False Impressions: Online Customer Reviews Exposed

It’s impossible for consumers to distinguish phony reviews from real ones, because marketing companies take elaborate steps to deceive websites and you.

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The next time that you consider booking a vacation, dining at a restaurant or making a household purchase, you might be tempted to check out customer reviews that include firsthand experiences that are posted on various websites.

However, significant flaws exist with such reviews: Some of them are phony, and it’s impossible for you to determine which customer reviews are real and which aren’t, experts tell Consumers Digest. As much as 15 percent of customer reviews in 2014 are fraudulent and unreliable, according to a study by market-research company Gartner.

A 2013 sting by state investigators in New York revealed that phony customer reviews often are the covert work of marketing companies. The companies are hired by businesses to fill the Internet with fake reviews that are designed to steer consumers off course when they seek advice about a product or a service. Federal Trade Commission says fraudulent customer reviews are false advertising and, therefore, illegal, but the agency has limited resources to prevent such reviews from being published.

“The problem is, if it gets too rampant, consumers just aren’t going to trust [customer] reviews at all,” Mary Engle of FTC says.

We believe that such a lack of trust already is well-deserved, because we found plenty of evidence to suggest that fake customer reviews are a problem that might never be solved. Although independent experts believe that the majority of customer reviews are genuine, the mere presence of fraudulent customer reviews taints the entire well.

FAKE TAKE. In September 2013, New York admonished 19 companies that published fake customer reviews, and the companies agreed to pay $350,000 as part of a settlement. State investigators revealed that the companies hired writers from as far away as the Philippines and paid them up to $10 for each phony customer review that was posted on behalf of a company. For instance, bus-charter company US Coachways wrote its own bogus reviews, hired freelance writers to do the same, and urged employees to pose as customers and write positive reviews about the company, New York investigators found.

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We believe that the revelations of the New York investigation represent a microcosm of what happens across the country and throughout the Internet, based on our interviews with seven independent customer-review experts. It’s unclear what percentage of businesses attempt to publish fake reviews or whether the businesses that publish fake reviews primarily hire third-party companies or do their own dirty work, experts say.

The New York investigation focused on fake customer reviews that it found on social-media review websites. However, it’s clear to us that all websites that provide customer reviews, including retail, manufacturing and service platforms, are vulnerable to having fake customer reviews posted, because it’s too easy for someone to pose as a customer.

New York investigators found online advertisements that sought writers to generate fake reviews and followed up such solicitations. For example, they found a nightclub that solicited writers who could post customer reviews for at least 3 months and not have the reviews flagged as fraudulent by website review-verification systems. The nightclub said it would supply the language that should be used for each customer review.

Furthermore, to seal the deal, New York investigators posed online as a yogurt shop in Brooklyn and solicited fraudulent reviews from so-called reputation-management companies in New York. “Some of the companies proceeded to explain how they could write fake reviews for us and explained in great detail how they would do that,” says Clark Russell, who is an assistant attorney general who is in charge of New York’s Internet bureau.

For instance, the marketing companies touted their capabilities to get around the safeguards that websites use to try to identify fraudulent reviews. The companies said they would use bogus profiles that were designed to trick website operators into believing that the phony poster was a customer. One company that sought writers to generate fake reviews said candidates must have multiple Internet protocol (IP) addresses, so the fake reviews that a writer posted would appear to come from different people.

“It’s not like some buffoon manager decides in the middle of the night when he’s bored to pump up his hotel,” says Judy Chevalier, who is a professor of finance and economics at Yale University’s School of Management. “It’s professional marketing services, thinking of [customer reviews] as part of a social-media plan.”

RATINGS GAME. An investigation by New York's attorney general found that 19 businesses hired marketing companies to generate and submit fake reviews.

RATINGS GAME. An investigation by New York's attorney general found that 19 businesses hired marketing companies to generate and submit fake reviews.

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STAR SEARCH. Businesses want positive reviews for one reason: profit. Likewise, the websites that publish customer reviews have a financial motivation, too. In general, customer-review websites want to tout as many reviews as they can, because more reviews typically results in an increase in page views, and more page views means that the website can attract more advertisers, which results in increased profit for the website, says Jenny Sussin of Gartner. However, bogus reviews are bad for business, too, Sussin says, because advertisers that question the credibility of reviews on a particular website are less likely to spend their dollars there.

Research long has indicated that consumers are more likely to make purchases from websites that feature customer reviews. However, a 2013 survey by market-research company Dimensional Research quantified that. Results of the survey indicated that 90 percent of consumers are more likely to buy an item that gets a high rating from customers. For example, customer-review websites typically ask the customer who posts a review also to rate the product on a scale of zero to five stars. Zero stars reflects the worst rating, while five reflects the best rating.

A 2012 University of California-Berkeley study examined customer reviews that were posted on customer-review website Yelp. The study revealed that an increase of just one-half of a star on a composite customer rating made a restaurant 19 percent more likely to fill its seats during peak dining hours. Furthermore, a 2012 survey by Nielsen found that 70 percent of consumers trust online customer reviews and rank them second only to remarks from family or friends when it comes to recommendations about purchases. As a result, motivation exists for businesses to manipulate consumers through fake customer reviews.

Websites that publish customer reviews play a game of cat-and-mouse with companies that hope to flood the Internet with fake customer reviews, and in 2014 it’s unclear which side ultimately will win, experts say. Travel website Expedia takes the most extreme approach that we found toward making sure that the customer reviews that it posts are authentic. You can’t post a review for a hotel to Expedia unless you book the hotel through Expedia, check in and check out of the property and have your credit card charged for the purchase. Only after that will you gain access to a link that allows you to post a review on the website, says Expedia spokesperson Sarah Gavin. That’s good news for consumers, because it helps to verify that the person who writes the review is an actual customer.

The bad news is that Expedia doesn’t have such requirements for posting reviews on its website about cruises, flights or rental cars that are booked similarly. Gavin says the purchase of cruises, flights and rental cars don’t include the same steps as do hotels because of the nature of such purchases. For instance, cruises that are booked on Expedia are paid for before departure. As a result, Expedia can’t verify that a cruise review is written by an actual cruise customer.

Unfortunately, the verification approach that Expedia uses for hotels is an exception. The result of Expedia’s approach is that it typically has fewer customer reviews about hotels than do other travel websites. From a business perspective, more customer reviews on a website makes the website appear to be more engaging and successful, says Michael Luca, who is an assistant professor of business at Harvard University. Such an environment is why it isn’t necessarily in a website’s best interest to make people jump through extra hoops if they want to post a customer review, Luca says. From a consumer perspective, we believe that unless a website takes deliberate steps to verify that the person who submits a review actually bought the product or service, confusion will continue to reign over what’s fake and what’s real.

Experts say customer-review websites that attempt to catch fake reviews after the fact rely either on a verified review process or on specialized computer algorithms that are too complicated for consumers to understand. They analyze the language that’s used in the review as well as the online reviewer’s footprint to look for evidence that the review might be fake.

For instance, computer analysis of reviews scrutinizes data such as the IP address from which the review originated. Every computer that’s connected to the Internet has a unique IP address, so if a website’s computer-verification program discovers that multiple account profiles originate from one IP address, it’s an indication that the person who writes the reviews is attempting to fill the website with fake reviews, says Bing Lui, who is a professor of computer sciences at University of Illinois-Chicago. A website’s computer algorithm easily can determine that, say, three accounts are from the same IP address and conclude that one person is behind each account, Lui says.

UNDER REVIEW. Yelp says it rejects 25 percent of customer reviews that are submitted to the social-media review website.

UNDER REVIEW. Yelp says it rejects 25 percent of customer reviews that are submitted to the social-media review website.

Shutterstock/Yelp

Computer algorithms that are designed to catch fake reviews must be refined continually to stay ahead of the latest techniques that bogus reviewers use, Luca says. From our perspective, such conditions further confirm that at least some fake reviews continue to make their way through even the best of filters.

Yelp rejects 25 percent of customer reviews that are submitted as part of an effort to prevent fake customer reviews, says Darnell Holloway of Yelp. Yelp’s computer-verification system also screens for rants and raves that appear in reviews, such as when the review has language that’s over the top rather than analytical. For instance, Yelp wants to avoid reviews of, say, a restaurant, that scream “I loved it!” or “Worst place ever!” Yelp deems such language to be “unhelpful” in reviews, because it doesn’t provide specific information about why the reviewer liked or disliked the business, Holloway says.

Yelp also tries to identify reviews that are submitted by people who don’t post reviews regularly on Yelp and, therefore, aren’t considered to be active members of the Yelp customer-review community. For example, reviews that are submitted by a person who never submitted a review before likely are posted under a group of reviews that are classified as “not currently recommended.” The link to such reviews appears at the bottom of a business’s Yelp page. In other words, Yelp won’t draw attention to such reviews but posts them nonetheless. Holloway says that if the reviewer of a “not recommended” review begins to post frequently about multiple businesses, it’s an indication that the person’s reviews are authentic. As a result, the person’s reviews that are “not recommended” could be switched to appear with other verified reviews, Holloway says. Neither the fraudulent nor the “not recommended” customer reviews are factored into a business’ star rating.

When we asked Holloway whether Yelp’s vetting approach guarantees that no fake reviews will be posted on its website, he didn’t give us a direct answer. Holloway says Yelp wants to publish the “most useful and reliable reviews” but wouldn’t say whether such reviews could be fake.

“There’s a little bit of an arms race between a place like Yelp and people [who] are trying to leave fake reviews,” Luca says. “Because Yelp continues to refine their filter and add new things to it, they come up with fancier technologies to catch fake reviews. On the other hand, people who are intent on leaving fake reviews are becoming more educated on knowing how to do it.”

ON YOUR OWN. Unfortunately, we believe that the best way to protect yourself from getting stung by a fake customer review is to avoid using customer reviews altogether. Although FTC has jurisdiction over online customer reviews, the agency never will be able to investigate all potentially fake reviews, because FTC doesn’t have enough resources, particularly when so many other types of Internet scams exist, Engle says. “You just can’t stamp it out completely,” Engle says of fake customer reviews.

At press time, we found no evidence to indicate that any state besides New York even investigated fake customer reviews. In September 2013, a spokesperson for California Attorney General Kamala Harris told the San Francisco Chronicle that the office was looking into the problem of bogus customer reviews. Jeff Rabkin, who is California’s special assistant attorney general for law and technology, told the newspaper that fake customer reviews represent “an old-time fraud emerging in a new marketplace.” However, at press time, nobody from Harris’ office responded to the four phone messages that Consumers Digest left to learn whether California launched an investigation. We only can hope that California is more responsive to consumers who encounter problems with fake reviews than Harris’ staff was with us.

It’s difficult not to conclude that consumers largely are on their own when it comes to determining the authenticity of online customer reviews, and that’s precisely why you can’t rely on them. We know fake customer reviews exist, and we know that customer-review websites and government agencies can’t catch all of the phony reviews that are posted. So if, as experts insist, consumers can’t tell real reviews from fake reviews, the entire concept of customer reviews amounts to a gamble for anyone who relies on them.

RANGE OF RAVES. The threat of fake customer reviews exists in all product and service categories, including restaurants, consumer goods, clothing and travel destinations.

RANGE OF RAVES. The threat of fake customer reviews exists in all product and service categories, including restaurants, consumer goods, clothing and travel destinations.

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Lui conducts experiments with students to see whether they can determine a fake customer review from a genuine customer review, and the results are deflating. He says fake reviews and real reviews blend together easily, because even each real review is written in a different style and voice. Identifying fake reviews is “not easy for consumers to figure out,” Lui says. For instance, if a person who has written authentic reviews for a long time suddenly decides to get paid to write fake reviews on behalf of a marketing company, websites won’t have any idea that the reviewer who was deemed as reliable no longer is.

“I do not think it is possible to detect every possible fake review, because if a fake reviewer is really careful, it is possible to avoid being detected,” Lui says.

Meanwhile, actions that consumers can take on their own to identify fake reviews still won’t guarantee that you’ll discover a phony review. Among the most commonly cited steps consumers can take include looking for multiple reviews for a product or service that are posted within a small time frame, such as within an hour. Such evidence suggests that one person posted multiple reviews on the website via different accounts.

Another red flag is if a review includes the full model name of a product several times. The use of the full model name suggests that the person who posted the review wants to attract people who search the Internet for a particular product, so the review will rank high on the search-engine result, Lui says. Consequently, we believe that you’ll be more likely to see the positive review and be swayed to purchase the product.

As more consumers realize that fake customer reviews exist, more consumers will begin to distrust all such reviews, Sussin predicts. We understand that it’s human nature for consumers to want to share opinions and experiences, so it’s only natural for someone to believe that online customer reviews represent an accurate survey of people who purchased a product or service. However, too much evidence suggests that you can’t trust what you see. In other words, if you rely on online customer reviews to, say, book a hotel for a weekend in Las Vegas, you’re making a big roll of the dice that it will pay off.

Freelance writer Darci Swisher has written about consumer-oriented topics for Crain’s Chicago Business and Interest.com.

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