Client testimonials can be an extremely effective marketing tool to give validation and credibility to your website or social media page. As you begin your startup journey, showing that your product has real, positive feedback from customers gives some assurance to prospective customers about your product, and can impact customer decision making.
In an attempt to project validation to a consumer you may be tempted to ask a friend or family to write a testimonial for you, even if they haven’t used the product. You may even write one yourself posing as a satisfied customer of your product. These are what is known as fake testimonials. Fake testimonials are likely to be unlawful, can be damaging to both your brand and the consumer, and might attract the ire of Australia’s consumer law regulator, the Australian Competition and Consumer Commission (ACCC).
This blog is the third in a series on Marketing your Startup: Risks, Tips and Traps which will highlight some key risks which startups should watch out for and some tips to avoid the risk of a legal claim.
What is the risk?
Fake testimonials may lead a consumer to purchase a product due to the perceived popularity and quality of the business, which is misleading and deceptive conduct under sections 18 and 29(1)(e) of the Australian Consumer Law, and can carry hefty fines of up to $1.1 million for a corporation or $220,000 for an individual.
Here’s what the law states:
s 18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
s 29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services
If you think “how will the ACCC catch me, I’m just a small fish” there are many examples of the ACCC using its investigative and enforcement powers to catch and fine small businesses. In most cases authorities are alerted by competitors, and it’s just not worth the risk. Furniture removalist company Citymove are proof of this, copping a $30,600 fine for two fake Google+ reviews and one fake YouTube review following the issue of three infringement notices by the ACCC.
For more detail on the risks of misleading and deceptive conduct, see our blog here.
So, how can you legally use client testimonials on your website?
Quite simply, they must be real and genuine testimonials from real clients, and you should ask for the client’s approval before posting them on your website. You can do this by:
This is a simple, but effective guide to ensuring your testimonials are effective, and legal, on your website/social media pages.
We hope you enjoyed our third blog in a series of blogs about Marketing your Startup: Risks, Tips and Traps
Please see our other blogs in the series here.
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