Consumer watchdog's legal action over website reviews welcomed by consumer advocates.

By Kathy McLeish

Consumer advocates have welcomed legal action launched yesterday by the national consumer watchdog over website reviews, saying it is a timely warning to retailers, service providers and consumers.

The Australian Competition and Consumer Commission (ACCC) launched legal action against Meriton Serviced Apartments on Thursday, alleging Meriton tried to prevent some guests from posting negative reviews on TripAdvisor, from November 2014 to October 2015.

But Meriton denied the claims, saying it did not agree that the public has ever been deceived or misled, and that the proceedings would be defended.

Consumer group Choice and the Consumer Action Law Centre say regardless of the outcome, it is a good time for shoppers to be reminded about the pitfalls of false reviews — especially with the peak Christmas shopping season now underway.

“These allegations are really shocking but I wouldn’t call them a surprise,” Jonathon Brown from the Consumer Action Law Centre said.

“People go online looking for information and, really, they just come across marketing that’s dressed up as authentic reviews and that trips people up all the time.

“Sadly, it is a pretty common practice for companies to tinker with their own reviews and make them look better than they actually are.”

Choice spokesman Tom Godfrey said it was an offence to make false claims and misleading representations through testimonials or reviews under Australian consumer law.

“Hopefully with more actions from bodies like the ACCC, we won’t see this come up as a systemic issue in larger companies and we will be able to keep trusting the bigger review sites,” Mr Godfrey said.

“This sends a really clear warning to other businesses out there, who may have been looking at this as a strategy, just not to do it because if you do, the ACCC is watching.”

Can you trust online reviews?

Last year Choice looked into the trustworthiness of online reviews and found the problem of fake reviews and review sites was on the rise.

“A company might pay an agency or ‘clickfarm’ to write positive reviews,” Mr Godfrey said.

“Fake reviews are big industries and the industries are booming because so many consumers look at this information to base purchasing decisions on.”

What price for popularity?

Choice also found that it was not hard to buy popularity.

Last year, the organisation set out to buy its own online buzz and purchased social media popularity — which included 5,000 YouTube views, ironically, for a video clip about fake reviews.

What Choice paid for social media sharing:

• Online reviews: 20 long reviews at $US31.20 and short reviews at $US5
• Facebook page: 2,500 likes for $70
• Instagram: 5,000 followers for $75
• Twitter: 5,000 followers for $75
• Youtube: 5,000 views for $70
• Video testimonials: 1 video for $US5

But the news was not all bad.

Mr Godfrey pointed to a US study that showed 89 per cent of consumers found online reviews to be trustworthy, but most backed them up by asking family and friends.

He said it paid retailers to ensure the review pages on their sites were secure and safe.

“A lot of the big online retailers now have a program in place to crack down on fake reviews because ultimately what it does is lead consumers into a purchase that can be a pretty terrible decision which reflects badly on the retailers,” he said.

“So it’s in everyone’s interest that consumers are mindful that this goes on, that retailers take a very hard line against it and that businesses just don’t engage in the practice.”

Top tips for using online reviews

So what tips do experts have for consumers using online reviews?

• ‘If it sounds too good to be true, it probably is’
• Seek out independent sources of information that you can trust
• Look at the tone and language of reviews, if you see a lot of similarities in reviews it is often a sign that something might be up
• Compare reviews across a number of sites, don’t just look at one
• Ask real people on internet forums and ask friends and acquaintances

TripAdvisor said in a statement that it took all reports of fraud and abuse seriously and ensured business owners were aware of the strong penalties they had to face should they not adhere to strict guidelines.

This post originally appeared on ABC News.