On February 3, 2020, the FTC announced a $350,000 settlement with Shop Tutors Inc., d/b/a LendEDU, a website that ranks and rates consumer financial products such as student and personal loans. The FTC’s complaint alleged that LendEDU and its principals violated the FTC Act by misleading consumers into believing that their website offered consumers “objective,” “accurate” and “unbiased” information, despite the fact that the company was alleged to be selling rankings and ratings to the highest bidder. The FTC also alleged that LendEDU touted unbiased positive reviews of its website, when the vast majority of those reviews had been written by persons closely associated with the company or were altogether fabricated.
In a concurring statement, FTC Commissioner Rebecca Kelly Slaughter highlighted the importance of the Commission’s action “addressing a cutting edge market practice that [she] fear[s] is becoming increasingly common online: purportedly neutral rankings and recommendations that actually reflect paid product placement.” Further, Commissioner Slaughter warned companies “engag[ing] in pay-to-play rankings and rating” to “take heed” that their conduct violates the law and “will result in serious consequences.” This case follows similar FTC actions from last year aimed at curbing the use of biased endorsements.