New York State Attorney General Eric Schneiderman yesterday announced a major crackdown on companies creating false online reviews for products and services.
According to reports, the AG settled cases with 19 New York companies that were allegedly paying people in the Philippines, Bangladesh, and Eastern Europe to write fake reviews on such sites as Yelp, Google Local, and CitySearch. The companies, which were snared after a year-long investigation, will each pay between $2,500 and $100,000 apiece in penalties, totaling more than $350,000. The people writing the fake reviews were reportedly paid between $1 and $10 for each review.
The companies caught in the sting include several search engine optimization firms and some of the companies–including spas, nightclubs, restaurants, dental clinics, a plastic surgeon, a cosmetics firm, a charter bus company, and several others–that paid for their fake reviews.
Schneiderman’s office contends that the practice, which is being called “astroturfing” after the synthetic grass-like material used on some athletic fields, violates multiple state laws against false advertising and engages in illegal and deceptive business practices.
The investigation revealed that some SEO companies were using advanced IP spoofing techniques to hide their identities and setting up hundreds of bogus online profiles on consumer review Web sites to post the reviews.
“Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” Schneiderman said in a statement. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution. And companies that continue to engage in these practices should take note: “Astroturfing” is the 21st century’s version of false advertising, and prosecutors have many tools at their disposal to put an end to it.”
The impact of false online reviews on businesses can be significant, and in the case of some businesses, could be dangerous. Several recent studies have shown that 90 percent of consumers say positive online reviews influence what they buy.
According to the reports, Schneiderman’s office set up a fake yogurt store in Brooklyn, N.Y.,and then sought out firms to help boost its rating on search engines with fake reviews.
Yelp, one of the sites where the fake reviews were found, applauded the action, saying it goes a long way toward protecting the integrity of the content on its site. Yelp, like several other review sites, has already implemented filters to detect and filter or delete fake reviews, but they’re not perfect.
“More than 100 million visitors come to Yelp each month, making it critical that Yelp protect the integrity of its content,” said Aaron Schur, Yelp’s senior litigation counsel, in a statement. ”We take many steps to do this, including the use of automated filtering software, leveraging our vast user community for tips about suspicious content, undercover sting operations, legal action, and cooperation with law enforcement. We applaud NY Attorney General Schneiderman for his willingness to tackle the issue of illegal fake reviews head on, and for his success in shutting down these operators. We look forward to continuing to cooperate with the New York Attorney General’s office and any other interested law enforcement office or regulator to protect consumers and business owners from efforts to mislead.”