In continued enforcement of the Consumer Review Fairness Act (CRFA), the Federal Trade Commission entered consent decrees against two rental management companies that mandated non-disparaging reviews in their consumer contracts.
Florida-based Shore to Please threated that any vacationer who posted less than a 5-star review immediately owed the company at least $25,000; Baltimore-based Staffordshire Property Management, LLC threatened suit for any disparagement. Under the CRFA, which was enacted in 2017, businesses that use standardized contract terms imposed with limited ability for consumer negotiation cannot in those terms bar consumers from writing and posting negative reviews online nor threaten penalties for doing so. Both companies agreed to refrain from the future use of such non-disparagement provisions, as well as to inform previously affected consumers of the voiding of the relevant contract clauses and their right to post honest reviews. These proposed orders follow the FTC’s recent settlement of three other complaints, the Commission’s first actions to deal exclusively with the CRFA, which included similarly broad injunctive and other relief. The FTC’s proposed orders will be subject to public comment before issuance of any final consent orders.