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National Restaurant Association - NY case shows legal risks of phony online reviews

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NY case shows legal risks of phony online reviews

While few business owners will dispute the value of high ratings on websites like Yelp and TripAdvisor, attempts to increase ratings through artificial means can damage a business’s pocketbook and reputation. 

That’s the lesson of a recent investigation by the New York Attorney General’s Office that resulted in 19 companies paying hefty fines for their roles in soliciting or producing fake reviews in an attempt to boost ratings on the consumer review sites Yelp, Google Local and CitySearch. New York Attorney General Eric Schneiderman said in a statement that the fake reviews violated state laws against false advertising and illegal and deceptive business practices.

Among those fined were search engine optimization companies, nightclubs, spas, cosmetic surgery and dental offices. The fines they paid ranged from $2,500 to just under $100,000. To conduct the sting, representatives from the attorney general’s office posed as the owner of a yogurt shop and contacted search engine optimization companies to ask for help in countering negative online reviews. During the calls, representatives of some of the companies offered to post fake positive reviews to help improve the shop’s online ratings. The companies wrote reviews themselves and hired writers from other countries to write reviews, paying from $1 to $10 per review. Other techniques included creating fake online profiles on the review sites and using technology to hide the reviewer’s location.

Several local businesses were also fined for soliciting writers through Craigslist and other sites to post positive reviews that could get past the filtering techniques the sites use to identify false reviews.

David Wachen, an attorney with Shulman Rogers in Washington, DC who advises clients on managing their online reputations, says it’s a bad idea for restaurants or any other business to try to boost their online ratings by posting false reviews or paying others to write reviews. Though a bad review can potentially harm business, the fallout for a restaurant that is found to post false reviews can be far worse, Wachen says. The New York case shows that, in addition to the potential reputational risks, posting false reviews presents potentially serious legal hazards, he says.

“Part of being a restaurant owner is establishing a certain level of trust with your diners,” said Wachen. “You don’t give them some sort of mystery meat when they order a steak. This is the same sort of thing. A lot of the business is built on trust.”

When negative reviews happen, responding to them can pay off, he said. But that response should focus on engaging the reviewer and resolving the issues raised by the negative review.  Most sites allow businesses to respond to reviews, and that simple step can go a long way toward winning back a customer. 

“Good customer service, being responsive to customer needs — it all comes back to that,” Wachen said. “Where people get into trouble is when they respond in an inappropriate way. They can make the situation 10 times worse.”

Click here to download “Online Reviews: The New Word of Mouth,” the National Restaurant Association’s guide to help restaurants optimize their presence on consumer-review sites.

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