NY Attorney General Takes Steps to Combat Fake Social Media Reviews

Gartner predicts that by 2014 between 10% and 15% of social media reviews will be fake. This information was provided by the New York Attorney General’s office, which announced an agreement recently with 19 companies to stop them from writing fake online reviews.

 

New York Attorney General, Eric T. Schneiderman, stated that the companies would be required to pay penalties ranging from $2,500.00 to just under $100,000.00.  Many of the companies had apparently created fake online profiles on various consumer review websites, such as Yelp, Google Local and CitySearch, and outsourced the review writing to freelancers in the Philippines, Bangladesh and Eastern Europe.  The announcement said that the false reviews violated multiple state laws against false advertising and that the companies had engaged in illegal and deceptive business practices.

The announcement revealed that under the guise of a yogurt store, the AG’s office had contacted “leading SEO companies” in New York to request assistance in combating poor reviews on the consumer sites.  Some of the SEO companies responded by offering to write positive reviews on the company’s behalf, which they said fell under their reputation management services.  It was further revealed that several of  the SEO firms had been using advanced IP spoofing techniques to hide their identities and, moreover, were setting up hundred of fake profiles.

The practice of writing fake reviews that a reasonable consumer would believe has been prepared by a neutral third-party is referred to as “astroturfing.”  Interestingly, the AG’s announcement cited a 2011 Harvard Business School study that estimated a one-star rating improvement could translate to an increase of 5% to 9% in revenues for a restaurant. 

You can read the AG’s entire announcement here.