The FTC has issued two administrative complaints and proposed orders enforcing the Consumer Review Fairness Act (CRFA) against the home rental companies Shore To Please Vacations LLC and Strafford Property Management LLC. These actions follow three in May also enforcing the CRFA.
In one complaint, the FTC alleged that Shore to Please included a provision in its online contract that said "[b]y signing below, you agree not to defame or leave negative reviews (includes any review or comment deemed to be negative by a Shore to Please Vacations LLC officer or member, as well as any review less than a "5 star" or "absolute best" rating) about this property and/or business in any print form or on any website...." Breach would cost a consumer $25,000 in liquidated damages.
In the other complaint, Strattford Property was alleged to use a contract for prospective renters that included the following language, "[t]he Applicant ... specifically agrees not to disparage [Staffordshire], and any of its employees, managers, or agents in any way, and also agrees not to communicate, publish, characterize, publicize or disseminate, in any manner, any terms, conditions, opinions and communications related to [Staffordshire], this application, or the application process..." Breach would subject a renter to damages.
Each proposed consent order includes injunctive relief related to the use of form contract terms that prohibit, restrict, penalize, or transfer rights in consumer reviews from consumers to the companies. The orders also require the respondents to notify affected consumers that the challenged contract provisions are void, and that they have the right to post honest reviews online.
It seems unlikely that the FTC is done with enforcement actions under the CRFA. Last month, it was HVAC, flooring and horseback riding tours. This month, it's vacation and rental homes. Who next?
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