Nineteen firms that posted fake online reviews to enhance other companies' reputations on sites like Google and Yelp have agreed to pay $350,000 in fines. Let this be yet another lesson in how posting fake reviews can have costly consequences.
The fines are the result of a year-long investigation by the New York Attorney General's office. Investigators posed as business owners looking to drum up some fake good reviews; the firms offered to post rave reviews for as little as $1 each. Often, these fake reviewers lived overseas in places like Bangladesh, the Philippines, and Eastern Europe.
The 19 companies have agreed to pay penalties and cease their misleading practices. Had they not agreed to the fines, they could have faced even more significant legal action.
False advertising refers to any type of promotion that misrepresents any characteristics of a business. The elements may vary by state, but generally speaking, to establish that an ad is false, there must be:
- A false statement that has the potential to deceive,
- A deception that is likely to affect the purchasing decisions of its audience,
- An advertisement that involves goods or services in interstate commerce, and
- Injury to the plaintiff.
According to New York Attorney General Eric Schneiderman, however, "What we've found is even worse than old-fashioned false advertising.
"When you look at a billboard, you can tell it's a paid advertisement," Schneiderman told the Times, "but on Yelp or Citysearch, you assume you're reading authentic consumer opinions, making this practice even more deceiving."
Breach of Contract
The sites where the fake reviews are being posted could also possibly pursue actions for breach of contract for violating the sites' terms of service. Yelp's Terms of Service, for example, contain a provision on being responsible for the content you post. The terms also spell out potential liability if a user posts false or intentionally misleading material.
Despite the power of a positive review for a business, the consequences for posting a fake positive review may not be worth it. Make sure you consult with an experienced business lawyer if you have any issues with online reviews about your business or with a site's terms of service.
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- Companies to pay $350,000 fine over fake online reviews (CNET)
- Essential Advertising Rules for Your Businesses (FindLaw)
- Yelp Lawsuit Lesson: Fake Reviews Can Be Costly (FindLaw's Free Enterprise)
- How to Respond to a Negative Online Review (FindLaw's Free Enterprise)