FTC Cracks Down on Fake Amazon Reviews in Groundbreaking Case
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The U.S. Federal Trade Commission is cracking down on one of the longstanding problems of online retail: fake reviews.
On Tuesday, the FTC announced that it has brought its first ever successful case against fraudulent and paid-for reviews on retail sites. More specifically, it took action against a diet pill seller for making false claims and paying for fake positive reviews.
The company in question is Cure Encapsulations, Inc., owned by a Brooklyn man who alternately goes by Naftula Jacobwitz, Nat Jacobs, or Nate Jacobs, Vox points out. The company hocked its products on Amazon.
At the center of the case is an alleged weight loss supplement made from an Indonesian fruit called garcinia cambogia. There’s no scientific evidence that the fruit aids in weight loss, but it has been known to cause acute liver failure.
And yet, Cure Encapsulations was not shy about the alleged benefits of the fruit. In the Amazon description for its diet pill, the company promised that the fruit had “a myriad of amazing properties” and “literally blocks fat from forming.”
The FTC obviously found those claims to be false and unsubstantiated. But it also took action against Cure Encapsulations paying for fraudulent Amazon reviews.
According to the Commission, Cure Encapsulations had paid a third-party website called amazonverifiedreviews.com to write and post fake reviews to keep the product’s rating above 4.3 out of 5 stars.
As part of the settlement, Cure Encapsulations has agreed to never make fraudulent claims for any of its supplements again — unless it has “competent and reliable scientific evidence.” Additionally, the company is also barred from misrepresenting whether or not a review or testimonial is from a real customer.
More than that, the Brooklyn company also has to tell Amazon that it paid for third-party reviews — which is itself a violation of Amazon’s guidelines. To help keep Cure Encapsulations in line, the FTC imposed a $12.8 million fine with $50,000 due today.
“When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules,” said Andrew Smith, the FTC’s director of consumer protection.
“We welcome the FTC’s work in this area. Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers. Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.
– Amazon Spokesperson
For its part, Amazon said it welcomes the FTC’s work in the area. The retail giant has taken its own legal action against fake reviews in the past, too.
