New York regulators will announce on Monday the most comprehensive crackdown to date on deceptive reviews on the Internet. Agreements have been reached with 19 companies to cease their misleading practices and pay a total of $350,000 in penalties.
The yearlong investigation encompassed companies that create fake reviews as well as the clients that buy them. Among those signing the agreements are a charter bus operator, a teeth-whitening service, a laser hair-removal chain and an adult entertainment club. Also signing are several reputation-enhancement firms that place fraudulent reviews on sites like Google, Yelp, Citysearch and Yahoo.
A phony review of a restaurant may lead to a bad meal, which is disappointing. But the investigation uncovered a wide range of services buying fake reviews that could do more permanent damage: dentists, lawyers, even an ultrasound clinic.
“What we’ve found is even worse than old-fashioned false advertising,” said Eric T. Schneiderman, the New York attorney general. “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.”
Investigators working for Mr. Schneiderman began by posing as the owner of a Brooklyn yogurt shop that was the victim of unfair reviews. Could the reputation management firm gin up some good reviews to drown out the naysayers?
All too often the answer was yes. The investigation revealed a web of deceit in which reviewers in Bangladesh, the Philippines and Eastern Europe produced, for as little as a dollar a rave, buckets of praise for places they had never seen in countries where they had never been.
In some cases, the reputation shops bribed their clients’ customers to write more fake reviews, giving them $50 gift certificates for their trouble. They also went on review sites that criticized their own fake-review operations and wrote fake reviews denying they wrote fake reviews.
The investigation was aimed at companies based in New York, but it will have a wider reach. “This shows that fake reviews are a legitimate target of law enforcement,” said Aaron Schur, senior litigation counsel for Yelp, which has taken an aggressive approach in screening out reviews it believes to be false. Yelp recently sued a California law firm for writing fake reviews of itself.
Within recent memory, reviewing was something professionals did. The Internet changed that, letting anyone with a well-reasoned opinion or a half-baked attitude have his say. Web sites loved this content, because it was free. So consumer reviews became ever more ubiquitous — and influential.
Reviews persuade people to try a new resort or shun an old restaurant. They sell books and the devices the books are read on. They influence the choice of garden tools, plumbers, high fashion and, increasingly, doctors. If you provide a service or sell a product and you are not reviewed, you might as well not exist.
In a 2011 Harvard Business School study, a researcher found that restaurants that increased their ranking on Yelp by one star raised their revenues by 5 to 9 percent. A 2012 Gartner study estimated that one in seven recommendations or ratings on social media sites like Facebook would soon be fake. And there have been instances where all the reviews of a product have been secretly bought and paid for by the seller of the product.
Some retailers and other sites that feature many reviews have largely ignored the problem, perhaps not wanting to scare away real customers. Others have been like Yelp and been more forceful in addressing the problem.
But the New York investigation shows that the fakers are constantly increasing in sophistication. “Do not make them sound like an advertisement,” one firm investigated by the attorney general cautioned its writers. Another boasted of using multiple computers to foil suspicions that arose when more than one review came from the same machine. A third talked of outwitting Facebook.
“Sadly, it will take continued policing, both by law enforcement and the review sites themselves, to make sure some businesses stop lying to customers they claim to serve,” Mr. Schneiderman said.
Fake reviews undermine the credibility of the Internet. Olivia Roat, a marketing consultant for Main Street Host, a Buffalo digital marketing agency, discussed her growing realization that fake reviews are omnipresent on the company’s blog last year. “Say it ain’t so!” she wrote. Who, she wondered, could be trusted?
Apparently not Main Street Host, which was one of the 19 companies that signed an agreement to desist. The agreement says Main Street Host “engaged in astroturfing on behalf of over 30 clients,” using a term referring to writing fake reviews. Executives there could not be reached for comment on Sunday.
For the service companies, buying reviews seems a shortcut to the better reputation they are unlikely to achieve on their own.
US Coachways, another company in the investigation, is a charter bus service based in Staten Island. If a prospective customer were to look on Yelp, she might get the sense that this is not an outfit she would want to hire.
“This company basically ruined what was otherwise a great trip,” wrote a typical reviewer in 2012. Currently, the company has 14 reviews averaging one star. It is not possible to get much lower than this.
Edward Telmany, US Coachways’s chief executive, was upset about the low ratings, according to the formal Assurance of Discontinuance he signed with the attorney general’s office.
“We get bashed online,” Mr. Telmany wrote, accurately, to his employees on Nov. 20, 2011. “We are loosing [sic] money from this.”
His response was not to fix the problems that customers were citing, like buses never showing up, but to begin a full-fledged effort to get fake reviews. Mr. Telmany hired freelance writers, mandated that his employees write favorable reviews and even pitched in himself. He posted a five-star review on Yelp that began, “US Coachways does a great job!”
Neither Mr. Telmany nor a spokesman for US Coachways could be reached for comment on Sunday. The company agreed to pay $75,000 in fines and stop writing fake reviews.
Faking reviews often begins with faked reviews of the company faking the reviews. In October 2010, a review appeared on Yahoo that said the writer was “thrilled” by the services provided by Main Street Host. He added that he just didn’t understand “why this company gets all the negative reviews.” He also said, “for the record, I am not a Mainstreethost.com employee, don’t know anyone who is, and have no knowledge of anyone else’s experience but my own.”
The review was, of course, by a Main Street Host employee. The company agreed to a $43,000 fine. LINK
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