Hiding online reviews from dissatisfied customers and online shoppers is a very common practice, particularly in the e-commerce space. However, hiding online reviews posted by consumers can actually land businesses in trouble. In the latest compliance bulletin issued by the US Consumer Financial Protection Bureau (CFPB), hiding negative reviews would be treated as an unfair and deceptive act.
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How do online reviews influence consumer financial markets?
There are two groups of online users who use or rely on online reviews.
- Online review providers or writers who are using the product and provide fair and honest feedback on the financial services and solutions
- Prospects who rely on online reviews for making a buying decision.
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Common malpractices that are involved in online consumer reviews have been listed below:
- Writing fake reviews
- Paying employees to write positive reviews about their business on third-party product recommendation sites
- Paying non-employees / syndication firms to post on their website
- Writing negative online reviews about competitors by paying employees and non-employees
- Hiding negative online consumer reviews or pushing these reviews at the bottom of the page with no option for filters.
CFPB has highlighted the increasing importance of online reviews for consumer financial products and services. And, therefore, manipulating online reviews calls for penalizing actions from governing bodies. The latest compliance bulletin aligns with 2016’s Consumer Review Fairness Act (CRFA) and Consumer Financial Protection Act (CFPA).
Online consumer reviews for businesses have been a legitimate source of information for potential customers who are scouring the internet for better alternatives than what the search results show. A majority of the online shoppers trust online reviews and often see these as personal recommendations made by people from within their circle of trust. In comparison, excellent reviews seemingly have a much lesser impact on buying behavior compared to negative online. Nearly 9 in 10 buyers would never buy or hesitate to buy from a business that has negative online reviews. That’s why businesses are worried and taking necessary curbing actions about how negative reviews can be controlled from their side. CFPB has highlighted these as malpractice which is almost similar to posting fake reviews favoring the business. However, there is no significant research in the areas of financial services.
With tightening laws and growing awareness about how websites function, consumers have become so much more smarter and inquisitive. To establish a good brand reputation and tread on a fair competitive line of engagement in the industry, consumer financial services companies should be 100% fair and transparent as far as posting and showcasing online consumer reviews are concerned.