In markets for products and services of ex-ante unverifiable quality, reputation can induce the production of high quality goods or services. However, producers may privately learn about future market trends and hence about the value of their reputation. I model this problem in a dynamic production economy. In the presence of sufficiently important private information about its own reputation, a producer cheats its customers instead of disclosing this information. Large expected reputation rents can act as a buffer and hence, the problem is more severe as competition intensifies. Surprisingly, in the presence of entry barriers, reputation failures are more likely to occur as producers that anticipate profits from cheating contemporaneously can price more aggressively. Several recent scandals such as the issuance of toxic mortgage products, inflated ratings on those as well rate manipulation are consistent with the model. Skin-in-the-game based policies such as product warranty, liability of accountants and retention of CDO first-loss pieces can prevent such reputation failures.