ACCC investigates fake company reviews

The ACCC will investigate the review policies of sharing economy platforms, a move which has been welcomed by consumer group CHOICE.

The investigation forms part of an international initiative targeting online reviews and endorsements, following analysis by CHOICE that found 20 long form reviews can be purchased for just $31. In addition, 5000 Instagram followers cost only $75.

“With many consumers relying on user reviews to help inform their purchasing decisions, it’s concerning to think that as many as 15% of all online reviews are fake,” said Tom Godfrey, head of media at CHOICE.

An increasing share economy has also resulted in the popularity of user reviews, as consumers share and rate their experiences. However, some companies are writing fake reviews to promote themselves, despite the fact that Section 29 of Australian Consumer Law prevents businesses from making or inducing false or misleading representations through testimonials or reviews.

“Whether you are reading reviews on a hotel booking site, rating a ride-sharing service or following a celebrity on Instagram, you need to be able to trust what you’re reading,” said Godfrey.

“Businesses that pay people to write reviews who have never used their products or services are clearly misleading consumers.”

If a company pays someone to write an inflated review, even if the person has actually used the goods or service, this may also be considering misleading. The same considerations apply to editing or deleting less favourable ratings.

To spot fake reviews or testimonials, CHOICE recommends that consumers check reviews about the same business from different sources. In addition, it is important to keep an eye out for a sudden increase in positive or negative reviews within a short time frame that do not match with earlier reviews.

Image credit: ©Duncan Andison/Dollar Photo Club