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September 23rd, 2013
07:06 PM ET

Crackdown on fake online reviews

When it comes to online reviews, if it sounds too good to be true, it might have been paid for. On Monday, the New York State Attorney General cracked down on businesses that buy fake reviews for websites like Yelp and Citysearch.

A yearlong investigation uncovered nearly two dozen companies trying to fake it to make it. In all, the state attorney general busted 19 companies for scamming customers with phony reviews. They will have to pay a total of $350,000 in fines.

Companies care so much about reviews, because they really do affect business, said Howard Bragman, vice chairman and founder of Reputation.com, and, it should be noted, whose company shares investors with Yelp.

"The numbers are astounding," said Bragman. "Eighty percent of consumers make their decisions based on these customer reviews, and that's a number that's gone up almost 10% a year the last couple years, and growing. This is how we make our decisions now."

Bragman's company helps businesses improve their online profiles, especially when they are hit with bad reviews.

"The first and most important thing is to do it ethically," said Bragman. That means no paid reviewers, and no fake reviews.

"The most important thing you can do is make it easy for your customers to review you. There's a tendency for people to put up a review if they have a bad experience," said Bragman.

New York state is leading the way on this issue, and Bragman said he thinks, and hopes, other states will get involved, and crackdown on companies scamming consumers by paying for, or posting fake reviews.

"Consumers love this. You know, it used to be the wild west out there," said Bragman. "You could have a bad review that was posted anonymously. I used to call it writing on the bathroom wall."

"For the first time, the attorney general is saying this is wrong. You know, it's one thing if you go to a restaurant, you have a bad meal, but if you go to a bad doctor, a bad health care provider, somebody who is watching your kids, and have a bad experience, that's a whole different thing, and there are serious implications for these dishonest reviews," said Bragman.

"Consumers will rally behind this," said Bragman.

For those who rely on online reviews, Bragman said there are ways to spot a fake. The first step is to look at at multiple review sites.

"Look for the consistencies. If they keep saying this hotel chain has dirty rooms, they probably have dirty rooms. If you read five different restaurant reviews and they say, you know, they give great service, great food, you start to look at it. And talk to your friends," said Bragman.

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