ACCC Chairman Rod Sims told Fairfax Media recently ''Our concern is that people trust online websites more than they do company advertising or more than they do reading the newspaper. And yet if those things are not reliable, then that is both unfair to the consumer and it is unfair to competitors.''
The ACCC said that they will investigate companies suspected of writing their own reviews or paying for positive reviews.
In the past SmartHouse has been approached by several Asian brands and distributors who have offered to supply a review which they claim has been written by one of their customers. We have always refused any approaches by a vendor to supply a review.
We have also been offered advertising and marketing dollars for a favourable review. Recently a major Chinese Company told SmartHouse that they would only advertise on SmartHouse if we gave them a "glowing" review. This offer was refused.
The ACCC said that several Companies will be targeted in 2013 for misleading behaviour and unfair contract terms; they also revealed that consumer groups are receiving up to 140 complaints a month about group buying sites such as Groupon, Cudo, Spreets and LivingSocial.
According to a recent investigation by the UK Guardian, who will shortly launch a web site in Australia in direct competition with Fairfax and News Limited operations they have uncovered fake reviewing on an almost industrial scale, with companies paying offshore contractors to post numerous glowing accounts of their activities, yet maintaining they are from unbiased consumers.
Many of the fake reviews uncovered by the Guardian were written by computer science specialists in countries such as Bangladesh, India and Indonesia.
Many of those reviews have ended up on Australian web sites.
Back in 2009 US Company Belkin found themselves involved in a fake reviews scandal.
Fake positive reviews of Belkin products were actively solicited by one of its employees an investigation revealed.
At the time Belkin apologised for the worker's actions, which sought to artificially boost Belkin's status on Amazon while denigrating existing bad reviews.
An internal Belkin investigation revealed that Mark Bayard, a Belkin employee had used the Mechanical Turk service to ask users to write positive reviews of a Belkin product at a rate of 65 cents per review.
The requests made it clear that writers need have no experience of, nor even own, the product in question. Belkin President Mark Reynoso said at the time that the solicitations had been "an isolated incident."
The Guardian tracked down one individual in Chittagong, Bangladesh who had 11 jobs posting reviews.
The individual said that he was so busy that he sub-contracts some of the work to others in India and Bangladesh.
According to investigations by SmartHouse the primary offenders are Asian vendors who are selling look alike or knock off products and are simply sticking a brand name on a cheap made in China product.
One organisation that has been identified as being responsible for paying "fake" reviewers is Freelance.com who offers their services in Australia.
When Guardian Money contacted one reviewer they were told that he was contracted to post fake reviews and was paid for his services through Freelancer.com.
In Australia fake reviews are illegal. Research has found that reading three negative reviews is not enough to change the mind of 63% of consumers about making a purchase.
The Guardian found that companies paying for fake reviews are keen to cover their tracks and make reviews as believable as possible.
For example, a posting by "mutaaly" on Freelancer.com, seeking writers for 180 fake 3-, 4- and 5-star reviews to be posted to various web sites requires them to be drip-fed on to the sites every two days, and states that they should not all be hyper-positive.
A small number should be "3 star", most "4 star" and a few "5 star". The post says: "All reviews should be unique and well-crafted so that they look entirely natural. All reviews must be from unique email addresses/Facebook accounts.
"Reviews should be very different from each other - i.e., one might say 'Item was shipped quickly' and another might say 'A+ great service!!' while another (3-star) might say 'I was satisfied with their customer service', etc."
Recently Amazon moved to crack down on thousands of fake book reviews that have popped up on the site in recent years.
Yelp, a popular Australian site that combines local reviews (30m so far) and social networking to create a local online community, said in November that it would be fighting fake reviews by naming and shaming companies and individuals found to be doing it. If Yelp finds evidence of attempts to pay for positive reviews, it puts up a 90-day consumer alert against the company.
The Guardian offers this advice as to how to spot a fake review:
- Look for concrete details.
- Avoid reviews that provide abstract narratives about a product or customer-service experience.
- Give more trust to reviews that provide in-depth descriptions of the quality of the product or service.
- Avoid one-review accounts.
- Click on a user's profile on review websites to get an indication of which other reviews the user has written.
- Beware reviews in poor English.
- Genuine customers may take little care with spelling and grammar, but some reviews sound as if they were translated from a foreign language.
- Give more credence to reviews written in well-constructed and grammatically precise English.
- Skip over reviews overflowing with verbs, adverbs, hyperbole and praise that contain no caveats.
- Consider whether the reviewer's purchase has been confirmed.
- Amazon and Trustpilot have ways to confirm whether a customer who left a review for a product has indeed purchased it, but this system can be abused.
- Seek company and product recommendations from reputable publications.
- Conduct in-depth research.
- Reviews left by users on consumer forums, where they've engaged with the community on a regular basis can provide sharper insights than reviews posted online, so look beyond page one of Google's search results to get a better idea of a company's reputation.