Getting positive business reviews posted on social review sites like Yelp.com, CitySearch.com and Google Local has become big money these days and businesses big and small, in a desperate attempt to enhance their reputation and online visibility, are hiring unethical SEO companies to fake their online reviews. But this unethical practice can have some serious legal and financial consequences now that the government is heightening their enforcement actions against businesses that solicit fake reviews and those businesses offering to publish fake reviews as a service.
How big is the fake review problem? Marketing research firm Gartner states that "by 2014, one out of every ten online product reviews will be 'fake,' posted by people who have been secretly paid to write them." That’s 10% of all reviews! In fact, the practice of fake review writing has become so pervasive, it even has its own term called “astroturfing” because, like astroturf, it’s something fake that’s designed to be passed off as real.
Fake Review Publishing Is Big Business
A 2011 study conducted by Harvard Business School estimated that a one star boost in Yelp rating had the effect of increasing a restaurant's revenues by as much as 9%. So if a local restaurant grosses two million a year, then a one star increase on Yelp instantly nets that restaurant an extra $180,000. Definitely not chump change!
The practice of astroturfing has mostly gone unpunished, largely because review sites have upgraded their filtering technology to automatically weed out fake reviews. Their filtering technology prevents most amateurs and small business owners from posting fake reviews, but does little to prevent the larger SEO firms from making big bucks off the unethical practice. In response to the implementation of new filtering technology, black hat SEO firms have also upgraded their techniques to overcome the filtering technology. They employ sophisticated IP masking, as well as solicit independent contractors who have established social review site accounts that have been open for at least three months and have a certain amount of reviews. These tactics enable black hat SEO companies to thwart the filtering technology built into the sites and profit from false advertising.
New York’s Attorney General Cracks Down on Fake Review Providers
It may be the end for companies selling fake reviews however. In September 2013, New York Attorney General Eric Schneiderman went after 19 companies that were caught selling fake reviews for local businesses. Schneiderman’s Office of the Attorney General (OAG) set up a sting operation called "Operation Clean Turf" where an OAG employee posed as a yogurt shop owner and answered ads on oDesk.com, Freelancer.com and Craigslist.com for Search Optimization Companies offering to write fake reviews for their business. The 19 companies caught in the sting operation were ordered to pay more than $350,000 in combined fines as well as sign an agreement to cease their illegal practices.
Here’s a direct example of an ad posted by a New York spa caught in the sting operation:
“I need someone who is a YELP expert to post positive reviews for a spa that will not be filtered using legitimate existing yelp accounts must have at least 10 friends on Yelp. Please be a yelp expert!! I will pay $10 per-review after 3 days they must meet the criteria above.”
FTC’s Endorsement & Testimonial Guidelines
It’s important for business owners, marketers and PR professionals to know that the FTC now requires a materials connection disclosure whenever an endorsement is published by a reviewer who has received compensation in exchange for that review. And it’s not limited to just cash payment either. Free products, travel or other swag also falls under the definition. The 2009 update to the FTC’s rather outdated version of their endorsement guidelines prompted thousands of bloggers to post a materials connection statement on their websites. You can more about the FTC’s endorsement and testimonials guidelines at their website here.
Stay On The Righteous Path
The bottom line is that enforcement against fake review sellers and solicitors is on the uptick and any business employing such tactics will eventually get caught. A lot of times, local businesses will employ the services of an SEO or PR firm to outsource their reputation management for them without asking what their methodologies are. This is reckless behavior that puts your business at risk. Any marketing firm that is less than forthcoming about what techniques they employ should be avoided as this is a red flag that they’re doing something shady. Just remember that as an agent for your business, you have a right to know what methods the firm employs because ultimately, your business is liable for their actions. Being unaware of FTC and state laws for endorsements can ruin your business.