In a bulletin published last week, the Consumer Financial Protection Bureau (CFPB) warned banks and other financial companies against impeding honest reviews of consumer financial products and services. Although it does not cite a specific study for financial products and services, the CFPB’s bulletin describes how online reviews impact other industries across the economy.

We have been covering the Federal Trade Commission’s (FTC) efforts to combat what it sees as rampant customer review fraud, and now the CFPB is preemptively addressing its growing concern with how online reviews will play into customers’ decision-making when they are choosing from among several financial providers.

At first glance, the CFPB’s foray into the deceptive use of online reviews might appear to come out of left field, but it reflects a more general theme of following the FTC’s playbook and scrutinizing financial service providers more holistically, including their marketing practices. The bulletin itself cites to several recent FTC settlements in this area as persuasive precedent for application of the CFPB’s UDAAP authority.

As the bulletin instructs, a “covered person” or “service provider” may be liable for engaging in unfair or deceptive practices, in violation of the Consumer Financial Protection Act (CFPA), by:

  • Using unenforceable provisions within form contracts (i.e., contractual “gag” clauses) that could, for example, mislead customers into thinking they either are unable to give consumer reviews or need to remove previously posted negative ones
  • Harming customers who rely on consumer reviews by unfairly depriving them of information when these contractual “gag” clauses limit the availability of honest reviews
  • Manipulating consumer reviews, which among other things may include failing to post negative reviews or instructing employees to both add reviews on third-party websites without disclosing their relationship to the company and “dislike” actual customers’ negative reviews

Reliable, honest reviews allow for fair play between competitors and incentivize regulated entities to offer quality consumer financial products and services. The CFPB is telling financial providers to avoid silencing or deceiving potential customers with online reviews. In light of this, service providers can start their self-evaluation by consulting the FTC’s recent guidance on customer reviews, dusting off the dos and don’ts of the Consumer Review Fairness Act (CRFA), and reviewing the FTC’s Endorsement Guides FAQs.

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