Feds warn companies: Fake online reviews could lead to fines
WASHINGTON | Federal regulators say they are cracking down on “an explosion” of businesses’ use of fake reviews and other misleading messages to promote their products and services on social media.
The Federal Trade Commission said it has warned hundreds of major corporations and smaller businesses that they could face fines if they use bogus endorsements to deceive consumers.
“The rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace,” the FTC said in a news release Wednesday.
The FTC action signals a commitment to flex its authority to use penalties to enforce consumer protection laws. The agency said it has sent formal notices of penalty offenses to about 700 companies, warning they could face penalties of up to $43,792 for each violation.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, who heads the agency’s consumer protection bureau. “Advertisers will pay a price if they engage in these deceptive practices.”
The companies receiving the notices are a who’s who of Corporate America — including major corporations, big retailers and consumer product companies, as well as leading advertisers and ad agencies.
They include tech giants Amazon, Apple, Facebook, and Google and its YouTube video service, as well as internet service providers like AT&T and Comcast. Others run from retailer Abercrombie & Fitch and brewer Anheuser-Busch to manufacturers General Electric, General Motors and Honda. Popular shopping and review sites such as eBay and Yelp also are included.
The FTC, however, stressed that a company having received a notice does not suggest that it has engaged in deceptive or unfair conduct.
The notice cites practices the agency found previously to be unfair or deceptive. They include falsely claiming a third-party endorsement, misrepresenting whether an endorser is an actual user or using an endorsement to make deceptive performance claims. It also listed failing to disclose a significant connection with an endorser and misrepresenting that the endorser’s experience represents that of a typical consumer.
IMF head pledges renewed efforts to protect data integrity
WASHINGTON | The embattled head of the International Monetary Fund, who successfully fought to keep her job following a data-manipulation scandal, on Wednesday pledged renewed efforts to bolster data integrity while focusing on the main job of helping countries recover from a devastating global pandemic.
IMF Managing Director Kristalina Georgieva said she is glad the IMF’s 24-member executive board expressed confidence in her ability to head up the 190-nation agency. The board looked into accusations that Georgieva, while at the World Bank, had pressured staff to boost the rankings of China and other countries in 2018 in an influential business climate report
“The board concluded that it has full confidence in my ability to lead the Fund and it feels great to concentrate on the work at hand,” Georgieva said at a news conference to preview the agenda for this week’s annual meetings of the IMF and World Bank in Washington.
Georgieva said that the episode taught her the critical need to make sure that staff working for her feel the ability to raise concerns. She said she planned to meet with IMF staff on Monday to discuss the incident and to explore ways to bolster the reliability of the economic reports the IMF produces.
“I first want to remind everybody that the problem was with one specific, rather controversial report at the World Bank, not with the research and data at the IMF,” she said.
She said the IMF board recognized the “the excellence of the IMF and IMF research” and the strong monitoring system at the agency ensuring the integrity of its data.
U.S. average mortgage rates decline; 30-year at 2.99%
WASHINGTON | Average long-term mortgage rates declined this week, with the benchmark 30-year loan slipping back below 3%.
Mortgage buyer Freddie Mac reported Thursday that the average rate for a 30-year mortgage eased to 2.99% from 3.01% last week. The rate stood at 2.87% this time last year. It peaked this year at 3.18% in April.
The rate for a 15-year loan, a popular option for homeowners refinancing their mortgages, fell to 2.23% from 2.28% last week.
The Federal Reserve recently signaled its belief that the economy has recovered sufficiently from the pandemic recession for it to soon begin dialing back the emergency aid it provided after the spread of coronavirus.
The number of Americans applying for unemployment benefits fell last week, another sign that the U.S. job market and economy continue their steady recovery from last year’s coronavirus recession. Jobless claims fell by 38,000, to 326,000, the first drop in four weeks, the Labor Department reported Thursday.
U.S. wholesale prices rose record 8.6% over 12 months
WASHINGTON | Inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010.
The Labor Department reported Thursday that the monthly increase in its producer price index, which measures inflationary pressures before they reach consumers, was 0.5% for September compared to a 0.7% gain in August.
The 8.6% rise for the 12 months ending in September compared to an 8.3% increase for the 12 months ending in August, which had been the previous record 12-month gain.
—From AP reports