Fake online reviews get reality check

But a recent crackdown by authorities in New York could be the shock needed for the online sector to clean up its act.

The New York state attorney general's office recently ordered 19 companies to halt these practices and pay fines totaling US$350,000 to settle charges of manipulating online reviews for sites such as Yelp, Google+ and others.

The settlement stemmed from an undercover investigation in which officials created a fake yogurt shop in Brooklyn and sought help in marketing from so-called "search engine optimisation" firms that work to boost a company's online presence.

The investigators discovered online advertisements such as this one: "Hello. We need someone to post one or two reviews daily on sites like: Yelp, Google reviews, Citysearch and any other similar sites. We will supply the text/review. We are offering US$1.00 for every post."

The companies hired writers from as far away as the Philippines, Bangladesh and Eastern Europe, according to the investigators.

"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing," state Attorney General Eric Schneiderman said.

Large scale deceit

"This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution," he said.

While the extent of fake reviews is not clear, a 2012 report by the research firm Gartner concluded that between two and six percent of online reviews are "fake or deceptive," and predicted this will grow to around 10% by 2014.

The prevalence of fake reviews is due to the high stakes involved.

The Gartner report said some 31% of consumers use online review because they find the opinions of a person like themselves to be more credible than advertising.

Gartner said studies from a number of university researchers suggest that positive reviews can provide a shot in the arm for many kinds of businesses, from hotels to restaurants to doctors or lawyers.

"In the hospitality industry, you are more likely to see bookings go up when you have better ratings," said Jenny Sussin, a Gartner analyst and co-author of the report.

Reviews make an impact

"For restaurants, a half-star increase in the review average can cause 7:00 pm bookings to go up by between 30% and 50%," she said, adding that fake reviews can be used by small family operations to Fortune 500 companies. In addition to positive reviews, some fake reviews, which are extremely negatives, are posted and are aimed at driving business to a competitor.

She said the review business has turned into a cottage industry, with writers in places such as India or the Philippines paid as little as from US$1 to US$5 per review. In other cases, some employees or customers are offered incentives such as gift certificates for reviews, which is also considered deceptive or illegal.

Duncan Simester of the Massachusetts Institute of Technology and Eric Anderson of Northwestern University found that five percent of reviews for a major apparel maker came from people with no record of purchasing that product.

These questionable reviews were "significantly more negative" than the average, the researchers found, but the motivations were not clear.

"These deceptive reviews are written by loyal customers," they wrote in a research paper submitted to an academic journal.

"One explanation for the data is that loyal customers may be acting as self-appointed brand managers. An alternative explanation is that the deceptive reviews are contributed by reviewers who seek to enhance their perceived social status," the report claimed.

Source: AFP via I-Net Bridge