How Fake Reviews Can Lead You Into Serious Legal Trouble

The web is the land of temptation. For sites offering products or services, one of the major temptations is to use fake reviews to promote their products or services. There are massive legal penalties for taking such action, penalties that will wipe out your business if you get caught.

The ReviewFake Reviews

Review sites are popular on the web. Consumers read the reviews and use them as a reference for the credibility of the product or service being offered by a website. Great reviews can explode the revenues of a business while bad reviews can sink the company. With such high stakes, is it any surprise fake reviews and fake review sites are becoming an increasing problem online?

Individual Reviews

The first approach to manipulating reviews is to have fake reviews posted on independent sites. Anyone can go to a site such as Fiverr and pay $5 to have someone post a positive review on Yelp or wherever. In many cases, people will even make a video and post it on YouTube for all to see. How nice…yet misleading.

Site Reviews

The second approach to manipulating reviews is to build actual websites where the party owning the site is supposedly doing an objective review. Much like Consumer Reports, the individual will write up a full review of the product or service. Pros, cons, and features are listed. Shockingly, the reviewer always seems to end up recommending you buy the product. I mean, who would ever guess an independent, objective reviewer would be so enthusiastic about that fake dog poop paperweight?

Legal Issues

The fake review issue is one monitored and governed by the Federal Trade Commission, better known as the FTC. The Commission is responsible for making sure marketing pieces are accurate, and any disclaimers are clear and conspicuous in the marketing materials. On top of this, any party receiving a benefit from a party they promote must disclose this relationship in the piece they are using to promote the product or service.

What is a fake review if not a misleading piece of advertising? There is no objectivity and the reviewer almost never discloses their relationship with the company they are promoting. This lack of disclosure represents a classic breach of the advertising laws, and the penalties can be brutal.

Penalties

$16,000 per violation. This figure represents the financial penalty a site can be hit with by the FTC. Since no site is going to post just one fake review, the penalty can quickly grow to enormous numbers.

A perfect example of this is the Sketchers case. You may remember the company promoted a shoe with a rounded sole. Sketchers claimed the shoes toned your legs, and they had celebrities such as Joe Montana pushing the shoes.

Well, it turned out there was a small problem. The shoes did not tone your legs. Oops. The FTC forced Sketchers to pay a $40 million dollar penalty and take back any shoes returned by consumers without question. While a company the size of Sketchers survived the financial penalty, most businesses could not. Could yours?

In Summary

Fake reviews? Just don’t. While you might get away with them for a while, they will eventually catch up to you, and the pain will be severe.

Richard A. Chapo, Esq.