Washington: Fake online products reviews have been around for years, fuelled by unscrupulous marketers seeking to boost sales.
But a recent crackdown by authorities in New York could be the shock needed for the online sector to clean up its act.
The New York state attorney general's office recently ordered 19 companies to halt these practises and pay fines totalling USD 350,000 to settle charges of manipulating online reviews for sites such as Yelp, Google+ and others.
The settlement stemmed from an undercover investigation in which officials created a fake yogurt shop in Brooklyn and sought help in marketing from so-called "search engine optimisation" firms that work to boost a company's online presence.
The investigators discovered online ads such as this one: "Hello... We need someone to post 1-2 reviews daily on sites like: Yelp, Google reviews, Citysearch and any other similar sites. We will supply the text/review... We are offering USD 1 for every post."
"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing," state 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. "
A 2012 report by the research firm Gartner concluded that between two and six percent of online reviews are "fake or deceptive," and predicted this will grow to around 10 percent by 2014.
The Gartner report said some 31 percent of consumers use online review because they find the opinions of a person like themselves to be more credible than advertising.
Gartner said studies from a number of university researchers suggest that positive reviews can provide a shot in the arm for many kinds of businesses, from hotels to restaurants to doctors or lawyers.
"In the hospitality industry, you are more likely to see bookings go up when you have better ratings," said Jenny Sussin, a Gartner analyst and co-author of the report.
"For restaurants, a half-star increase in the review average can cause 7:00 pm bookings to go up 30 to 49 percent."
She said the review business has turned into a cottage industry, with writers in places such as India or the Philippines paid as little as USD 1 to USD 5 per review. In other cases, some employees or customers are offered incentives such as gift certificates for reviews, which is also considered deceptive or illegal.
First Published: Sunday, September 29, 2013, 12:57