FTC Cracks Down On Companies That Stifle Reviews

Until recently, customers of Las Vegas Trail Riding allegedly had to contractually promise to refrain from posting negative reviews on sites like Yelp. The contracts also provided that violations of the policy would result in fines of at least $5,000, according to the Federal Trade Commission.

“The only allowance for a less than a 5 star review is through our own review system PeekPro,” stated the contract, which was in effect from 2015 until at least May of 2018, according to the FTC.

Las Vegas Trail Riding also banned customers from notifying the authorities if there was a “discrepancy” regarding the animals' care, according to the FTC.

On Wednesday, the FTC accused Las Vegas Trail Riding and two other companies -- Pittsburgh-based Waldron Electric Heating and Cooling, and Braintree, Massachusetts-based National Floors Direct -- of violating a federal law by attempting to squelch online reviews.

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Form contracts from Waldron Electric Heating and Cooling allegedly required customers to agree to keep all terms “private and confidential,” and to refrain from filing complaints with the Better Business Bureau.

National Floors Direct allegedly used standardized contracts that required people to agree “not to publicly disparage or defame” the store “in any way or through any medium.”

The FTC alleged that all three companies ran afoul of the Consumer Review Fairness Act. That law, which took effect in March of 2017, invalidates standardized contractual provisions that restrict consumers' ability to post reviews.

All three companies agreed to refrain from using non-disparagement clauses in standardized contracts in the future. They also agreed to inform people who previously signed contracts that the gag clauses were unenforceable.

The FTC has previously accused companies of attempting to stifle reviews, but Wednesday marked the first time the agency brought cases that focused exclusively on alleged violations of the Consumer Review Fairness Act.

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