New York to Crack Down on Fake Online Reviews

Tuesday, September 24, 2013

State officials in New York have decided to go after deceptive reviews on the Internet by targeting companies that produce them and businesses that purchase them.


Regulators spent a year looking for some of the biggest culprits, and found at least 19 companies that participated in the misleading practice. The state has already doled out $350,000 in fines.


The buying or selling fake reviews included businesses that perform dentistry, offer legal services and provide bus transportation.


Many of the reviews wound up on popular websites consumers rely on, like Yelp, TripAdvisor, Citysearch Google and Yahoo.


“What we’ve found is even worse than old-fashioned false advertising,” Eric T. Schneiderman, the New York attorney general, told The New York Times. “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.”


The investigation revealed that fake reviews were often written in other countries, including Bangladesh and the Philippines, where individuals sold them for as little as one dollar each.


Businesses are often tempted to purchase fraudulent feedback for their websites because higher rankings can often mean more customers. For instance, a bump in just one star on Yelp can result in a 5%-9% increase in revenues, according to a 2011 Harvard Business School study.


New York officials weren’t the first ones to crack down on the practice.


In July, the website filed a lawsuit to stop spammers from flooding its ratings service with fake reviews of car dealerships.


The litigation specifically targeted Humankind, an online reputation company based in Texas, whose websites sold made-up reviews starting at $25 a pop.

-Noel Brinkerhoff


To Learn More:

Give Yourself 5 Stars? Online, It Might Cost You (by David Streitfeld, New York Times)

Alleged Fake Online Review Spammers Get Taken to Court (by Brad Tuttle, Time)

Income Opportunity: Writing Fake Internet Reviews (by Noel Brinkerhoff, AllGov)


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