April 27, 2017
With the growth of social media and online reviewing sites, it is not a surprise that many businesses benefit greatly from online ratings and reviews that are positive, glowing, and render “five stars.” However, even one bad review could be injurious to the reputation of a business, and an extremely negative review could be detrimental. Because their reputations are on the line, many businesses seek to monitor and limit the reviews their customers may post by placing a clause in their form contracts to prohibit consumers from posting negative reviews. Until recently, there was no federal law or restriction on these clauses, even though they impose penalties and fines on customers who post bad reviews, regardless of whether the review is true or not. However, the recent passage of the Consumer Review Fairness Act of 2016 (CRFA) will greatly hinder a business’s ability to monitor and limit reviews after its enactment in March of 2017.