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Testimonials: Keep Them Real Or Risk Big Penalities

Recent action taken by the Australian Competition and Consumer Commission (ACCC) is reinforcing the rules against posting misleading and deceptive statements about products and services advertised on the internet.

The regulator has commenced legal proceedings in the Federal Court against A Whistle (1979) Pty Ltd, the franchisor trading as Electrodry Carpet Cleaning, for posting false testimonials online.

The reviews in question appeared on a number of third party sites including Google, Yelp, Word of Mouth and True Local. The ACCC has argued that the testimonials were provided by contractors or people associated with Electrodry, and not by genuine customers. The allegations include directing its agents or contractors to post false testimonials online, and inducing franchisees to post such testimonials by offering rewards including $1,000 payments.

The ACCC is seeking a range of remedies, including declarations, penalties, injunctions and corrective notices.

The use of online testimonials is constantly increasing, and evidence suggests that the number of false testimonials is rising also. This action is a reminder that businesses must be transparent, and avoid misleading conduct when operating online. False testimonials are a clear breach of the Australian Consumer Law. Online traders should consider themselves warned, the ACCC is serious about pursuing offenders.