The rule most contractors have not read, but are already being tested on
In October 2024 the Federal Trade Commission's Consumer Reviews and Testimonials Rule (16 CFR Part 465) took effect. It is not a new concept: the FTC had been settling cases on fake reviews and suppressed negative feedback for a decade. The rule formalized existing enforcement theory and added civil penalties up to $53,088 per violation.
Most contractors became aware of the rule from headline coverage of the "buying fake reviews" prohibition. That part is easy to comply with — you were not planning to buy fake reviews anyway. The prohibition that actually changes daily operations is subtler, and it targets something a lot of contractors are actively doing right now through their review software.
The rule prohibits soliciting reviews from a non-representative sample of your customers. In plain English: you cannot pre-screen who you ask. If your flow identifies likely-happy customers and then asks only them for public reviews, you are out of compliance, whether or not a single word on your profile is fabricated.
This article covers what the rule requires, why contractors are specifically exposed, what a compliant system looks like, and the penalty math if you wait to fix it.
Why contractors are in the crosshairs
The review management industry sold contractors a product called "reputation management" for years. The product worked like this: send every customer a short satisfaction survey first, ask for a public review only from people who rated you 4 or 5 stars, route everyone else to private feedback. The vendors called this "protecting your reputation." The FTC now calls it selective solicitation and it is the specific practice the rule is designed to reach.
Home services contractors are a primary target segment for those vendors. A search for "HVAC review software" or "plumber reputation management" returns dozens of tools, and a significant portion of them still run that pre-screening flow by default. If you signed up for one of them in the last five years and ran the default settings, there is a reasonable chance you have been running a non-compliant solicitation program.
The risk compounds because of volume. A plumber who completes 1,500 jobs a year and solicits only from 4-and-5-star raters is creating 1,500 events per year of potential non-compliance. At $53,088 per violation, the math gets uncomfortable fast.
What the rule actually prohibits
The FTC's rule has four core prohibitions worth knowing. Three are easy to comply with. One is the operational challenge.
Fake reviews. The rule prohibits buying, creating, or publishing reviews written by someone who did not have a genuine customer experience. This includes AI-generated reviews and reviews from insiders without disclosure. Most contractors were not doing this.
Insider reviews without disclosure. If you ask a relative, employee, or business partner to leave a review, it must be disclosed that the reviewer has a relationship with the business. Anonymous internal shilling is prohibited.
Review suppression. The rule prohibits using non-disclosure agreements, legal threats, or any other mechanism to prevent customers from leaving negative reviews. If you have ever told a customer in writing that posting a negative review would violate something, that could be an issue.
Selective solicitation. This is the one that catches contractors. The rule prohibits soliciting reviews "from a subset of customers that you have reason to believe will respond positively." Your reason to believe does not need to be explicit: the FTC's view is that any flow which conditions a review request on a positive satisfaction signal creates an impermissibly selected sample.
The rule does not prohibit asking for reviews. It prohibits asking only the happy ones.
Review gating, what it looks like in the wild
Contractors running non-compliant flows are often surprised when they see the mechanic explained. It has been packaged in enough marketing copy that it sounds reasonable. Here is what it actually looks like:
Pre-survey then branch. Customer completes a job. You send a text: "How was your experience? Rate us 1-5." If they rate 4-5, you send: "Great! Would you mind leaving a Google review?" If they rate 1-3, you send: "We're sorry to hear that. A manager will reach out." The manager call never triggers a Google review request.
Happiness threshold. Some platforms let you configure a number: only send review requests to customers who score above N on the internal rating. This is selective solicitation with the threshold written into a settings field.
Opt-in only for positives. Some landing pages show a sentiment question before the Google review button. The button appears conditionally for high raters.
Each of those flows generates a public review distribution that doesn't represent your real customer base. The star average goes up. The review count goes up. But the sample is selected. That is the FTC's problem with it.
What compliant review routing looks like
The compliant alternative is routing, not gating. Every customer sees the option to leave a public review. Every customer gets the option to leave private feedback. The routing handles where they end up, but it does not block anyone from the public channel.
The practical difference: a compliant flow offers every customer both a Google review button and a private feedback form. Customers who had a bad experience may choose the private channel on their own. You didn't route them there by screening. The FTC's standard is about what the business controls, not about what the customer chooses.
Three properties define a compliant routing flow.
First, every customer can reach a public review platform directly from the review request, not conditionally, not after passing a rating gate. One tap from the text or email should be enough.
Second, private feedback is offered as an alternative, not imposed as a filter. "Here's where to tell us privately" is fine. "We noticed you rated low so we're not asking you for a public review" is not.
Third, you ask every customer, not a pre-screened subset. You can suppress requests for customers who have not had a transaction, customers who are outside a geographic area, customers whose jobs are not yet closed. You cannot suppress based on predicted sentiment.
Penalties and enforcement posture
The FTC's enforcement history on reviews has been active. Before the rule formalized, the agency settled cases with large retailers, review platforms, and local service businesses. The rule adds civil penalties to the toolkit, which means the FTC can now recover money without the lengthy process of proving individual consumer harm.
The $53,088-per-violation figure is the 2024 adjusted ceiling. For a contractor running a pre-screening flow across 1,000 jobs per year, the exposure is theoretically $53 million per year. The FTC does not pursue every small business at maximum penalty, but the calculation matters for a different reason: it sets the negotiating floor in any enforcement proceeding.
More practical than federal enforcement in the near term: state attorney general offices, the FTC's complaint referral process, and class action plaintiff attorneys who have begun filing cases around the Endorsement Guides violations that the rule codifies. A competitor who notices your 4.9 average looks suspicious relative to your Yelp profile can file a complaint that triggers a review.
The Google policy layer
The FTC rule is not the only compliance source. Google's own policies on review solicitation have tightened in parallel, and they carry their own enforcement mechanism: profile suspension.
Google's current policy prohibits "attempting to solicit reviews only from customers who had a positive experience." That language matches the FTC standard almost exactly. Enforcement is algorithmic rather than regulator-driven, which means detection is faster and penalties land without a warning letter.
A Google review profile that was built through a gating flow may be flagged under the updated detection systems even before a formal FTC complaint. The profile suspension doesn't require a complaint to trigger, just a pattern that matches what their classifiers are trained to catch.
Building the compliant system
A compliant review solicitation system for a contractor operation has six components.
Automated send to every closed job. The trigger is job closure, not sentiment pre-screening. When a job closes, every customer gets the request. No exceptions for customers who might be unhappy.
Both channels visible in the same message. The review request presents the Google review button and a "share feedback privately" option in the same text or email. The customer chooses; you don't choose for them.
No internal rating gate. The only acceptable pre-condition for triggering the review request is transactional: did the customer have a job, did the job close? Not: did they rate the job positively in a pre-survey?
Timing at the right moment. The highest-converting window for review requests in home services is the period between job completion and roughly 30 minutes afterward, while the tech is still on-site or has just left. A real-time SMS triggered by the tech marking the job done in the field app is the standard pattern.
Private feedback captured and acted on. Customers who use the private channel need a real response loop. This is the operational value: unhappy customers who choose the private channel give you information. A CRM workflow that routes private feedback to a manager creates the customer recovery opportunity.
Compliance log. Document that you ask every customer. A simple export of who was asked, on what date, tied to which job, creates the evidence base if you are ever asked to demonstrate compliance.
The vendor selection question
If you are evaluating review software, the compliance question is worth asking directly: does your platform pre-screen customers before sending the public review request?
Several vendors will say no while still offering a configurable threshold in the settings. Ask to see the customer journey end-to-end, not the marketing description. A compliant platform should show you a flow where every customer, regardless of internal rating, receives the request with both a public review option and a private feedback option in the same message.
Platforms that use the words "protect your reputation" to describe their review solicitation flow are typically describing a gating feature. The protection they offer is a cleaner star average; the cost is a selected sample and legal exposure.
GoodMarks routes rather than gates, the architecture was designed around the FTC standard. Every customer in a job list gets the request; the routing gives them a choice rather than making it for them. The how it works page has the specific mechanics. If you want to see the flow before signing up, the trial is free, no card required.
This post was originally published at https://getsignalroute.com/blog/ftc-consumer-reviews-rule-compliance-guide-contractors.
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