FTC Strikes Blow to Fake Reviews, Amazon Shoppers (and Sellers) Will Benefit
June 6, 2019 9:39 am Comments Off on FTC Strikes Blow to Fake Reviews, Amazon Shoppers (and Sellers) Will Benefit
The days of buying fake reviews may be coming to an end if the Federal Trade Commission has anything to say about it.
In 2014, the Federal Trade Commission (FTC) made progress in its effort to crack down on fake reviews. According to Steve Wyer of Third Coast Interactive, the FTC filed a complaint against Cure Encapsulations, a weight loss supplement retailer, on February 19. One week later, the owner, Nat Jacobowitz, settled for an astounding $12.8 million fine and an agreement to stop selling products with unsubstantiated claims.
The Federal Trade Commission asserts that Jacobowitz’s company made unsubstantiated claims regarding the effectiveness of its garcinia cambogia-based weight loss supplement, which also contains hydroxycitric acid. The complaint highlights Cure Encapsulations’ marketing claims that 600 milligrams of hydroxycitric acid combined with garcinia cambogia would result in rapid weight loss.
The claims were not only unsubstantiated, but the FTC also asserts that the company failed to note the known side-effects of taking these at least one of these supplements. Garcinia cambogia, an Indonesian fruit, is associated with liver failure. Hydroxycitric acid, although derived from the same plant, is less concerning. It is sometimes used as a complementary treatment in severe cases of inflammatory bowel disease and colitis. There is no scientific evidence that hydroxycitric acid triggers weight loss.
In addition to the false claims, the FTC presented evidence that Jacobowitz had partnered with Amazon Verified Reviews to inflate his product ratings. Amazon Verified Reviews sells fake reviews to underperforming Amazon sellers. Emails between Jacobowitz and the review site clearly show his request to purchase 30 reviews to push his product rating above 4.3 stars. These fake reviews had been posted regularly since 2014.
Although alarming, the practice of buying and posting inflated reviews is common. Amazon recently sued more than 1,000 individuals on the site Fiverr for advertising their review writing services. An ad on this site might offer to sell 50 reviews for $5 or $10 — a seemingly small price to pay for activity on a product. However, in the end, no one benefits.
Fake reviews not only hurt the buyers who rely on peer feedback when making a decision. They also put a strain on the honest sellers, many of whom can’t afford to purchase — or would never consider — fake reviews. Buyers have to work harder to search for information, leaving them less likely to find a quality seller whose product is on page two or three of Amazon’s results. This turns into more sales for the falsely reviewed items and less revenue for those sellers who play by the rules.
Just as concerning is that fake reviews can also be used as a weapon against competing businesses. Amazon has strict rules against sellers investing in fake reviews. When this false feedback is blatant, Amazon will swiftly pause or even cancel a seller’s account. This has prompted some sellers to buy fake reviews for their competitors, who are then banned from the site. It happened in 2018 to Zac Plansky of AT3 Tactical, a US-based small business owner specializing in rifle scopes. One morning, Plansky noticed an unusual number of reviews for his product. He reported this to Amazon, and the reviews were deleted. Two weeks later, his account was terminated. It was later determined that a rival seller had instigated the fake reviews, which provided the desired result: Plansky was gone, leaving more digital room for the other seller’s similar products. AT3’s rights to sell were eventually reinstated, but the missed sales during the suspension hurt his bottom line.
The hope now is that the action by the FTC will discourage at least some of the malicious activity. Only time will tell, says Steven Wyer, who notes that buyers should remain diligent and aware when buying anything online. This is a step in the right direction and one that will benefit buyers and sellers alike if the FTC and Amazon continue to put the proverbial foot down on the practice of buying fake reviews.
