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Reviews Gone Wild

By Tim Bailey & Paul Cardis

Nielsen Media Research has identified that, other than actual “recommendations from people I know,” consumer opinions posted online have the most influence on purchasing decisions. Online customer reviews are now more important than ads on TV, branded websites, print ads, and media.
Reviews have taken over the buying experience and businesses are under more pressure than ever to present positive reviews to increase sales. This scenario has led some companies and consumers to engage in shady practices. Both sides have been found guilty of manipulation, causing serious damage to businesses and consumers alike. In fact, a 2012 Gartner study estimated that one in seven recommendations or ratings on social media sites would soon be fake.
What’s really happening in this relatively new frontier of the Internet, and how can builders be protected? Incidences of review fraud are running rampant, threatening the very core of commerce—buyer trust. Consumers have been caught posting fraudulent reviews and businesses have been caught posting fake, edited, or cherry-picked reviews to enhance sales. Trust in making Internet-based purchasing decisions and upholding consumer protection rights is at stake, and there will likely be significant financial consequences if consumers lose faith in the online shopping process. Review fraud is a significant step backward that smart home builders and renovators need to avoid. After all, no business wants to risk losing public trust and end up with a Volkswagen moment.

Shameless Review
In 2011, Bill Hadley was running for a seat on the Freeport, Illinois County Board when an Internet “troll” posted a defamatory comment in the comment section of an online news article, accusing Hadley of committing heinous acts. The accusation enraged Hadley and he set off on a mission to expose the identity of the anonymous commenter. Hadley filed a $50,000 defamation complaint and obtained a court order to release the IP address of the commenter from the host site. A subsequent release of information uncovered that it was a personal contact of the candidate—a local attorney Hadley had worked with previously. Hadley persevered and, after four years and $35,000 in legal fees, the anonymous commenter was finally unmasked, essentially exposing Hadley’s accuser. The offensive comment was removed from the site and the defamation case is continuing through the court system. Rogue online commenters beware: anonymity is no longer a safe assumption. Review sites like Yelp, Angie’s List and Google are protected from liability for user-generated content by various “Safe Harbour” statutes, however, consumers posting fraudulent reviews can now be held legally responsible for what they write.

Dirty Business
Businesses are also getting caught “gaming the system” with online reviews. Bell Canada was recently fined $1.25 million by Canada’s Competition Bureau for encouraging employees to plant positive online reviews for Bell’s mobile apps. The bureau “determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps.” Obviously, consumers were duped into thinking these reviews were legitimate.
New York regulators have also been cracking down on deceptive Internet reviews, reaching agreements with 19 companies and issuing penalties totalling $350,000 to date for review fraud. “This shows that fake reviews are a legitimate target of law enforcement,” said Aaron Schur, Senior Litigation Counsel for Yelp. The targets were companies that created fake reviews for other businesses, as well as businesses that purchased fake reviews, or in the case of some businesses, bribing customers to write positive reviews in exchange for gift certificates. Likewise, Amazon recently announced they are suing 1,114 fake reviewers who were found marketing their “review-writing services for hire” on the online services platform, Fiverr.com.

Review Washing
Some companies are making it a practice to gather customer reviews and then allow clients to “filter out” negative reviews and/or cherry-pick positive reviews. This is all made worse by the use of third-party research companies who facilitate and endorse falsified star ratings as legitimate. Unfortunately, the home building and renovation industries have several providers that openly offer this service. This “review washing” practice deceptively creates improved star ratings for businesses that haven’t earned them, in turn leading customers to believe these businesses are more “quality-minded” than they actually are. Clearly, misrepresentation is a violation of consumer protection rights and, if exposed, can destroy a company. A quick Internet search of builders and renovators reveals many conflicting 1-star ratings on public sites versus the solid 4-star and 5-star ratings on the site of their “review washing” provider.

Authenticity Is the Answer
Wise consumers and businesses will avoid the temptation to misuse the power of reviews. Consumers can be held legally responsible for what is written in online reviews and businesses that engage in unethical review practices can be exposed and brought to justice. The inevitability of occasional negative reviews is not worth the brand damage of being revealed as a counterfeit. A solid research company does not enable cherry-picking and will post 100% of the reviews received, while maintaining a process by which only verified customers can submit reviews, and clients are only allowed to exclude profane or abusive language. “When deciding to buy, consumers judge an offering’s authenticity as much as—if not more than—price, quality, and availability,” according to Welcome to the Experience Economy authors Joseph Pine and James Gilmore. In the end, creating “service certainty” is far more important than the creating the illusion of perfection in today’s wired world.

Paul Cardis is Founder/CEO and Tim Bailey is Division President of Avid Ratings Canada, a leading provider of customer loyalty research and consulting to the home building industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brands. They can be reached at paul.cardis@avidratings.com or tim.bailey@avidratings.ca.



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