Five Star Fakes: Small business owners feel big impact from fake online reviews
New research shows fake testimonials could cost consumers an extra 12% on goods and services
InvestigateTV - Fake online reviews have had a worldwide economic impact, costing businesses and consumers $152 billion in 2021, according to the World Economic Forum, a Swiss lobbying group.
Yet even with the proliferation of fraudulent reviews, a 2021 study revealed 77% of consumers say they “always” or “regularly” read online reviews “when browsing for local businesses.” Squarely in the crosshairs of those billions of lost dollars are small businesses that are now facing online bad actors leaving potentially damaging reviews.
“Honest businesses, particularly local businesses, lose out to fake reviews,” said Rich Cleland, assistant director of the Division of Advertising Practices at the Federal Trade Commission (FTC).
Cleland said fake reviews can be a serious problem for the average consumer.
The Federal Trade Commission (FTC) is also cracking down on fake online reviews. In an August 2022 press release, the FTC and six states announced a lawsuit against a rental listing platform for paying for fake reviews.
In a 2022 study presented to the National Bureau of Economic Research, data showed that phony testimonies cost customers an extra $0.12 cents for each dollar spent – meaning you could spend up to an extra 12 percent because of fake reviews. But fake online reviews don’t always have an immediate financial impact, some small businesses are seeing their reputations damaged from a barrage of untrue testimonials.
Global problem, local impact
Nicole Burnett owns Burnett Real Estate Co. At Keller Williams, a real estate agency in Gig Harbor, Washington. For her small business, word-of-mouth is helpful, but she said her team also relies on customers to share online reviews about their experience with her company. In her words, reviews could harvest new clients and potential referrals.
“We have amazing clients, and we’ve had all five-star ratings,” Burnett said.
That all changed in February of 2022 when Burnett said she opened her computer and came across a one-star Google review of the business.
“The account was suspect, like it may not have been a real account,” Burnett said.
She reviewed her company’s database and could not find any record of her team contacting that reviewer. She reached out to the commenter to investigate the complaint but said she never heard back.
The number of poor reviews continued to grow.
“Then maybe a couple weeks later is when it started to spiral,” Burnett said. “I think I woke up one morning and there were three or four, and I’m looking and again, we hadn’t contacted these people.”
One was written by a reviewer named Isabella:
Burnett said she and her team couldn’t understand why these reviews were coming in bursts – sometimes separated by just a few hours. She said her first thought was a competitor, but as the reviews continued, the posts seemed more coordinated. Up to that point, Burnett’s business had a five-star rating on Google, but once the one-star ratings started, her company’s rating began to drop.
“Then I’m starting to panic a little bit because we don’t know where they’re coming from,” Burnett said.
What Burnett didn’t know was that one of the reviewers – Isabella - wasn’t just posting on her real estate website in Gig Harbor, Washington. The profile attached to that name was also leaving reviews in Texas, New York and even Qatar.
Tracking Fake Reviews
Kay Dean is a former fraud investigator for the federal government and owns and operates the website FakeReviewWatch. Over the past five years, Dean has uncovered thousands of examples of fake online reviews.
“The fraud extends across every profession you can imagine,” she said. “I’ve seen surgeons, psychiatrists, weddings, DJ’s, lactation consultants, piano teachers, and you name it.”
Dean said the scope of the problem is massive, and there is little-to-no regulation. She said in her opinion, most people don’t realize how polluted online review spaces are. It turns out, one of Dean’s ongoing investigations had flagged Isabella – the same commenter from Burnett’s page - for posting fake reviews on other companies’ websites.
“I saw the Burnett Real Estate in the Seattle area getting hit with recent negative Google reviews from profiles I had already identified as part of the fake review networks,” Dean said. “So I reached out to her and asked her what was going on.”
Dean’s findings connected to Isabella included a review for a California nursing home, a home warranty location in Brooklyn, NY, and an e-commerce store in Qatar.
“I recognized that profile as part of a fake review network,” Dean said. “That profile had left a negative review for a Texas dentist.”
In October of 2021 Isabella left this review reading:
Once Dean and Burnett connected, Burnett said she took her problem to Google. Google eventually removed the comments, and her company’s rating rebounded. However, the profiles of fake reviewers remained.
InvestigateTV reached out to Google to ask about Isabella’s profile and its multiple reviews. Google would not do an interview, but a company spokesperson had the following statement: “We invest significantly in building technologies and instituting practices that help people find reliable information on Google. Our policies clearly state reviews must be based on real experiences and information, and we closely monitor 24/7 for fraudulent content while we continue to invest in ways to keep the information on Maps authentic and reliable. Users who repeatedly violate our policies may be prevented from making further contributions to Google Maps.”
InvestigateTV also wanted to reach out to Isabella, but there is no way to contact reviewers through their Google profile.
Small businesses solutions
Kay Dean suggested small business owners need to be wary when examining reviews left on their pages. She had the following advice to catch potential fake reviews:
- Multiple reviews left in short bursts of time are likely fake reviews
- If possible, try to verify whether the reviewers were actual customers
- Report any reviews that are spam
- Report any fraudulent activity to the FTC and the platform you are using
Despite her experience, Burnett said for small businesses like hers having reviews is important.
“I think on one hand it’s a wonderful tool and it’s a great way to get to know a business or someone that you may be working with,” Burnett said.
However, Burnett said she believes companies like Google should remove accounts participating in fraudulent activities.
“I think it’s pretty clear when it’s a fraudulent account or when they are doing it for potentially compensation, so, yes, I think they have that responsibility,” she said. “I know the blood, sweat, and tears that goes into building a small business, so something like this can be really harmful.”
Copyright 2022 Gray Media Group, Inc. All rights reserved.