Fake Online Review Crackdown in New York Leads to Fines for 19 Companies

XVIO, a reputation management and SEO company, tells potential customers that it can use its “army of highly regarded bloggers, journalists, and reviewers” to generate “the HIGHEST volume of 5-star reviews.”

The New York City-based company “posted hundreds of fake reviews of clients on consumer-review websites,” and was one of 19 reputation management, SEO and client firms, including charter bus company US Coachways, fined by the New York State Attorney General and ordered to cease writing fake online reviews.

eBoxed, also known as Zamdel Inc., was another company caught up in the sting. The Attorney General’s Office stated eBoxed “posted more than 1,500 fake reviews of clients on consumer-review websites such as Yelp.com, Google Places, Yahoo! Local, Citysearch, Judy’s Book, and InsiderPages.com.”

The 19 companies agreed to pay fines ranging from $2,500 to nearly $100,000, and pledged to cease being involved in the fake review business. In addition to XVIO, eBoxed and US Coachways, the companies included Laser Cosmetica, Swam Media Group, A&G Wig Fashions, Platinum Dental, Body Laser Spa, The Block Group, Bread and Butter NY, Envision MT, iSEOiSEO, Medical Message Clinic, Metamporhosis Day Spa, Outer Beauty, Stillwater Media Group, Swan Media, Utilities International, The Web Empire, Webtools, and West Village Teeth Whitening Service.

The investigation of Swam Media Group, the licensee of Scores “gentlemen’s club franchises,” uncovered the fact that one of its freelance writers penned 175 fake reviews of the strippers at Scores in New York City and scoreslive.com.

Many of the fake-review efforts included IP spoofing and establishing hundreds of fake online profiles in attempt to get away with the review fraud, the Attorney General’s Office stated.

The sting, in which representatives of the AG’s Office posed as a Brooklyn yogurt shop owner looking for help in combating negative reviews, targeted only New York-based companies, but points to what is undoubtedly a global problem.

“Multiple studies conclude that online reviews can make or break companies,” the AG’s Office stated.

Companies such as Yelp and TripAdvisor state they use technical and human means to weed out fake reviews, but with aggressive tactics by firms such as those caught up in the scandal, fictional reviews undoubtedly slip through the cracks.

The Attorney General’s Office singled out Yelp for having a particularly robust system to counter fake reviews.

TripAdvisor states that one advantage it has in countering fake reviews is scale. In other words, a handful of fake reviews won’t skew the TripAdvisor Popularity Index if a hotel has attracted hundreds of reviews.

“Consumers rely on reviews from their peers to make daily purchasing decisions on anything from good and clothing to recreation and sightseeing,” New York Attorney General Eric Schneiderman said. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution.”

Scheiderman said prosecutors are equipped with many tools to attack what amounts to false advertising and “put an end to it.”