Intellectual Property Restaurant and Hospitality Law

Fake Five-Star Reviews on Yelp Lead to Six-Figure Fines

As I was reading this story in the NY Times on the subway, a young man next to me who was reading over my shoulder, said “Wow – if you can’t trust Yelp who can you trust?” Many young (and not so young) adults use Yelp, Citysearch, Yahoo and Google to help them decide where to eat, shop and which doctor to see. Positive reviews on Yelp in particular can drive customers to restaurants; a series of bad reviews can make a place go bust. So the news that companies were paying for good reviews undoubtedly sent shockwaves through the hipster culinary world.

As part of a year-long investigation, dubbed Operation Clean Turf, NY State officials posed as the owners of a Brooklyn yogurt shop that had garnered negative reviews online. Fake reviews, written in Bangladesh, the Philippines and Eastern Europe, were commissioned from reputation management firms for as little as a dollar a piece. The investigation found reputation companies even wrote fake reviews of their own businesses denying that they wrote fake reviews. Fake reviews by fake reviewers stating they don’t write fake reviews? When does the madness stop?

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

I had to look up “astroturfing” so I went to Wikipedia: “Astroturfing is the practice of masking the sponsors of a message (e.g. political, advertising, or public relations) to give the appearance of it coming from a disinterested, grassroots participant. Astroturfing is intended to give the statements the credibility of an independent entity by withholding information about the source’s financial connection. The term astroturfing is a derivation of AstroTurf, a brand of synthetic carpeting designed to look like natural grass.”

But Do They Really?
But Do They Really?
In 2009, the Federal Trade Commission (and many State governments) updated their false advertising laws to include internet astroturfing. The investigation found that companies were using advanced IP spoofing techniques to hide their identities, and had set up hundreds of bogus online profiles on consumer review websites to post the reviews. Companies advertised for fake reviewers on Craigslist and One firm required fake reviewers to have set up a Yelp account that was at least three months old and to have written at least 15 reviews before they were commissioned to write fake posts. A Harvard Business School study from 2011 estimated that a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenues for a restaurant. That’s a real boost for eateries and can save someone from bankruptcy.

Agreements totaling $350,000 in fines were reached with a charter bus operator, a teeth-whitening service, a laser hair-removal chain and an adult entertainment club. Schneiderman’s office found evidence that dentists, lawyers and an ultra-sound clinic had all commissioned fake reviews. Staten Island bus company US Coachways paid $75,000 in settlement. The company currently has a rating of one and half stars on Yelp, with one being the lowest possible rating. “NEVER, NEVER USE THESE GUYS!!!” one reviewer wrote in 2012.

According to Scheiderman Edward Telmany, US Coachways’s chief executive, wrote to staff in 2011 warning them that online criticism was hurting their business. “We get bashed online,” Telmany wrote. “We are loosing [sic] money from this.” Instead of paying the one dollar for a professional fake review, Telmany told his employees to write favorable reviews and posted a five-star review himself on Yelp that began: “US Coachways does a great job!” He commissioned freelance writers to write other positive reviews. The company agreed to pay $75,000 in fines and stop writing fake reviews. The fake reviews have been removed.

The NY AG report cites a statistic that says by 2014, “between 10% and 15% of social media reviews will be fake.” So, while these 19 companies are definitely a start, they also only scratch the surface. This could be good news for restaurant critics in mainstream media who seemed to be going the way of the buggy whip.

The next problem for Attorney General Schneiderman to solve is fake BAD reviews written by competitors or disgruntled employees. That could be alot harder to sort out.

5 replies on “Fake Five-Star Reviews on Yelp Lead to Six-Figure Fines”

Fake reviews occur for books at Amazon. Some companies advertise their prices, but the prices vary. It seems to me whenever I read “twists and turns” in a review, it’s probably a fake-by-formula. Then there are the friends and family who post five-star reviews for books that are filled with poor grammar, poor punctuation, and often lack of research for an area that requires accuracy. Some books have all three problems (and, of course, no editor other than sis or mom).

Whenever I see dozens of reviews, sometimes more than one hundred, I figure there are many that were purchased. And either the rave is from a reviewer who never read the book or a reviewer who rarely reads, thus has no concept of quality,

“between 10% and 15% of social media reviews will be fake.”

I’m surprised it isn’t higher though the number might depend on the definition of “fake”. For example: I have been sent coupons or samples of items (e.g. in expensive low-end frozen pizza) and then mentioned them at my blog. In some cases, the stuff was just neutral and I said so. But I’m pretty sure if I wanted to make money mentioning stuff at my blog, I would need to tend to figure out some way to say the pizza which many readers in comments admitted to buying and eating years ago when they were starving graduate students was absolutely delicious. (Let’s face it, Paul Harvey didn’t used to tell his listeners that the stuff products or services he was hawking might be deficient in any way!)

On the other hand: I rarely think to write a review after eating at a restaurant I like and I imagine the same is true of most people. The same holds true for lots of things: I eat every day, buy clothes regularly– yet rarely write reviews for food purchases, clothing purchases or all sorts of things. I have never written a positive review for my hairdresser even though I think she’s quite good. (That’s why I return to her regularly.)

This sort of behavior on the part of most consumers will tend to skew the balance of reviewers toward an over abundance of ‘fake’ or even ‘not so fake but advertorial reviews’.

I have written reviews for Amazon because they prompt people to do so. After I bought a sewing machine, needles and bobbins, they sent me an email. It was easy to review all so I did so because I think I could easily write a review that I thought would help people know what I thought of the machine ( periodic hobby, items for me and my husband), whether the machine was easy or hard to use, ran smoothly etc. ) and place that in context of what sort of sewer I am ( use machine once a month for a home project of clothing project for myself. )

That said: I have never written a book review for Amazon and likely never would. Decent book reviews are more complicated and to a large extent some aspects of book reviews involve preferences. The same holds true for movies. I’m willing to click a 1-5 rating at Netflix and that’s about it!

Good points Lucia. I know some people who review everything they encounter and try to do it diligently and honestly. But more people are likely driven to write negative reviews than positive ones. Unfortunately there is no way to tell who is behind an anonymous review – a family member of the owner of the business who wants to boost sales, a disgruntled employee, or just a plain competitor. BTW, do you think anyone besides the two of us even remembers who Paul Harvey was?

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