CFPB warns companies against obstructing or manipulating honest customer reviews | Venable LLP

In a bulletin released last week, the Consumer Financial Protection Bureau (CFPB) warned banks and other financial firms against obstructing honest reviews of consumer financial products and services. Although it does not cite any specific study on financial products and services, the CFPB bulletin describes the impact of online reviews on other sectors of the economy.

We’ve covered the Federal Trade Commission’s (FTC) efforts to combat what it sees as rampant customer review fraud, and now the CFPB is preemptively responding to its growing concern about how reviews in online will play into customers’ decision-making when choosing among several financial providers.

At first glance, the CFPB’s foray into the deceptive use of online reviews may appear to come out of left field, but it reflects a larger theme of following the FTC playbook and scrutinizing financial services providers in a fair way. more comprehensively, including their marketing practices. The bulletin itself cites several recent FTC regulations in this area as compelling precedent for applying the CFPB’s UDAAP authority.

As the Bulletin states, a “Covered Person” or “Service Provider” may be held liable for engaging in unfair or deceptive practices, in violation of the Consumer Financial Protection Act (CFPA), in :

  • Using unenforceable provisions in standard form contracts (i.e. contract “gag” clauses) that could, for example, mislead customers into believing that they are either incapable of giving consumer reviews , or that they have to remove previously posted negative reviews
  • Harm customers who rely on consumer reviews by unfairly depriving them of information when these contract “gag” clauses limit the availability of honest reviews
  • Manipulate consumer reviews, which, among other things, may include not posting negative reviews or asking employees to add reviews on third-party websites without disclosing their relationship to the company and ” dislike” negative reviews from real customers

Reliable and honest ratings allow for a level playing field between competitors and incentivize regulated entities to offer quality financial products and services to consumers. The CFPB is asking financial providers to avoid silencing or misleading potential customers with online reviews. In light of this, service providers can begin their self-assessment by reviewing the recent FTC guidelines on customer reviews, dusting off the do’s and don’ts of the Consumer Review Fairness Act (CRFA) and reviewing the FTC Approval Guides FAQ.

Joseph P. Harris