New York's attorney general announced a settlement with 19 companies responsible for flooding websites with bogus positive reviews.
New York Attorney General Eric Schneiderman announced Sept. 23 that he reached settlements with 19 companies accused of "astroturfing"—creating fake glowing online reviews for companies trying to attract business. The deal included $350,000 in penalties.
The settlement came after a yearlong undercover investigation called "Operation Clean Turf." The effort tracked fake reviewers being paid $1 to $10 per review working in Bangladesh, the Philippines and Eastern Europe.
By one estimate, cited by the attorney general's office, some 10% to 15% of online reviews will be fake by 2014. The Federal Trade Commission (FTC) has also cracked down on false advertising online, including information packaged to look like news sites and editorial content being confused with ads.
"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing… This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution." Eric Schneiderman, New York attorney general
In one case, an agent hired a company to create false positive reviews for a fake Brooklyn yogurt shop. The reviews then appeared on sites such as Yelp, Google Local and Citysearch. The investigation also found some New York businesses solicited false ads on classified sites such as Freelancer.com, oDesk.com and Craigslist.
"… as consumers increasingly turn to online reviews to find a local business, the incentive to artificially improve one's reputation also increases." Vince Sollitto, VP Communications & Public Affairs at Yelp
A group of Yelp reviewers sued the company on Oct. 20 over claims that they are, in effect, unpaid employees and should be paid for writing their reviews. The next hearing in the lawsuit, filed in the U.S. District Court for the Central District of California, is scheduled to take place Jan. 27, 2014.
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