False Online Reviews Cost Businesses
Many businesses have taken the road of deception, in order to obtain 5 stars in the online review world. However, these cheap marketing practices are costing businesses, as review sites begin to crack down on fraudulent reviews.
While it is great that more businesses understand the power of positive online reviews, these businesses are taking it too far. New York regulates announce that the current investigation for fraudulent reviews is more comprehensive than ever before. “Advertising disguised as editorial is an old problem, but it’s now presenting itself in different ways,” said Mary K. Engle, the Federal Trade Commission’s associate director for advertising practices. “We’re very concerned.”
The following stories show what can happen when businesses use incentivized and fake reviews in order to boost their own sales:
Business Pays $250,000 for Incentivized Reviews
Offering a refund to customers in exchange for a positive review is clearly a violation of ethical reviewing practices. VIP Deals created a rebate on Amazon.com for customers who bought a Kindle Fire case. Hundreds took to the “deal” by proclaiming that the leather case was a marvel. In actuality, VIP Deals was offering refunds for customers to write the review. In the letter enclosed in the shipment, it read: ““We strive to earn 100 percent perfect ‘FIVE-STAR’ scores from you!”
Under F.T.C. rules, it must be fully disclosed when there is a connection between a merchant and a promoter or a reviewer and it affects the endorsement’s credibility. In a similar case, Legacy Learning Systems has to pay $250,000 to settle charges for incentivized reviews.
19 Businesses pay $350,000 in Penalties for Misleading Marketing Practices
19 businesses were caught in a yearlong investigation to crack down on businesses manipulating the online review system. In total, the businesses had to pay out $350,000 in fines for fake review. Review sites, such as Google, Yelp, and CitySearch, joined with investigators to stop unfair reviews.
Investigatory reports now are showing that many of the reviews actually come from countries, like Bangladesh and Philippines, where reviewers get paid $1 or more for their positive reviews on products or services they’ve never even seen. Some reviewers even made fake reviews in order to deny that they were false in the first place.
“What we’ve found is even worse than old-fashioned false advertising,” said 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.”
US Coachways Mandates Employees to Write Favorable Reviews
“We get bashed online,” Edward Telmany, US Coachways’ chief executive wrote to his employees on Nov. 20, 2011. “We are loosing [sic] money from this.” He then proceeded to mandate employees to write favorable reviews, hired freelance writers to write them, and even wrote a five-star review himself. US Coachways agreed to pay $75,000 in fines and to stop writing the reviews.
Main Street Host had to pay a $43,000 fine for a review that was a blatant lie. A Main Street Employee was caught reviewing his own company. He wrote on Yahoo that he didn’t understand “why this company gets all the negative reviews.” He also added, “for the record, I am not a Mainstreethost.com employee, don’t know anyone who is, and have no knowledge of anyone else’s experience but my own.”
Businesses should be cautious to ensure that none of their online reviews are incentivized, or else they risk being charged the penalty fines. The false laudatory reviews are undermining the credibility and power of online reviews. Customers won’t know what is real and what is a paid review. It’s the case of the boy who cried wolf and these fake reviews are simply going to discredit the real ones.
“Sadly, it will take continued policing, both by law enforcement and the review sites themselves, to make sure some businesses stop lying to customers they claim to serve,” Schneiderman said.