Restaurant Law Blog

Thursday, October 24, 2013

Fake Restaurant Reviews Could Cost Owners Thousands

As discussed in a recent NY Times article written by David Steitfeld, a study conduced by Harvard Business School found that restaurants that were able to increase their rankings on Yelp by one star saw an increase in revenues by 5-9%.  It is no surprise that higher ratings on review sites like Yelp have the ability to draw in more crowds, but are some business owners going too far to get that extra star? New York Attorney General Eric Schneiderman thinks so, and he is taking action.

Mr. Scheiderman led a yearlong investigation to track down companies that are paid to create fake reviews (known as “astroturfing”), as well as the business owners who hired these companies. So far, 19 companies have been ordered to pay $350,000 in penalties for these misleading practices.

One bus company, US Coachways, had a one-star rating on Yelp before its chief executive decided to take matters into his own hands; freelance writers were hired, and employees were mandated to write positive reviews of the company. US Coachways now must pay $75,000 in fines.

Consumer reviews are easier to access than ever and have the ability to greatly influence a potential customer, but studies estimate that 1 in 7 recommendations online are false. In an effort to protect consumers, law enforcement is clearly taking a serious stance on this issue. Instead of putting effort into obtaining fake reviews and risking a fine, your time and money is likely better spent fixing the concerns of your real customers.

 


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