For the first time ever, the Federal Trade Commission (FTC) has taken a U.S. Amazon seller to court after the owner allegedly purchased fake reviews to promote a product.
This probably won't be the last time a company faces this kind of consequences, according to experts who say the FTC is taking an overdue first step in fighting a widespread problem plaguing Amazon's online marketplace.
In this instance, the product was a diet pill listed on Amazon that the seller, and its fake reviewers, claimed was a “'powerful appetite suppressant' 'Literally BLOCKS FAT From Forming, causes significant weight loss, including as much as twenty pounds, and causes rapid and substantial weight loss, including as much as two or more pounds per week," according to the FTC complaint.
The reviews themselves, which are detailed in the FTC complaint, range from overly detailed to outright ridiculous. It cost about $1,200 for 30 of them, and they were enough to result in some hefty fines for the New York company behind the bogus boasting, Cure Encapsulations, Inc. The company did not respond to a request for comment.
“I started to using this product 2 months ago and I have lost 15 pounds already. Don’t get me wrong, I was originally 150 pounds and 5’6. I haven’t felt dizzy or anything as these 1-star reviews said, which I was worried at the beginning. Will definitely keep buying!”
The website where they purchased their fake online fans, Amazonverifiedreviews.com, charged just over $1,000 to leave multiple reviews daily for more than a month, according to court documents. While the website is no longer active, an archived version says that "product reviews are the single most important factor you are being measured by," promising businesses that if they "have plenty and most of them are positive, then sales will follow!"
“When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules," Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, said in a Feb, 26 news release announcing the case.
For some people who have been fighting the issue of fake reviews for years, the FTC's help is welcome, and they're hoping Amazon is paying attention, too.
“Fake reviews have flooded Amazon’s platform for years, and the company continues to turn a blind eye," according to Bob Engel, chief spokesperson for the non-profit Free & Fair Markets Initiative. "Amazon has been unwilling or unable to put in place meaningful safeguards for consumers, and its failure to do so calls into question why any shopper can trust the company," he added in an email to Fox.
Amazon did not respond to a request for comment in response to this case.
A former Amazon employee, who left the company to help sellers on the other side of some of Amazon's policies, says this case proves "Amazon has to adapt."
"Product reviews are a logical place to start, given the state of fake negative reviews competitors leave for each other, and the various ways sellers game the system to pad their fake positives," according to Chris McCabe, otherwise known as ecommerceChris.
McCabe says he left Amazon to start helping sellers after witnessing first-hand the many difficulties people were facing just to survive on the platform, including the adverse effects of fake reviews. "One would have to assume given the extreme black hat Amazon consultant tactics flying around that this will be the first of many such FTC investigations," he adds.