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New York Cracking Down on Businesses that Post Fake Online Reviews
Author: Scarinci Hollenbeck, LLC
Date: October 25, 2013
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Have you ever read a glowing online review of a competing business and wondered how they did it? There is a good chance the post is fake, according to New York Attorney General Eric Schneiderman.
The NY Attorney General recently announced the results of a yearlong undercover operation targeting the manipulation of consumer-review websites like Yelp, Google Local, and CitySearch. It found that paid workers in countries like the Philippines and Bangladesh are behind many online reviews.
The investigation resulted in settlements with nineteen companies who engaged in “astroturfing,” defined as “[t]he practice of preparing or disseminating a false or deceptive review that a reasonable consumer would believe to be a neutral, third-party review.” Penalties assessed totaled more than $350,000, which included individual fines ranging from $2,500 to just under $100,000.
“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,” Schneiderman stated.
Online review websites are also cracking down on phony online reviews. Yelp recently launched a lawsuit against a San Diego law firm that allegedly had its own employees write reviews and participated in an arrangement with other local law firm firms where they provided each other positive reviews.
The moral of the story for your New York business— online reviews are largely out of your control. While you may be able challenge the veracity of statements that are posted, the best defense is a good offense. Providing a quality product or service along with excellent customer service is the most effective way to drum up positive reviews.
If you have any questions about the investigation or would like to discuss the legal issues involved, please contact me, Fernando Pinguelo, or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Corporate Transactions & Business
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