As we approach the end of the year, the FTC has been active in the consumer protection arena, reopening and setting aside a consent order due to President Trump’s AI Executive Order, analyzing consumer losses to rental scams, and warning companies about possible violations of the new Consumer Review Rule. More on these stories after the jump.
Monday, December 22, 2025
Bureau of Consumer Protection: Technology; Advertising and Marketing; Endorsements, Influencers, and Reviews; Artificial Intelligence
- The FTC issued an order to reopen and set aside a 2024 final consent order with Rytr LLC consistent with the Trump Administration’s Artificial Intelligence Executive Order and America’s AI Action Plan. The 2024 final consent order against Rytr settled allegations the FTC had outlined in its 2024 complaint that Rytr’s artificial intelligence-enabled writing assistance service had allowed subscribers to generate false and deceptive online reviews in violation of the FTC Act. The final consent order, among other conditions, banned Rytr from providing any AI-enabled service generating consumer or customer reviews or testimonials. Following the issuance of President Trump’s Executive Order on AI, the Commission reviewed the case and determined that the complaint failed to satisfy the legal requirements of the FTC Act and that the order unduly burdens AI innovation. The FTC press release states that after reviewing the final order in response to President Trump’s AI Action Plan, the FTC found that the facts alleged in the complaint failed to support allegations that Rytr violated Section 5 of the FTC Act and that, “because the order unduly burdens innovation in the nascent AI industry, it is in the public interest to set it aside.” The Commission vote to issue the order reopening and setting aside the final decision and order was 2-0.
Bureau of Consumer Protection: Housing; Advertising and Marketing
- The FTC released an analysis, as part of its Consumer Protection Data Spotlight, finding that consumers have lost millions of dollars to rental scams, underscoring a significant and growing threat in the housing market. The FTC’s data reveals that fraudsters frequently exploit rental listings to deceive renters into paying deposits or rent for properties that do not exist or are not legitimately available. These scams have intensified with the increased reliance on online platforms for property searches. The scams take different forms, including pressuring consumers to pay money upfront before seeing the property in person, pushing consumers to provide screenshots of their credit score, sending consumers links to sign up for a credit check but that actually enroll the consumer in a paid membership, or collecting personal information from consumers such as their social security number. The FTC encourages consumers to search for the rental property to verify the price and contact information, avoid sharing personal information until there is an agreement to rent a property, and check out typical rents. For clients involved in real estate or property management, this report highlights the importance of robust fraud prevention measures and consumer education to mitigate financial losses and avoid legal liabilities related to deceptive rental practices.
Bureau of Consumer Protection: Consumer Review Rule; Advertising and Marketing; Endorsements, Influencers, and Reviews
- The FTC has issued warning letters to 10 companies regarding potential violations of its new Consumer Review Rule, which bans deceptive or unfair practices concerning the use of product reviews in advertising and marketing. The Rule forbids reviews or testimonials that falsely depict a reviewer’s experience, whether positive or negative, or falsely claim that the reviewer has used the product or service. Additionally, businesses cannot tie employee compensation or incentives to the expression of a specific opinion, positive or negative, and employees must disclose when reviews are authored by employees or their immediate family members. The Rule also includes provisions about websites controlled by companies for reviews, the suppression of certain reviews, and the improper use of social media metrics like follower counts or view numbers. Though the letters are not formal determinations, they were based on consumer complaints and warn the companies that Rule violations can result in the filing of a federal lawsuit or other legal action, as well as civil penalties of up to $53,088 per violation. For more information, see Crowell & Moring’s client alert, Keeping it Real: FTC Targets Fake Reviews in First Consumer Review Rule.