Amazon announced it has filed lawsuits against two fake review brokers, AppSally and Rebatest, who pay their members to post fake reviews to ecommerce sites, including Amazon, eBay, Walmart, and Etsy. Paid for by third-party sellers, the misleading and fraudulent reviews are posted by people in exchange for money or free products. Such reviews may improve a third-party seller’s search ranking in Amazon, and they may convince a potential buyer to purchase a product after reading fake reviews. Ecommerce sites like Amazon are ultimately on the hook for false or misleading reviews, regardless of where or from whom the reviews originated.
In a February 22, 2022 news release, Amazon said it filed the lawsuits after an in-depth investigation.
“Fake review brokers attempt to profit by deceiving unknowing consumers and creating an unfair competitive advantage that harms our selling partners,” said Dharmesh Mehta, VP of WW Customer Trust & Partner Support, Amazon. “We know how valuable trustworthy reviews are to our customers. That is why we are holding these review fraudsters accountable. While we prevent millions of suspicious reviews from ever appearing in our store, these lawsuits target the source.”
Amazon said the two fake review brokers have more than 900,000 members willing to write fake reviews for the third-party sellers who the brokers represents. In one example, Amazon said AppSally will sell a fake review for as low as $20. Then they ship empty boxes to people willing to write a review, so fake reviewers can then provide AppSally with photos to post along with their reviews.
In the case of Rebatest, customers would purchase a product on Amazon and leave a review. Rebatest would then refund the purchase price to the customer. However, the fake review broker only pays for five-star reviews approved by the third-party sellers they work with. CNBC reached out to AppSally and Rebatest. AppSally didn’t respond, and Rebatest declined to comment on the matter.
Proactive prevention
According to the news release, Amazon “strictly prohibits incentivized or fake reviews,” and they use both machine learning and investigators to identify, prevent and remove misleading and fraudulent reviews. The company said that, in 2020, it stopped over 200 million suspected fake reviews before being seen by customers.
“A nefarious industry has emerged in recent years, in which fraudsters facilitate fake or inflated reviews in exchange for money or free products,” said Amazon.
Based in Seattle, Amazon filed the lawsuits in King County Superior Court.
Other legal action
Amazon reports that it has stopped dozens of injunctions against fake review brokers like AppSally and Rebatest, requiring the brokers to reveal who is paying for the fraudulent services. Late last year, two other major fake review companies in Germany and the U.K. were shut down after Amazon sued them.
FTC’s fight against fake reviews and testimonials
Last October, the Federal Trade Commission sent letters to more than 700 companies and brands, including many subscription companies, that it will not tolerate misleading endorsements and reviews. Though the letter recipients are not accused of any wrongdoing, the FTC warned them that they will use every tool at their disposal to stop companies who violate the law by posting false or misleading reviews or testimonials. The civil penalty per violation is $43,792 for posting false or misleading endorsements in online reviews or social media.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses. Advertisers will pay a price if they engage in these deceptive practices,” said Samuel Levine, director of the FTC’s bureau of consumer protection, in an October 13, 2021 news release.
UK’s CMA investigates Amazon and Google for potentially fake reviews
The FTC isn’t the only regulatory authority with serious concerns about fake reviews. In June 2021, the United Kingdom’s Competition and Markets Authority (CMA) opened an official investigation into potential fake reviews on Amazon and Google. The CMA is investigating whether Amazon and Google have broken any consumer laws by not taking sufficient actions to protect shoppers from false or misleading reviews. Such reviews can have a significant impact on how a business is featured online and how a consumer perceives the products of individual businesses.
“Our worry is that millions of online shoppers could be misled by reading fake reviews and then spending their money based on those recommendations. Equally, it’s simply not fair if some businesses can fake 5-star reviews to give their products or services the most prominence, while law-abiding businesses lose out,” said Andrea Coscelli, the CMA’s Chief Executive, in a June 25, 2021 news release.
How to spot a fake review
In November, Business Insider shared tips on how to spot a fake review:
- Check the percentage of one-star to five-star reviews. It is unusual for 70% of the reviews to have four or five stars and 30% to have one star.
- Vague reviews may be fake. For example, a review that says, “good product” or “would buy again” but does not specify what makes the product good or worthy of a repeat purchase may be suspect.
- If the review disses another brand or company’s product, be wary of the review.
- How popular is the product? If it is a little-known product, but has lots of reviews, this may be a red flag.
Insider Take
There is no shortage of bad actors these days, including third-party sellers who are willing to pay for fake reviews and consumers who are willing to write fraudulent reviews for free products or cash. While it may be hard to sympathize with ecommerce giant Amazon, even machine learning and a team of thousands of fraud investigators can’t catch everything, nor can they prevent all bad actors from trying to cheat the system. Ultimately, we all lose. If companies like Amazon get fined for fake reviews, those costs are ultimately passed onto the consumer. If consumers buy products based on fake reviews, they have been misled and may end up with a product they wouldn’t otherwise buy.
