Investigators at the New York state attorney general’s office masqueraded as the owners of a yogurt shop in order to snag 19 companies writing phony reviews on Yelp and other websites.
The office was trying to crack down on fake consumer reviews online and decided to fight fire with fire.
Reuters reports that the guilty firms, which offered “search engine optimization” (SEO) services to businesses seeking to improve their online reputation, must now pay a combined $350,000 in false advertising penalties.
“Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” said Attorney General Eric Schneiderman in a statement. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution.”
As part of a year-long sting operation, investigators faked ownership of a Brooklyn yogurt shop and reached out to some of the top SEO companies in New York to help increase the bogus store’s positive online presence.
Many of the contacted companies offered to write fake reviews of the yogurt shop and post them to popular sites like Yelp, Google Local and Citysearch.com, using complicated IP spoofing techniques and hundreds of fraudulent online accounts to avoid detection.
Some even paid freelance writers from the Philippines, Bangladesh and Eastern Europe a to write positive reviews, shelling out between $1 and $10 per post. A high premium was put on writers with experience and an established account on a consumer-review site.
“We need a person that can post multiple positive reviews on major REVIEW sites,” one SEO company posted on Craigslist. “Must be from different IP addresses… So you must be able to have multiple IPs. The reviews will be only a few sentences long. Need to have some understanding on how Yelp filter works.”
Schneiderman accused the companies of “astroturfing,” or “preparing or disseminating a false or deceptive review that a reasonable consumer would believe to be a neutral, third-party review.” His office forced the companies to sign an Assurance of Discontinuance letter and fined each between $2,500 and $100,000.
Positive online consumer reviews have become a vital part of business success. In his statement, Schneiderman cited a 2011 Harvard Business School study claiming that just a one-star rating increase on Yelp added 5 to 9 percent to restaurant revenues.
SEO companies aren’t the only ones accused of faking reviews online. A 2011 lawsuit accused Yelp itself of manipulating content on its website to reward businesses who bought advertisements while punishing those that didn’t.
That lawsuit was thrown out, but continuing reports of “extortion” by Yelp and other websites illustrates the potential for both consumer-review websites and their customers to game the system.
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