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October 24, 2014

Fake Online Reviewers Face Penalties

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Fake Online Reviewers Face Penalties

Companies are soliciting or even paying others to give them praises online. But states and review sites are cracking down on what they say is a growing problem with fake online reviews. 

Fake reviews are growing. In 2012, a Gartner study predicted that one in seven recommendations or ratings on social media sites, such as Facebook, would be fake. While some companies use more formal reputation-enhancement services, others hire writers to post glowing reviews. Raters based in foreign countries can be hired for as little as a dollar to review products or services that the reviewer has never used before. The fraudulent posters will create raving reviews on Google, Yelp, Citysearch, Yahoo, and other sites. 

New York regulators will announce on the results of a yearlong investigation into fraudulent online reviews this week. The investigation has resulted in agreements with 19 companies that are accused of creating fake online reviews to try to lure customers. The companies will pay a total of $350,000 in penalties. 

“What we’ve found is even worse than old-fashioned false advertising,” says Eric T. Schneiderman, the New York attorney general. “When you look at a billboard, you can tell it’s a paid advertisement — but on Yelp or Citysearch, you assume you’re reading authentic consumer opinions, making this practice even more deceiving.”

Consumer reviews can be influential, persuading people to use certain products or services. For example, a 2011 study by the Harvard Business School found that restaurants that increased their ranking on Yelp by one star were able to increase their revenues by 5 to 9 percent.

New York’s investigation into fake online reviews “shows that fake reviews are a legitimate target of law enforcement,” says Aaron Schur, senior litigation counsel for Yelp. Yelp says it tries to screen out from its site any reviews it believes are false. It recently sued a California law firm for posting a fake review that praised itself. 

Fake reviewers are getting sophisticated in their postings, making it more difficult to weed them out. Some are coached to not make the review sound too much like an advertisement or to even use multiple computers so no one would be suspicious why multiple reviews came from one computer. 

Source: “Give Yourself 5 Stars? Online, It Might Cost You,” The New York Times (Sept. 22, 2013)

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