Fake Reviews Hurt Everyone, and Now the FTC is Cracking Down

February 17, 2019 11:25 am Comments Off on Fake Reviews Hurt Everyone, and Now the FTC is Cracking Down

Five-star ratings are an asset to a company’s reputation, but only when they aren’t bought and used to support erroneous claims, says Third Coast Interactive founder Steven Wyer. Unfortunately, despite Amazon’s 2016 rules banning paid-for reviews, the practice continues. In early 2019, the FTC made a stand by successfully suing Cure Encapsulations, a weight-loss supplement seller, for soliciting fake reviews and making unproven claims regarding its product. The suit was settled for $12.8 million.

Fake reviews run rampant on Amazon. This is alarming because the US-based super-seller dominates the online market, with around a quarter of all e-commerce transactions taking place on the Amazon platform. In 2018, Amazon sales topped $193.2 billion. By comparison, the next highest-selling online merchant was Walmart with numbers just under $17 billion. Each one of those transactions offers the opportunity for customer feedback in the form of a submitted review.

Why are fake reviews so bad?

Since the dawn of time, we have utilized other people’s experiences with a product or service to make an informed decision. This used to take place in person via word-of-mouth. Now, we have grown accustomed to looking to the Internet for suggestions and information on everything, including health supplements. When reviews are bought, the products in question are rarely actually tested or used by the “reviewers.” Instead, they are given a hefty discount or reimbursed the full price plus an added financial incentive to buy on Amazon and leave a review. Often, these are scripted and the company demands a four- or five-star rating. 

In the case of Cure Encapsulations, these reviews might lead others to invest in the product, which the manufacturer boldly claimed, “Literally blocks fat from forming.” According to the FTC, there is no credible data to back up that statement. In other words, people are buying this in the hopes of taking control of their health only to ingest ingredients that, at best, don’t work. 

An impact on small businesses

Steven Wyer says another issue with an excess of fake reviews is that it can push sub-par products to prime search result spots. Reviews and purchase activity drive product ranking on Amazon, Google, and other selling platforms. When deceitful sellers, who are often HQed outside the US, pay for this activity, it blocks small businesses from attaining a spot in the public’s eye. The vast majority of searchers stop with the top few results. If the entire first page is saturated with puffed up products, smaller companies’ products get pushed to page two and beyond where few shoppers venture. 

Amazon is proactive, but it’s not enough

In 2016, Amazon put measures in place to cut down on fake and paid reviews. It stopped sellers from offering 99-percent-off coupons, formerly the most popular means of delivering “free” products, and tweaked its flagging algorithm to better identify potentially misleading reviews. Amazon now freezes seller accounts when illegal activity is suspected. It also restricts buyers from leaving public feedback when their reviews do not meet Amazon’s ethics standards.

Despite this strategy, companies continue to circumvent the system. Many still offer discount coupons and, even though they must claim the discounts are not in exchange for a rating, they will monitor user accounts. If reviews are not left, they will suspend that buyer’s access to future discounts. 

Even more concerning is that fake reviews can be used as a weapon. Steven Wyer says businesses have actually taken to leaving or buying fake five-star reviews for their competitors. These reviews get flagged, and the seller is banned from the Amazon marketplace. This can ruin a small business. It happened to firearms accessory seller Josh Plansky in 2018. He awoke one morning to discover more than a dozen glowing reviews. As a very small seller, this was unusual. He reported the suspicious reviews to Amazon. They were removed, and then so was his business. He lost access to the Amazon account, and his listings were wiped away, leaving digital shelf space open for the seller who sabotaged his business. 

Don’t believe what you read

Wyer says that spotting fraudulent reviews can be difficult. But there are a few telltale signs that the words on the screen are scripted. A product with thousands of high ratings should raise an eyebrow, especially if it has only been available on Amazon for a short time. Reviews that are clumped together in groups of one or two days with few reviews in between are also likely paid for. Buyers should look for reviews that seem to say the same thing or are written in broken English. Finally, if the reviews sound too good to be true, they probably are. 

Fake reviews hurt both buyers and honest sellers. But until the e-commerce world finds a way to weed out unscrupulous sellers entirely, it’s up to each of us to listen to our instincts and keep browsing when things don’t quite add up.

The Review Solution

The following two tabs change content below.

Steven Wyer

Chief Operating Officer at The Review Solution
Steven Wyer is the Chief Operating Officer of Third Coast Interactive, Inc. and the author of Violated Online. As COO of Third Coast Interactive, Steven Wyer oversees platform development, sales, marketing and internal operations. These responsibilities include global expansion into targeted vertical markets that can best leverage the power of The Review SolutionTM, a service that offers consumers a convenient way to post online reviews for local, regional and national businesses.