© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: September 24, 2013 12:20 am
New York regulators set up a fake yoghurt shop in Brooklyn as part of a sting operation to ensnare companies posting false online reviews.
The state attorney-general’s office said a year-long investigation, dubbed Operation Clean Turf, resulted in a settlement with 19 companies to cease the manipulation of consumer-review websites.
Businesses including a charter bus operator, a teeth-whitening service, a laser hair-removal chain and an adult entertainment club have agreed to pay a total of $350,000 in penalties in the most wide-ranging crackdown to date on deceptive comments on the internet.
In 2009, the New York attorney-general’s office fined Lifestyle Lift $300,000 for allegedly making employees post fake positive reviews online about its plastic surgery services, offered at 40 locations across the US.
Legacy Learning Systems, which sells guitar lesson DVDs, paid $250,000 in penalties in 2011, after federal regulators accused the company of deceptive advertising. It had hired affiliate marketers to pose as independent consumers on review sites.
Several reputation management firms were involved in the New York settlement for their role in flooding the internet with fraudulent reviews on websites such as Yelp, Google Local, and CitySearch for their clients. They created false online profiles and paid freelance writers from as far away as the Philippines, Bangladesh and eastern Europe as little as $1 to write false comments.
The practice of preparing or disseminating a deceptive review that a reasonable consumer would believe to be a true is a form of false advertising known as “astroturfing.”
While the sting was aimed at companies based in New York, it is thought it could have a wider reach.
Representatives from the office of the New York attorney-general, Eric Schneiderman, posed as the owners of a yoghurt shop requesting assistance in combating negative reviews. As part of their reputation management services, companies offered to write fake reviews and post them on consumer reviews websites.
The reputation management industry has exploded as businesses have become increasingly concerned about their online reputations as more consumers are turning to the internet for recommendations before making daily purchasing decisions such as where to eat, shop and travel.
“Consumers rely on reviews from their peers,” Mr Schneiderman said. “This investigation into large-scale, intentional deceit across the internet tells us that we should approach online reviews with caution.”
The investigation also found some fraudulent writers defended their fake reviews on websites, denying the deception. Mr Schneiderman’s office discovered solicitations on sites such as listings service Craigslist and outsourcing marketplace Freelancer to hire people to write fake reviews.
Yelp welcomed the crackdown, saying it was critical that the company protect the integrity of its content. The review site has touted its own automated quality algorithm, which has suppressed 25 per cent of the 42m reviews submitted to the site.
However, business owners have complained that real reviews also get filtered in the process and there is no recourse to have them reinstated.
“No human can filter or unfilter a review,” Yelp said in an email to the FT, acknowledging that the algorithm “sometimes filters perfectly legitimate reviews . . . but it’s the high cost we have to pay in order to make sure that the majority of the content on the site is as useful as possible to consumers.”
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in