on July 15, 2026, by a 2 to 0 vote FTC . It sets a $4 million judgment against the company and its principals. The judgment is partly suspended, and they must pay $750,000 based on their inability to pay the full amount. The order bars them from buying reviews conditioned on a positive or negative sentiment. It bars them from misrepresenting that a reviewer exists or used the product.
On May 11, 2026, the Justice Department, acting for the FTC, and the state of Illinois sued Premium Home Service. The defendants are B.E.S.T. GDR LLC, which does business under that name, and its owner and CEO, Yosef Bernath FTC . The complaint alleges that since at least 2018 the company created thousands of online profiles for home repair companies that do not exist. It says the local addresses on those profiles belong to unrelated third parties or are made up. It alleges the defendants posted fabricated five-star reviews and used them to dilute real one-star reviews from actual customers. It says tens of thousands of consumers searching for local repair help were diverted to these profiles.
The complaint cites the FTC Act, the review rule, the Gramm-Leach-Bliley Act and Illinois consumer protection laws. The case sits in federal court in the Northern District of Illinois. Its claims are allegations and have not been proven.
What the FTC review rule bans
The rule took effect October 21, 2024 FTC . The FTC’s business guide calls it the Consumer Reviews and Testimonials Rule. Its press releases use shorter names: the Consumer Review Rule and the Reviews and Testimonials Rule. The guide lists these sections.
| Section | What it covers |
|---|---|
| 465.2 | Fake or false consumer reviews, consumer testimonials or celebrity testimonials |
| 465.4 | Buying positive or negative consumer reviews |
| 465.5 | Insider consumer reviews and consumer testimonials |
| 465.6 | Company-controlled review websites or entities |
| 465.7 | Review suppression, such as threats, intimidation, groundless legal threats or false accusations against a reviewer |
| 465.8 | Misuse of fake indicators of social media influence, such as bought followers |
The FTC says the rule lets courts impose civil penalties for knowing violations. Its December 2025 release put the cap at $53,088 per violation.
The rule leaves some common practices alone. It does not ban incentives for reviews, as long as there is no express or implied requirement that a review express a particular sentiment. A small business owner can ask family members to write reviews if they clearly and conspicuously disclose their relationship to the business, the guide says. The rule has no specific ban on asking only happy customers for reviews. But the FTC warns that this practice “could violate the FTC Act.” It gives the same warning about organizing reviews so negative ones are hard to find.
Google’s review policy is stricter
Google’s rules for Business Profile reviews go further on two points Google . Google bars merchants from offering incentives for reviews, such as payment, discounts, free goods or services. It bars them from discouraging negative reviews or selectively soliciting positive ones. Google says incentivized or biased reviews are not allowed and will be removed from Maps.
The FTC rule permits rewards that do not depend on sentiment. Google’s policy does not. Our report on Google Business Profile changes in 2026 covers Google’s other listing updates.
Agencies can be liable too
The FTC’s guide asks whether advertising agencies, public relations firms, review brokers or reputation management companies can be liable under the rule. Its answer is direct: “Yes. These entities are not immune from liability under the rule.” FTC
The guide gives examples. A firm can be liable under Section 465.2(a) if it writes, creates or sells a fake review. It can be liable under Section 465.4 if it offers incentives conditioned on reviews with a particular sentiment. Review suppression and the misuse of fake social media indicators can bring liability too.
Both 2026 cases charged the businesses themselves. In the TruHeight case, the FTC pointed to reviews written by the company’s employees and vendors, and it charged the company and its co-founders.
What it means if you pay an agency for reviews
If an agency runs review requests or reputation work for you, its methods show up on your listings and your website. Three facts matter for owners.
- The cap applies per violation. The $53,088 limit is set per violation, not per case.
- The cases name owners. TruHeight’s two co-founders and Premium Home Service’s CEO are named in the cases.
- Platform rules stack on top. A reward that fits the FTC rule can still break Google’s policy, and Google says it removes incentivized reviews from Maps.
Our guide to marketing agency red flags lists other warning signs. To compare agencies on one public rubric, see the agency index.
This article explains what the FTC’s rule guidance and case releases say. It is not legal advice. Confirm how the rule applies to your business with your own lawyer.
Questions to ask your agency
- How do you ask for reviews, and who gets the request? Every customer should get the same request. Google bans selective asking, and the FTC says it could violate the FTC Act.
- Do you offer anything in exchange for a review? Under the FTC rule, a reward cannot depend on the review being positive or negative. Google bars incentives for Business Profile reviews.
- Has anyone on your team, or a contractor, written reviews of our business? The answer should be no, or every such review should carry a clear disclosure.
- Do you hide, filter or delay negative reviews on our site? The FTC warns that making negative reviews hard to find can be deceptive.
- Do you buy followers, likes or views for any account you run for us? The rule covers fake indicators of social media influence.
- Will you put these commitments in our contract? A signed commitment is easier to check than a sales promise.
Frequently asked
What does the FTC fake review rule ban?
The rule bans fake or false reviews and testimonials, incentives conditioned on a positive or negative review, undisclosed insider reviews, misleading company-controlled review sites, review suppression and fake indicators of social media influence such as bought followers. It took effect October 21, 2024.
Can a marketing agency be liable for fake reviews?
Yes, according to the FTC. Its guidance says advertising agencies, public relations firms, review brokers and reputation management companies are not immune from liability under the rule. A firm that writes or sells fake reviews, or pays for reviews of a set sentiment, can be liable.
Can a business offer customers a discount for leaving a review?
The FTC rule allows incentives for reviews as long as there is no express or implied requirement that the review be positive or negative. Google's Business Profile policy is stricter. It bars incentives such as payment, discounts and free goods or services for reviews.
What is the penalty for fake reviews under the FTC rule?
The FTC's December 2025 release put civil penalties for rule violations at up to $53,088 per violation. In the TruHeight case, the 2026 order set a $4 million judgment, partly suspended, with $750,000 to be paid. That case covered health claims too, so it does not show a penalty for reviews alone.
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