BIG News

New Protections for Consumers Who Leave Negative Reviews About Businesses

President Obama has just signed the Consumer Review Fairness Act, which could help protect people who post negative reviews about businesses.

Online reviews on sites like Yelp are mixed blessings for many companies. If you’re fortunate enough to have customers who like your work and take the time to tell others, it can be a powerful marketing tool.

But there are also bad actors who are eager to demonize small businesses for small or even imagined failures.

That’s why some companies have started including nondisparagement clauses in their terms of service. Business owners have charged critical customers thousands of dollars in fines and threatened them with lawsuits for violating those terms—which many customers don’t realize they’ve signed.

But now, thanks to the Consumer Review Fairness Act, nonnegotiable form contracts that contain such language will be voided. So will clauses that seek to take away a customer’s intellectual-property rights to their own reviews. The Federal Trade Commission will be tasked with enforcing the new rules and levying fines against businesses who break them.

“Just as word of mouth is used by family and friends to share experiences with particular brands or businesses, online reviews have significant benefits to consumers in their purchasing decisions,” said Sen. Jerry Moran, who helped introduce the law. “… It will help make certain consumers in Kansas and across the country are able to make their voices heard without fear of lawsuits or financial repercussions for honest feedback.”