(CN) - AmeriFreight, an automobile shipment broker based in Peachtree City, Ga., agreed to stop touting online customer reviews that it paid reviewers to write, the Federal Trade Commission said.
According to the FTC, its complaint in this case marks the first time the agency has charged a company with misrepresenting online reviews by failing to disclose that it gave cash discounts to customers to post the reviews.
As an automobile broker, AmeriFreight arranges the shipment of consumers' cars through third-party freight carriers. Its website touted that the company had "more highly ranked ratings and reviews than any other company in the automotive transportation business."
As part of its advertising, it encouraged consumers to "Google us 'bbb top rated car shipping.' You don't have to believe us, our consumers say it all."
According to the FTC's complaint, AmeriFreight and its owner, Marius Lehmann, violated Section 5 of the FTC Act by failing to disclose that they compensated consumers for their online reviews.
Specifically, the complaint says the firm provided consumers with a discount of $50 off the cost of its services if consumers agreed to review the company's services online, and increased the cost by $50 if consumers did not agree to write a review.
The company also allegedly provided consumers with a list of conditions for receiving a discount based on posted reviews which said that if they left an online review, they would automatically be entered to win a $100 per month "Best Monthly Review Award" for the most creative subject title and "informative content".
The FTC went on to allege AmeriFreight failed to disclose the material connection between the company and their consumer endorsers, deceptively represented that its favorable reviews were based on the unbiased reviews of customers.
The proposed order settling the FTC's charges prohibits the company from misrepresenting that their products or services are highly rated or top-ranked based on unbiased consumer reviews, or that customer reviews are unbiased.
It also requires the respondents to clearly and prominently disclose any material connection, if one exists, between them and their endorsers.
Finally, they must notify the FTC about any changes in corporate structure or affiliation with new businesses that could affect their compliance with the order, which will expire in 20 years.
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