I have two questions for you:
- How often have you read a glowing online review — about a business, lawyer, physician, you name it, anything — believed the review and then bought the product, dined in the restaurant or hired the person only to be disappointed? Too often, I’ll bet you’re thinking.
- Do you know what the FTC (Federal Trade Commission), which has always had the power to outlaw fake reviews, did about the problem over the past several years? Answer: Not enough!
Until now. On August 14 this year, the FTC announced a rule that will combat fake reviews and testimonials by prohibiting their sale or purchase and allow the agency to seek civil penalties against knowing violators — up to $50,000 per violation. The rule is expected to take effect around the middle of this month.
“This is music to the ears of thousands in the business community and consumers who have become victims of misleading and outright fake online reviews,” says Damian Rollison, director of Market Insights at San Diego-based SOCi, a marketing platform that works with over a thousand brands to manage their online presence.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How consumers are harmed by fake and misleading reviews
I asked Rollison to explain the nature of fake and misleading online reviews.
“It is far too easy for businesses to buy or otherwise acquire fake or fraudulent reviews that are often very hard for consumers to detect,” he said. “Their goal is to bias people toward those businesses in an unfair way. And I think that consumers are aware that fake reviews exist online, but they don’t necessarily have the best tools to know what is real and what is fake.”
He went on, “The whole thing is insidious. Essentially, consumers are being duped into thinking that their peers are recommending products and services when, in fact, the business is behind all of this, providing it an unfair advantage. This is especially important when it comes to local business reviews and to services that are central to your life and livelihood.”
He offered examples of those services: “Dennis, just think of health, medical or legal services where we find a great deal of fake review content. Another place where it is especially critical are services that people need in an emergency. Think about a locksmith or a garage door repair service. Are they legit or scammers?”
This made me think of the calls I’ve received from readers who said they were looking for an attorney and were deeply influenced by impressive “client” reviews, only to discover that the lawyer had gotten into trouble with their state bar with the reader’s type of case.
Real or fake? Are there any clues?
You are no doubt thinking, Are there giveaways that suggest what I am reading is a fake review?
“Yes,” Rollison said. “Reviews that seem suspiciously enthusiastic, as though they are shilling for that company, sounding like a TV commercial or an advertisement, would immediately tip me off. For example, ‘This is the best carpet cleaning service in Miami,’ and phrases like that suggest to me that the people who own the business are trying to rank higher in search engines. Also, it is a sign that the review might be fraudulent. Some experts have even said that reviews that simply contain too many exclamation points, as a sign of enthusiasm, ought to be looked at suspiciously.
Which reviews to read first?
So, which reviews should we read first? The positive or negative reviews?
“A lot of people feel that it is best to read negative reviews first,” Rollison cautioned. “There is an instinct on the behalf of consumers that negative reviews are more likely to be honest. But we might not want to be too quick to assume that all fake reviews are positive, because there are examples where competitors post negative reviews of a (rival) business, and those reviews are also fraudulent. So you want to be diligent, suspicious in general and skeptical of review content that may look suspicious even though it is true.”
I asked Rollison if there are platforms that do a better job of removing suspect reviews than others.
“Let me draw a contrast between Yelp and Google,” he said. “We have done research which shows that the average rating of a business on Google is 4.2 stars (out of five), and that’s pretty high, while the average rating on Yelp is 3.1 stars. At least one of the reasons for that, we believe, is that Yelp has historically been much more aggressive in removing reviews that are suspected to be fake.”
That said, Rollison concluded, “You still need to use common sense, look for online praise followed by too many exclamation marks and be very, very cautious.”
And hopefully consumers will benefit soon from the FTC’s planned crackdown on fake and AI-generated reviews.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
- How Employers Can Ensure They're Paying All Employees Fairly
- How to Get Employees to Tell You Like It Is
- Want to Produce a Podcast? Tips to Get It Done Right
- Seven Website Issues That Can Get You in Hot Water
- Scams in Retirement: How to Get Fraudsters to Scram
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
Ask the Editor: Capital Gains and Tax PlanningAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on capital gains tax rates and end-of-year tax planning
-
Time Is Running Out to Make the Best Tax Moves for 2025Don't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
Time Is Running Out to Make the Best Moves to Save on Your 2025 Taxes
Don't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
4 Smart Ways Retirees Can Give More to Charity, From a Financial AdviserFor retirees, tax efficiency and charitable giving should go hand in hand. After all, why not maximize your gifts and minimize the amount that goes to the IRS?
-
I'm an Insurance Pro: If You Do One Boring Task Before the End of the Year, Make It This One (It Could Save You Thousands)Who wants to check insurance policies when there's fun to be had? Still, making sure everything is up to date (coverage and deductibles) can save you a ton.
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
Should You Tap Your Home Equity Before 2026?As borrowing rates and tax law shifts converge, here's what homeowners need to know before pulling equity out of their home.
-
What Investors May Face in the New Year: InterviewKeith Lerner, the chief market strategist and chief investment officer for Truist Wealth, speaks with Kiplinger.
-
3 Year-End Tax Strategies for Retirees With $2 Million to $10 MillionTo avoid the OBBB messing up your whole tax strategy, get your Roth conversions and charitable bunching done by year's end.
-
'Politics' Is a Dirty Word for Some Financial Advisers: 3 Reasons This Financial Planner Vehemently DisagreesYour financial plan should be aligned with your values and your politics. If your adviser refuses to talk about them, it's time to go elsewhere.
