President Obama signs the “Consumer Review Fairness Act of 2016”

On Thursday, December 15, 2016, President Obama signed into law H.R. 5111, now officially titled the “Consumer Review Fairness Act of 2016.” The substantive provisions of the bill, which we discussed in a previous post, are virtually unchanged, but the law’s text provides further details regarding enforcement by the Federal Trade Commission and the states.

One noteworthy enforcement feature of the law is a cross-reference to the Federal Trade Commission Act. A violation of the Consumer Review Fairness Act of 2016 by offering a form contract containing a provision described as void in the law is also a violation of 15 U.S.C. 45(a)(2), which essentially prohibits unfair or deceptive acts or practices.

The law also provides the attorney general of any State the right to bring a civil action, as parens patriae, on behalf of the residents of the State in an appropriate United States district court, but with this right comes requirements in which the attorney general must give notice to the Federal Trade Commission.

The law requires the Federal Trade Commission to conduct education and outreach that provides businesses with best practices for compliance with the Act, and this outreach must be commenced within 60 days after the enactment of the law.

For compliance purposes, the law is effective with respect to contracts in effect on or after 90 days after December 15, 2016 (in other words, March 16, 2017). The enforcement provisions, however, are effective only with respect to contracts in effect on or after one year after December 15, 2016.