According to the NY Times, “New York regulators will announce on Monday the most comprehensive crackdown to date on deceptive reviews on the Internet. Agreements have been reached with 19 companies to cease their misleading practices and pay a total of $350,000 in penalties.”
The idea is to take down companies that make a living by creating false reviews on sites such as Google and Yelp. Yelp itself has become much more aggressive on this front, branding perpetrators of review fraud with a kind of Scarlett Letter that could effectively kill the business.
In conducting the sting, New York investigators posed as business owners seeking false reviews from “reputation management firms”:
In some cases, the reputation shops bribed their clients’ customers to write more fake reviews, giving them $50 gift certificates for their trouble. They also went on review sites that criticized their own fake-review operations and wrote fake reviews denying they wrote fake reviews.
The stakes are very high for business owners who often feel unfairly maligned by online reviews and don’t know quite what to do about it. They correctly perceive that consumers rely heavily on online reviews. This was shown most recently by Nielsen’s annual trust in media rankings:
One of two companies (among the 19) named in the article is Main Street Host, a local SEO/SEM firm (not to be confused with Main Street Hub). Reportedly some of the companies in the settlement were business owners themselves.
As indicated, the ability to generate legitimate customer reviews has become increasingly important for SMBs who live and die by word of mouth. Studies indicate that consumers require somewhere between 6 and 10 reviews of a business to feel confident about it. Yelp’s review filter fights review fraud but has been a persistent source of frustration to business owners who feel that good reviews are often inexplicably removed.
Companies and tools such as Gib Olander’s Local Viewpoints and Mike Blumenthal’s Give Five Stars help business owners get reviews in legitimate ways. But there are plenty of companies that operate in a gray zone between Yelp’s strict no-solicitation rules and clear review buying or forgery.
Review fraud doesn’t appear to be going away, notwithstanding the NY action. What is your sense of how widespread it is and whether it will have a corrosive impact on consumer trust of review sites?