NY sting nets 19 firms for fake reviews
FAKE online product reviews have been around for years, fuelled by unscrupulous marketers seeking to boost sales. But a recent crackdown by the authorities in New York could be the shock needed for the online sector to clean up its act.
The New York state attorney-general's office recently ordered 19 firms to stop these practices and pay fines totalling US$350,000 (S$440,000) to settle charges of manipulating online reviews for sites such as Yelp and Google+.
The settlement stemmed from an undercover investigation in which officials created a fake yogurt shop in Brooklyn and sought help in marketing from so-called "search-engine optimisation" firms that work to boost a company's online presence.
The investigators discovered online ads such as this one: "Hello... We need someone to post 1-2 reviews daily on sites like: Yelp, Google reviews, Citysearch and any other similar sites. We will supply the text/review... We are offering US$1.00 dollar for every post."
The firms hired writers from as far away as the Philippines, Bangladesh and eastern Europe, according to the investigators.
Said state Attorney-General Eric Schneiderman: "This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution."
While the extent of fake reviews is not clear, a 2012 report by research firm Gartner showed that between 2 and 6 per cent of online reviews are "fake or deceptive", and this would grow to about 10 per cent by next year.
The prevalence of fake reviews is due to the high stakes involved. The Gartner report said some 31 per cent of consumers use online reviews because they find the opinions of a person like themselves to be more credible than advertising.
"In the hospitality industry, you are more likely to see bookings go up when you have better ratings," said Ms Jenny Sussin, a Gartner analyst and co-author of the report. "For restaurants, a half-star increase in the review average can cause 7pm bookings to go up 30 to 49 per cent."
Ms Sussin said the review business has turned into a cottage industry, with writers in places such as India or the Philippines paid as little as US$1 to US$5 per review. In other cases, some employees or customers are offered incentives, such as gift certificates, for reviews, which is also considered deceptive or illegal.
Yelp said recently its automatic filtering rejects about 25 per cent of submitted reviews. "Yelp has been on guard against these very same reviews from our earliest days," a blog post said.
The US Federal Trade Commission has also issued fines in such cases, based on its guidance that any payment for reviews or testimonials must be disclosed.
Google recently stopped allowing anonymous reviews, in part due to concerns about fakery.
While fake reviews are not always easy to spot, there are warning signs. Ms Sussin says that for hotels and restaurants, a lack of detail about the location could be a sign for caution.
A reviewer who comments on multiple, unrelated products or services can also be suspicious. Excessive use of superlatives can also be a sign of faking, Gartner said.
Websites often raise flags when they get large numbers of reviews at one time, or if one IP address is tied to multiple reviews in a short time period.