In January of 2017, the company UrthBox, which sends subscribers snack boxes, allegedly began giving free products to people who posted positive reviews on the Better Business Bureau's website.
At the time, the San Francisco-based company only had 9 reviews on the BBB's site. All were bad. But after UrthBox started offering free snack boxes to reviewers, the number of critiques on the BBB's site ballooned to 696 -- 612 of which were positive.
That's according to the Federal Trade Commission, which this week unveiled a complaint alleging that UrthBox duped consumers with its effort to encourage reviews by giving away freebies.
“People should be able to trust that good customer reviews aren’t the result of companies secretly paying the reviewers,” Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, stated this week. “As this case shows, we hold companies accountable for this kind of deceptive marketing.”
The FTC has long urged companies to ensure that online endorsers disclose gifts, payments or other incentives. In the past, the agency has brought complaints against companies including Lord & Taylor and Warner Bros. over endorsements that appeared unbiased, but were actually purchased by marketers.
The FTC's complaint against UrthBox also included allegations that it violated the 2010 Restore Online Shoppers' Confidence Act -- which aims to prevent web companies from tricking consumers into registering for paid subscriptions. UrthBox allegedly offered people a free trial of its snack box, provided they pay shipping charges. The company then automatically signed up the consumers who ordered the free trial for six-month subscriptions, according to the FTC.
UrthBox settled the allegations by agreeing to pay $100,000 and to disclose any material connections with reviewers or endorsers. The company also agreed to take “reasonable steps” to remove reviews by endorsers who were compensated, and who didn't disclose that fact. Additionally, UrthBox promised it won't use sign people up for subscriptions without first obtaining their informed consent.