Feds ready to crackdown on fake online reviews saying fines will be imposed for misleading endorsements

FTC: "Fake reviews cheat consumers and undercut honest businesses"
Feds ready to crackdown on fake online reviews
Posted at 5:00 AM, Oct 20, 2021
and last updated 2022-02-22 18:23:19-05

COLORADO SPRINGS — Before you spend your hard earned money, do you find yourself researching reviews online about a business, product or service? News5 explains why investigators are looking into this is an area filled with fraud and why being able to find the truth is important for both business owners and consumers.

Online platforms may say they remove fake reviews, but it's still enough of a problem that the Federal Trade Commission is putting companies on notice. Fake reviews and deception will now lead to thousands of dollars in fines.

Maybe you're looking for a new place to eat, or need to buy something online like a new lawn mower and you want to know it's a quality product that will perform well when you need it. Perhaps maybe you need a contractor with a track record of reliability to help with something around the house. In all these cases online reviews have become a big part of how we make our decisions.

"We always ask, how did you hear about us? And they're like well, we looked you up online and here's the important part, I read your reviews," said Al Cazares who owns House Doctors a local home repair company.

With a focus on helping people to get things fixed and installed around the house, Cazares says for a small business like his, online reviews have a huge impact.

"Every review that comes in good or bad I'm out there. It's my responsibility to give feedback to the consumer," said Cazares. "The business lives and dies by having honest reviews out there and real feedback from real customers."

He hopes competitors are being honest, but he knows across all industries fake reviews and dishonest online tactics are out there.

"Well I think people need to know when they look up a company they are getting true feedback and if people are buying reviews, you know, people don't know that," said Cazares.

The Federal Trade Commission just announced it will now fine businesses up to $43,792 per violation for fake reviews and misleading endorsements.

"Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection.

"They're actually looking at these reviews, that these reviews are very important and we want to make sure the consumer is getting the good or service that they actually requested and they're not being brought down a path of misrepresentation," said CSU Global's Dr. Fraud J. Michael Skiba.

But federal investigators won't be able to catch everything.

So here are some things to keep in mind to help identify fake reviews that can be hard to spot:

- Beware of those that are only negative or positive.

- Check for unusual wording

- Very short reviews that are too general, not pointing out anything specifically good or bad

- Check out the reviewer

- Reviewer left many reviews for the same industry or on the same day.

"Does the reviewer only have one or two reviews, or no reviews at all? That can be very interesting because sometimes they can be a plant by the actual business," said Skiba.

There are also free tools that can help you identify the fake reviews. Experts recommend fakespot for sites like amazon, eBay, Walmart, Yelp, Trip Advisor and others. for tech gadgets, The Review Index can analyze stream and amazon. Review Meta only analyzes amazon reviews.

"A lot of people kind of drive their behaviors based on those reviews. So that absolutely could make or break a small business," said Skiba.

If you come across a review or company that appears to be using these deceptive tactics you are urged to report it to federal investigators. You can file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).