Beware the 5-star review

If you always suspected that a lot of those on-line product reviews sounded a little phony – here’s some more vindication for your suspicions. The New York Attorney General has just successfully settled a whole bunch of charges against 19 companies that were paying for doctored and fabricated user reviews on websites like Google, Yelp and Yahoo. Although the punishments total only a paltry $350,000, the case is the latest to bring to light the practice that everyone has suspected, and which many believe is growing worse rapidly.

This was no isolated case of an employee or business owner faking a review; it was systematic fraud that violated truth in advertising laws and involved use of several shadowy companies that are paid for the practice. Promising to improve one’s brand or at least outnumber the (presumably legitimate) negative reviews, these companies employ digital sweatshops in Eastern Europe, Bangladesh and the Philippines to churn out glowing reviews for products the reviewers have never seen or used.

The companies are called reputation management firms, and their stated purpose is to ensure that you or your business are not unfairly smeared on line. But all too often, they go beyond that into perpetrating outright fraud, presumably to counteract the negative stuff, but also to mislead and fool customers into believing you’re good when you’re not. As an article in the NY Times technology section points out, a phony restaurant review will result in no more than a bad meal; however the New York crackdown uncovered the practice being used by dentists, lawyers and other professionals – areas where the consequences of false advertising can be much more serious.

A Gartner study last year predicted that 15% of all social media ratings and reviews will be bogus by 2014, and I think that number is sure to go higher. Another study by the Harvard Business Review proved that an increase in ratings on Yelp, for example, translated into a significant and measureable increase in revenue. So this is not a trivial matter for businesses;  a Nielsen study last year showed that online ratings were the second most trusted form of advertising, after word of mouth.

The internet was supposed to be liberating. The interactivity of Web 2.0 meant that every man could be his own reviewer, and the people finally had a voice. Instead of the professional reviewer, now all products and services were subject to crowd sourcing – mass customer feedback, published for all to see. From the star ratings on Amazon, one of the earliest forms of user ratings, to dedicated sites like Yelp and variants like Urbanspoon, Angie's List and Citysearch, online ratings are everywhere, and influential. How many times have you checked the reviews on a restaurant or book and made your decision accordingly? I know I have, many times over.

Reactions to the Times article on line were numerous and outspoken. Many felt that the problem was even worse than already reported. Some responders, however, confused the faked reviews with freedom of speech and concluded that there was nothing that can be done to fight the practice. Not true, as the Attorney General’s crackdown – and an increasing number of enforcements around the country – has proved. Advertising is NOT protected by first amendment free speech guarantees, and commercial speech has long been regulated. The attempts to manipulate public opinion through rating sites and social media were clearly a violation of law, and the companies investigated by the AG all settled without going to trial. “Businesses have a moral and legal responsibility to present things as they are,” David Streitfeld, the author of the Times article, wrote in a follow-up. “Otherwise we’re going to be ordering lobster on the menu and we’re going to get hamster.” 

That on-line ratings are being manipulated comes as no surprise then, and I’m sure you’re all nodding with an “I knew it all along” expression. User ratings have become just one more thing on the internet that we can no longer fully trust.

The story about the New York cases was well covered in BusinessWeek, which also described the efforts by Yelp and others to weed out the fakes.