yelp lawsuit

19 companies fined $350,000 for fake online reviews

September 25, 2013
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yelp police 19 companies fined $350,000 for fake online reviews

Fake Yelp reviews cost brands big time

Yelp recently filed a lawsuit against a lone law firm, alleging fake reviews, getting the ball rolling on their taking legal action against companies seeking to boost their profile by faking reviews or buying fake reviews. They’ve been policing the site for some time now and businesses are known for suing each other over defamatory comments, but news out of New York has just made it even costlier for businesses faking reviews.

New York’s Attorney General Eric T. Schneiderman has announced that after a year-long investigation (“Operation Clean Turf”), 19 companies have agreed to pay fines for writing fake reviews on Yelp, totaling $350,000 in penalties.

Because fake reviews are considered astroturfing, wherein a commenter on a website, be it Yelp, a blog, or otherwise, posts commentary acting as a disinterested third party, hiding (aka lying about) their affiliation with the company being defended or positively reviewed. Review sites like Yelp have been tainted with this behavior, by companies themselves and by freelancers hired to write positive reviews and make them look legitimate.



Advertise at AG

Aside from Yelp cracking down, New York has begun what could become a trend of other states investigating and fining companies that pad their reviews online, not just on Yelp but on Citysearch, Google Local, and others, according to Schneiderman.

In a statement, the AG said, ” In the course of the investigation, the Attorney General’s office found that many of these companies used techniques to hide their identities, such as creating fake online profiles on consumer review websites and paying freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe for $1 to $10 per review. By producing fake reviews, these companies violated multiple state laws against false advertising and engaged in illegal and deceptive business practices.”

Astroturfing is referred to as false advertising by AG

“Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” Schneiderman noted. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution. And companies that continue to engage in these practices should take note: ‘Astroturfing’ is the 21st century’s version of false advertising, and prosecutors have many tools at their disposal to put an end to it.”

As a result of the investigation, the following 19 companies involved have agreed to stop astroturfing and will cough up anywhere from $2,500 to $100,000 each:

  1. A&E Wig Fashions, Inc. d/b/a A&E and NYS Surgery Center
  2. A.H. Dental P.C. d/b/a Platinum Dental
  3. Body Laser Spa Inc.
  4. The Block Group, LLC, d/b/a Laser Cosmetica and LC MedSpa, LLC
  5. Bread and Butter NY, LLC d/b/a La Pomme Nightclub and Events Space
  6. Envision MT Corp.
  7. iSEOiSEO
  8. Medical Message Clinic and HerballYours.com
  9. Metamorphosis Day Spa, Inc.
  10. Outer Beauty, P.C., Lite Touch Plastic Surgery, P.C., Staten Island Special Surgery, P.C., Sans Pareil Surgical, PLLC
  11. Stillwater Media Group
  12. Swan Media Group, Inc. and Scores Media Group, LLC
  13. US Coachways Limousine, Inc. and US Coachways, Inc.
  14. Utilities International, Inc. d/b/a Main Street Host
  15. The Web Empire, LLC
  16. Webtools, LLC and Webtools Internet Solutions Ltd.
  17. West Village Teeth Whitening Service, LLC; Magic Smile, Inc., aka Magic Smile
  18. XVIO, Inc.
  19. Zamdel, Inc. d/b/a eBoxed

How did these companies get away with it in the first place?

These companies didn’t just fool the Yelp system, they manipulated Google Places, Yahoo! Local, Citysearch, Judy’s Book, InsiderPages.com and more. One company posted over 1,500 fake reviews online by masking their IP address so there were no red flags on the review sites’ end.

Another company offered free or discounted services in exchange for positive reviews, while another hired an SEO company to post fake reviews. Another company blatantly solicited freelance writers from Fiverr.com and oDesk.com to write fake reviews, and asked employees to pose as customers and write positive reviews. That same company offered $50 gift certificates to customers willing to write positive reviews without disclosing the gift in the review.

There are many ways to cheat the system, but after years of these abuses, the review sites and law enforcement are getting involved and wising up, costing businesses big time. We hope in the future to see punishments of the very people and review mills generating these fake reviews in mass.

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.



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