Nielsen Media Research has identified that, other than actual “recommendations from people I know,” consumer opinions posted online have the most influence on purchasing decisions. This means that online customer reviews are now more important than ads on TV, branded websites, print ads, and media. Reviews have taken over the buying experience and businesses are under more pressure than ever to present positive reviews to increase sales.
This situation has led some companies and consumers to engage in shady practices. Both sides have been found guilty of manipulation, causing serious damage to businesses and consumers alike. In fact, a 2012 Gartner study estimated that one in seven recommendations or ratings on social media sites would soon be fake.
What’s really happening in this relatively new frontier of the Internet, and how can builders be protected? Incidences of review fraud are running rampant, threatening the very core of commerce. Consumers have been caught posting fraudulent reviews, and businesses have been caught posting fake, edited, and cherry-picked reviews to enhance sales. Trust in making Internet-based purchasing decisions and upholding consumer protection rights is at stake, and likely significant financial consequences will ensue if consumers lose faith when shopping online. Review fraud is a significant step backward that smart home builders and remodelers need to avoid. After all, no business wants to risk having a Volkswagen moment with their integrity lost.
In 2011, Bill Hadley was running for a seat on the Freeport, Ill., County Board when an Internet “troll” posted defamatory commentary in the comments section of an online news article, accusing Hadley of committing sexual abuse. The accusation enraged Hadley, and he set off on a mission to expose the identity of the anonymous commenter. Hadley filed a $50,000 defamation complaint, and obtained a court order to release the IP address of the commenter from the host site. A subsequent release of information uncovered that it was a personal contact of the candidate, a local attorney Hadley worked with previously. Hadley persevered and after four years and $35,000 in legal fees, the attorney commenter was found to have ulterior motives. Subsequently, the site removed the offensive comment and the defamation case persists through the court system.
Rogue online commenters beware; anonymity is no longer a safe assumption. Review sites like Yelp, Angie’s List and Google are protected from liability for user-generated content by various “Safe Harbor” statutes, however consumers posting fraudulent comments now face legal responsibility for what they write.
Companies are also getting caught “gaming the system” with online reviews. Canada’s Competition Bureau recently fined Bell Canada (a leading Canadian telecom) $1.25 million for encouraging employees to plant positive online reviews for Bell’s mobile apps. The bureau “determined that these reviews and ratings created the general impression that they originated from independent and impartial consumers and temporarily affected the overall star rating for the apps.” Obviously, the fake reviews duped consumers into thinking they were legitimate.
Here in the United States, New York regulators have also been cracking down on deceptive Internet reviews, reaching agreements with 19 companies and issuing penalties totaling $350,000 to date for review fraud. “This shows that fake reviews are a legitimate target of law enforcement,” according to Aaron Schur, Senior Litigation Counsel for Yelp. The targets included companies that created fake reviews for other businesses, businesses that purchased fake reviews, or businesses that bribed customers to write positive reviews in exchange for gift certificates. Likewise, Amazon recently announced they are suing 1,114 fake reviewers found marketing their “review-writing services for hire” on the online services platform, Fiverr.com.
Some companies engage in a more devious form of review fraud – review washing. Essentially, they gather customer reviews and then “filter/wash-out” negative reviews, effectively cherry-picking the positive reviews to increase the calculation of the average star rating in search engines. This is all worsened by the endorsement of “professional” third-party research companies who publish the falsified star ratings as legitimate Google Star Ratings. Unfortunately, the home building and remodeling industries are replete with providers that openly offer this service, creating a “silk-road” to review fraud. This review washing practice deceptively creates improved star ratings for businesses that haven’t earned them; leading customers into believing these businesses are more “quality-minded” than they actually are and frustrating the real quality-minded companies who are now marginalized. Clearly, distorting the image of business to appear highly rated by customers violates consumer protection rights, and, if exposed, can destroy a company who engages in the practice. A quick Internet search of builders and renovators reveals many conflicting 1-star ratings on public sites, versus the 4-star and 5-star ratings on the site of their “review washing” provider – buyer beware.
This issue has not gone unnoticed by the highest level of government. Both the U.S. House of Representatives and U.S. Senate are considering two bills to rein in review fraud throughout the nation. Both HR. 2110 and S.2044 were introduced to Congress in 2015, through bipartisan support and, at the time of writing this article, each currently is in the committee stage in their respective branches. Both bills explicitly empower the Federal Trade Commission (FTC) with the authority to fine companies for restricting consumers’ ability to publish online negative reviews. The first version of these bill address the egregious act whereby; a company contractually prohibits customers from posting negative reviews. This landmark legislation exposes review fraud as an important problem and puts companies on notice to act appropriately. More legislation is sure to follow at the state and local levels as this growing problem gains further attention.
Authenticity is the Answer
Wise consumers and businesses consciously avoid the temptation to misuse the power of reviews. Consumers face legal responsibility for what they write in online reviews, and businesses that engage in unethical review practices can be exposed and brought to justice. The inevitability of occasional negative reviews is not worth the brand damage of being revealed as a counterfeit. Solid research companies refuse to enable review fraud and post 100 percent of the reviews received, while maintaining a process by which verified customers can submit reviews, and clients may only exclude profane or abusive language.
“When deciding to buy, consumers judge an offering's authenticity as much as—if not more than—price, quality, and availability,” according to Welcome to the Experience Economy authors Joseph Pine and James Gilmore.
In the end, creating “service certainty” is far more important than creating the illusion of perfection in today’s wired world.