Fake Reviews: A $152 billion problem

Have you ever heard of “The Shed at Dulwich?”

No?

So, let us tell you an intriguing tale that was featured on Vice. Oobah Butler, an English author, wanted to attempt something amusing in 2017. He had previously run a side business producing bogus reviews on the prominent travel website TripAdvisor, and he had a lightbulb moment. What if he could take the “fake reviews” concept a step further? What if he could truly build a phoney restaurant?

So, he got a throwaway burner phone and labeled the address as a “appointment-only eatery.” That is, you couldn’t simply stroll in. You had to schedule the appointment. He created a website, a whimsical menu (food items based on moods), phoney images of dishes, and asked people to submit reviews.

On the first day, the Shed was ranked 18,149, the lowest in London. However, The Shed became viral a few weeks later. This bogus eatery quickly filled up. Six months later, The Shed had risen to the top of the charts.

A phoney restaurant with phoney reviews is ranked number one on one of the internet’s most prominent and trustworthy travel websites. It was ridiculous!

Anyway, TripAdvisor stated that people seldom undertake stunts like this one since there is no genuine benefit. Fake reviews, on the other hand, were frowned upon. And it’s easy to understand why. This scourge has spread to Amazon, Flipkart, and now Zomato!!! According to the World Economic Forum, 4% of all internet evaluations may be false, and this alone causes concern.

Such is the threat that Amazon sued the administrators of over 11,000 Facebook groups last week for soliciting fraudulent reviews.

If you’re curious how this whole thing works, here’s a simple rundown. An industrious person has a brilliant idea for making a fast cash. So, he starts a group to find people who can post phoney evaluations for restaurants and other similar service providers. Assume you’re wanting to make a fast cash for yourself. You try to join the group. The admin typically checks over your profile once to make sure you’re not in law enforcement, and then you’re in! What you observe as a result astounds you. Sellers are hard at work selling their items and requesting phoney reviews.

That’s a lot of money for just one measly review. But for the seller, these positive reviews might mean the world. If they get a critical mass, the higher visibility alone could help them break even on their investment. Fake reviews can boost sales by the millions. In one instance, Legacy Learning Systems Inc, a music learning company generated over $5 million in sales by splashing $250,000 on fake reviews across the web.

Now for platforms like Amazon (even TripAdvisor), fake reviews are a problem of gigantic proportions. You see, its business relies on network effects — if it has a significant user base that leaves genuine reviews, it helps others make the right choice. It creates trust and fosters a meaningful relationship between the third-party aggregator, the seller, and the buyer. In fact, studies have pointed out that 76% of folks treat these online reviews as if they had just been made by a friend. Now imagine that they start thinking otherwise. It affects legitimate businesses too.

To begin with, as previously stated, it is suing the individuals implicated. But they’re not going to stop there. Amazon has been pouring money and personnel into the problem for some time. In 2019, the e-commerce behemoth invested $500 million and employed over 8,000 personnel to combat platform fraud. Even so, it hasn’t been a smooth ride. According to research performed by Harvard Business Review, it takes an average of 100 days for them to remove a bogus review.

Even Facebook has contributed. It has measures in place to detect these shady organisations. However, a simple solution such as disguising the message with strange characters — “R*fnd Aftr R*vew” (refund after review) — might fool this detection mechanism.

They must do more.

Especially now that governments are paying attention. The UK government presented proposals to make phoney reviews criminal in April of this year. If legislation passes, corporations might face fines of up to 10% of their global revenue for deceiving customers.

In India, the Department of Consumer Affairs (DoCA) met with several e-commerce businesses and consumer rights advocates in June to discuss how to deal with bogus reviews. If all goes as planned, we may soon have a framework that will help to relieve the situation to some extent.

So, we’ll just have to wait and watch how things play out. But, in the meanwhile, please let us know if you have any tips and strategies for avoiding fraudulent reviews. Send us a tweet. The most fascinating comments will be retweeted on our handle.