What are the legal guidelines around customer reviews? [AUS & NZ]
Customer reviews are very influential in persuading consumers about the quality and service of your company. They promote your business with a level of authenticity that other marketing efforts may not carry as they represent the voice of someone that’s paid money for your service, and was delighted at the result.
Such is the power of customer reviews that they are often regulated by a country’s commerce body or advertising standards group. The roles and responsibilities of these groups vary from country to country, as do their powers to enforce any breaches or infringements. For the purpose of this article, we will focus on two southern hemisphere countries and the laws and guidelines that exist around customer reviews for each of them. Those countries will be Australia and New Zealand and while we will do our best to outline key takeaways in this article it does not constitute legal advice and you should consult a legal professional in your country for any legal queries you may have.
Laws for customer reviews in New Zealand
Regulation on customer reviews, and their use and misuse, falls under the remit of the Commerce Commission NZ. Comcom, as it’s otherwise known, has a handy infographic on its website that outlines what you can and cannot do with customer reviews. These guidelines include:
- Only collect genuine reviews.
- Not writing, publishing, or requesting fake reviews.
- Not excluding certain customer groups (like unhappy customers).
If you’re publishing reviews on your website then you must ensure they give an accurate picture of what your business is like to work with. This includes:
- Clearly disclose any relationship that may impact the impartiality of a review.
- Not changing the order in which reviews appear (to seem more positive).
- Ensure customers know how you will use their reviews.
- Should not remove reviews of a certain score to make your business look better than it is.
If you collect and present reviews that mislead customers then you are breaking the law. This could include having staff post reviews, creating fake profiles to post reviews, or having friends or family post reviews.
The Commerce Commission also states that you should not edit reviews to alter their message. Does this mean you can correct spelling and grammar mistakes? While the Commerce Commission's wording doesn’t exclude this, these corrections should not alter the message itself.
If you knowingly create, gather, publish, and generate fake reviews the ramifications can be quite significant. As outlined by Legal Vision, you could face fines of up to $200,000 as an individual or $600,000 for a company if you’re caught posting fake reviews.
On the flip side, there are also severe legal implications for writing a fake review about a business as a customer. That’s because doing so can be classed as defamation, which is damaging someone’s reputation through untrue or misleading statements. If your business receives a negative review from someone that has never done business with you then you may have a legal case against them.
In summary, New Zealand consumer law outlines that it’s illegal to mislead customers and consumers. The Fair Trading Act makes it illegal for anyone in trade to mislead consumers, give false information, or make misrepresentations. It also applies to advertising in all forms such as online, print, TV, social media – and in all dealings with consumers. This extends to the use of customer reviews and you may find yourself in hot water if you do any of the following:
- Edit customer reviews to change the message.
- Gather fake reviews.
- Change the order of reviews on your website.
In reality, the likelihood of action is dependent on the Commerce Commission’s assessment of the breach. In 2021, for example, the Du Val group was brought to the attention of the commission as members of staff had left positive Google reviews of the company without declaring their relationship with the business. The commission did not investigate the business but did say in a statement “In general terms, reviews must be genuine and presented in a way that does not mislead consumers. In publishing reviews, businesses and reviewers should clearly disclose any relationship affecting the impartiality of a review. Businesses that collect and present reviews in a way that misleads consumers may be breaching the Fair Trading Act.”
Laws for customer reviews in Australia
The Australian Competition and Consumer Commission (ACCC) is the main body in Australia that outlines the requirements and expectations of online reviews. Helpfully the ACCC goes into more detail about review management platforms (like Review Tui) as well as an individual company’s responsibilities. The ACCC confirms the importance and influence reviews have on consumers and the need for them to be accurate so as not to mislead consumers.
The ACCC outlines that: “Online reviews provide consumers with information about products, services and businesses based on the experiences of other consumers. Reviews may appear on a business's own site, on social media, or on a review platform. Review platforms are sites that specialise in presenting product reviews about a range of businesses. Consumers expect reviews to be independent and genuine to help them make more informed purchasing decisions.” The ACCC’s website helpfully outlines what a business can do, and what they shouldn’t in their guidelines section. For example, a business shouldn’t:
- Encourage family and friends to write reviews about your business without disclosing their personal connection with your business in that review.
- Write reviews when you have not experienced the good or service reviewed or which do not reflect a genuinely held opinion.
- Solicit others to write reviews about your business or a competitor’s business if they have not experienced the good or service.
In Australia, as in New Zealand, it’s illegal to mislead consumers using fake reviews. Businesses and review platforms that selectively remove or edit reviews, particularly negative reviews, for commercial or promotional reasons may be misleading consumers. If the total body of reviews doesn’t reflect the opinions of consumers who have submitted the reviews consumers may be misled.
When it comes to aggregated star ratings, whether that be ratings that a business self-promotes on its website or through embedded customer feedback tools, the star rating must also include the number of reviews that make up that score.
The penalties for promoting, gathering, and or soliciting fake reviews can be severe, and not just because of the reputational damage they can do. In November of 2011, Citymove was fined $6,600 for placing a fake testimonial on its website. But this fine pales in comparison to the $600,000 fine awarded to Service Seeking in 2021 for publishing 17,000 automatically-generated reviews on its platform that the customers did not approve.
It’s not just businesses that intentionally post fake reviews that can get in trouble, but also consumers posting fake reviews too. A business in Australia was awarded $530,000 for a false review that was posted by a client. While this individual had purchased services from the plastic surgeon the review contained false and misleading information that negatively impacted the business.
Businesses can go to great lengths to influence online reviews. Meriton, for example, was fined $3,000,000 for intentionally screening customer email addresses that were likely to complain about their stay from leaving a review on Tripadvisor.
In terms of legal compliance with reviews, the key is to simply be honest. Nobody is perfect and attempting to hide negative reviews breeds distrust - which runs counter to the trust that reviews give! In truth, negative reviews can often be your best marketing tool. Each one gives you a chance to show that when things go wrong (which they invariably do) that you’ll do everything in your power to put it right. We've even written an article on how to respond to negative reviews if you need some guidance. Perfect scores can sometimes even put consumers off buying from a company. Research from Power Review identified that consumers perceive products with perfect five-star ratings as too good to be true. If there are no negative reviews, a shopper may even jump to the conclusion that a brand is hiding something — and that it shouldn’t be trusted.
If you want to gather customer feedback then Review Tui might be the perfect platform for you. Currently only available as an internal customer feedback tool you can collect and manage customer feedback, whether it be good or bad. Sign up to be notified of the platform’s release and new features by clicking on the button below.