Sept. 24--One of the quiet plagues of online commerce has been the shadowy firms that some businesses pay to write glowing reviews on sites like Yelp, Citysearch, Google and Yahoo. On Monday, New York Attorney General Eric Schneiderman announced agreements with 19 of the bogus review companies to stop the practice and pay $350,000 in fines.
The issue is not unique to New York, however. Paid reviews manipulate shopping behavior across the Web. The question is whether any amount of fines and cease-and-desist agreements can put a dent in the problem.
"It's a classic false advertising case. People who read online reviews reasonably assume that the reviews were written by actual customers," says Jeff Rabkin, California's special assistant attorney general for law and technology. "It's an old-time fraud emerging in a new marketplace."
California Attorney General Kamala Harris's office is looking into the problem of fraudulent reviews, but a spokesman would not provide specifics.
The rise of customer reviews on sites like San Francisco-based Yelp has also given rise to a cottage industry of bogus reviewers, paid to write glowing copy about a product or service they may know next to nothing about. Some of the bogus review writers are located overseas in Asia or elsewhere. Some are single-person operations pounding away on a home computer.
Surveys paint a disconcerting picture of their impact. An April 2012 study from Nielsen found online reviews were the second most trusted form of advertising after word-of-mouth by family and friends. Yet the technology research firm Gartner estimates that by 2014, some 15 percent of online reviews will be fake. And a 2011 study from Harvard Business School found that a one-star increase in a Yelp rating increased a restaurant's revenue up to 9 percent.
Being tricked into buying a lousy sandwich is not the end of the world. But reviews of doctors, lawyers, mechanics and construction companies influence important transactions. Can the fake reviews be stopped?
The Federal Trade Commission released new guidelines in March trying to address all the new ways consumers get information about purchases. Under the guidelines, if someone is compensated for writing a review of a business, they must disclose the relationship.
Finding the fakes
Yelp tries to snuff out the phonies with clever algorithms that detect suspect testimonials by combing the language and the users' habits as they submit reviews. Over 42 million reviews across tens of millions of businesses exist on Yelp, yet the company's algorithms detect about 25 percent of them as bogus and don't display them to consumers, according to Vince Sollitto, Yelp's vice president of communications.
Sollitto says there's a give and take, however. Sometimes Yelp's algorithms will accidentally flag real reviews as fake and upset business owners.
"Ironically, we get some flak for that," he says. "That's the price we have to pay."
Fraud detection is competitive and, accordingly, Yelp doesn't share information about fraudulent users with other websites and services. That makes business sense. At the same time, if firms shared more data about fake reviewers, it might help everyone sniff them out.
Anonymity a problem
Indeed, the anonymity of the Web compounds the problem. While traditional reviewers like Zagat's and Fodor's may only consult on a few opinions when judging a business, they are brands people feel they can trust. Crowdsourced opinions employ thousands of reviews, most by unknown reviewers, leaving consumers struggling to weed out the phony ones.
Perhaps the easiest way to validate reviewers would be through social-network sign-ons. Fakers wanting to create false reviews would have to create real-looking profiles on Facebook, Google+ or Twitter, complete with many friends, messages and photos -- an arduous task.
Facebook has dabbled in these waters, offering a service that requires a Facebook log-in to comment on articles so people think twice about what they say.
But that isn't a perfect solution. Not everyone is comfortable on Facebook, and others may still feel fine writing glowing phony reviews under their social network IDs.
For now, consumers can try taking the average sentiment of a dozen reviews, if not more. The fakers might still get through. But there are enough real voices out there to drown out the phonies if digital shoppers take the time to listen to them.
Caleb Garling is a San Francisco Chronicle staff writer. E-mail: email@example.com